There is no option on a tax return to select retired. The occupation field on a tax return is for statistical purposes only and has no bearing on your tax return.
Retirement income is taxable income and is reported on your tax return using Form 1099-R. The amount entered in box 2 is the taxable amount of your retirement income.
If you receive Social Security benefits, those benefits can be taxable if you have other income to report on your tax return.
Up to 85% of Social Security Retirement/Disability/Survivors benefits becomes taxable when all your other income plus 1/2 your social security reaches:
Some additional information: There are 13 states that tax Social Security—Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West Virginia. These states offer varying degrees of income exemptions, but four mirror the federal tax schedule: MN, ND,VT, and WV