I have a private disability policy and unable to return to work. I am a teacher who is not eligible for Social Security. Also, I am eligible for retirement. Retirement and disability compensation are about the same but I'm told I will lose $400 a month in taxes if I retire. Is it worth the angst of applying for medical disability? I paid into the program for many years. Thank you.
The terms of your disability policy need to be reviewed to determine the method required for proving disability. The portion of the benefits attributable to your premium contributions will not be subject to income tax. You may want to consult a CPA to determine the exact tax consequences to you under both scenerios.