The Obama Retirement Plan

Today's Financial News - Posted June 17, 2008

Judging by the Obama family tax returns, financial and retirement planning is not exactly the strong suit of the next U.S. president. In fact, his lack of investing experience goes a long way to explain his plans of punishing middle-class Americans stupid enough to provide for their own retirement. That worries me.

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Baltimore — (TFN): During the primaries, soon-to-be President Obama and his wife, who has been called “America’s unhappiest millionaire,” nudge-nudge-wink-winked at the common man, calling America “a nation of struggling folks who are barely making it every day.”

Things apparently are so bad, even the Obamas can barely afford ballet and piano lessons for their daughters—let alone Whole Foods arugula for the dinner table.

Having not just paid for ballet lessons for two, but ballet, swimming, fencing, scouting, oboe, violin, cello, piano lessons—not to mention daycare and summer camps! — for three kids for the past 15 years — and all the arugula they will eat!—I remain puzzled how two ivy-league educated lawyers, each pulling in six-figure incomes, can possibly be so strapped for cash that it’s tutu or tofu for the last week of the month

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When they released their income tax information, however, several things fell into place. Both must have been out pounding the pavement for Abu Mumia Jamal when they talked about tax and financial planning at Harvard Law.

Several financially nimble bloggers have commented on the complete absence of elemental tax planning in their returns.

Michelle Obama, for example, earned a quite lucrative annual self-employment contract from the University of Chicago Hospital System (in some years, approaching $1 million).

Yet, she didn’t appear to have a self-employed 401(k) plan or equivalents. In 2000, after a 15-year career, the Obamas cashed out a whopping $6,260 from either a defined benefit pension or a 401(k) plan—a tell-tale sign of a household that does not plan ahead for their future. They have miniscule dividend income.

The answer to why exactly Barack Obama is so adamant on pursuing tax policies that would wreck America’s retirement savings could simply be that he himself has no stake in his own retirement planning. Certainly an enviable position to be in. But maybe I’m wrong. Could it be that he’s thinking ahead… counting on greatly increased tax rates when the accumulated savings will be withdrawn and taxed—wiping out any long-term benefit of financial planning? I wouldn’t put it past him.

Some of my colleagues like to blame the state of the American economy on the financially irresponsible behavior of the average American. Those who pull in good money but manage to spend every nickel of it, devoting more of their precious time to planning their vacations than to providing for their future.

Looks like America’s going to get the president it deserves.

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