Carl
Level 15

Retirement tax questions

I'm surprised. Maybe something changed? Back when I retired I was told no allotments from my tax free disability pay. Maybe you can now? but understand that if you do that, then you get no tax deduction from your taxable income, if you have a year where you qualify to deduct medical expenses. So I would say take it from the taxable retired pay. That way, if you have a year in your future where medical expenses exceed 10% of your AGI, then your premiums can count as such. Note that when you reach age 65, the threshold drops to 7% of your AGI.