3. Medical Expense Tax Deduction (7.5% Rule)
Healthcare is one of the biggest expenses in retirement—but it can also provide major tax relief.
If you itemize deductions, you can deduct:
- Medical expenses
- Dental costs
- Medicare premiums
- Long-term care insurance
As long as they exceed 7.5% of your Adjusted Gross Income (AGI)
This is especially valuable for retirees with:
- High medical bills
- Ongoing treatments
- Long-term care needs
Tip: Keep detailed records—this deduction can significantly lower your tax liability.
