Social Security Tier 1 Retirement Benefits

••• railroad image by Stefan Balk from

Social Security tier one benefits are made available as part of the Railroad Retirement Act and are paid exclusively to former employees of U.S. railroad companies. These benefits offer access to Medicare coverage, annuities and special Social Security payments that allow workers to retire while still being able to meet financial needs.

Base Retirement Benefit

Tier one base retirement amounts for Social Security benefits vary by the size of the retiree's household. If you are single, a qualifying widower or are the head of the household, your total base benefit for the year is $25,000. If you're married but have lived apart from your spouse the total benefit is also that amount. The total tier one benefit increases to $32,000 if you're married and filing taxes jointly with your spouse. Benefits disappear altogether if you're married, filing taxes separately from your spouse, and have lived with your spouse at any time during the year.

Paying Taxes on Social Security

According to the Internal Revenue Service's website, tier one benefits are generally not taxable as income as long as these benefits are the only income you receive for the given tax year. This allows retired Americans subsisting only on Social Security benefits to budget funds knowing that the amounts will not be eaten up in taxes at the end of the year or during each disbursal of funds. U.S. citizens residing in the following countries also are exempt from taxation on tier one benefits: Canada, Egypt, Germany, Ireland, Israel, Italy, Romania and the United Kingdom.

The Railroad Retirement Act

According to the United States Railroad Retirement Board's website, spouses of former railroad employees are also entitled to annuity benefits under tier one. The annuity amount is based off the former employee's length of service and average career earnings. The spouse is generally granted a one-time payment during the first month in which tier one benefits begin. A payment may also be available for divorced spouses as long as the marriage lasted for a period of ten consecutive years or more.