Does Rubio have a spending problem?

Washimgton Post ^ | May 20, 2015 | Sean Sullivan

[Second Amendment First]

Marco Rubio made $174,000 as a U.S. senator last year. He earned $52,000 from book royalties and a university teaching position, and at least $5,000 more from rental property.

And yet, the 43-year-old Florida Republican also made what is typically viewed as a desperate financial maneuver — cashing out nearly $70,000 in retirement funds.

As Rubio runs for president, newly disclosed personal finance details have drawn fresh attention to a long-running problem during his political career: his struggles with money.

Rubio is one of the least wealthy senators or presidential candidates, offering a potential contrast with rivals such as Hillary Rodham Clinton (D), who charges eye-popping sums to deliver speeches, and Jeb Bush (R), who comes from a well-heeled family.

But the problem isn’t so much his income; it’s his spending. Over the years, Rubio’s spending habits have drawn regular scrutiny from opponents and have put him in an uncomfortable spot.

In his 2010 Senate campaign, for example, Rubio battled attacks over his questionable usage of a Republican Party credit card for personal expenses. He also purchased a stake in a rental home that at one point faced foreclosure and is now likely to be sold for less than the purchase price.

In new disclosure forms filed by Rubio last week, he revealed that he sold $68,241 worth of retirement funds last September. Experts say such a move tends to reflect an extraordinary need for immediate cash, since it comes with a sizable tax penalty.

“It means that he is probably on some level living above his means, because he is borrowing against his future,” said Boston University economist Laurence Kotlikoff.

[ConstantSkeptic]

There is no way, no how, for this to be good cash management.

If the retirement plan is a conventional 401(k) or IRA, Rubio got a deduction for his contribution in the year contributed. The tax is deferred until a distribution takes place. Rubio triggered that event last year, so he would have $68,241 in ordinary income for 2014. Rubio is in at least a 28% tax bracket, so he would pay $19,107 in taxes in 2014. Moreover, since Rubio is not 59½-years old, there is a 10% penalty of $6,824. I don’t know how much money Rubio needed, but his $68,241 distribution cost him $25,931 in taxes, leaving him with $42,310 of spending money.

Well, I guess it was cheaper than a payday loan.

But still a dumb way to get your hands on cash.

[terycarl]

Who's business is that at all except his???

maybe he wants to pay cash for a Ferrari or whatever...he is a very intelligent person and can certainly provide for his retirement....

[highball]

It’s our business if he wants to be our president. Heck, it became Florida’s business when he decided he wanted to be a senator.

He has a history of bad fiscal decisions. It ought to disqualify him from ever getting anywhere near the taxpayers’ money.

[Always A Marine]

Right now, I’m a Cruz guy, but I think the REAL lesson here is that he, at least at the present, is NOT on the take, like most of his other Congressional brethren. But weak financials also means he might be more easily coaxed into crooked deals.

I'm also a Cruz supporter, and agree with you. Let's remember that Thomas Jefferson was also terrible with his own money and died bankrupt, yet was a good steward of the public trust. It was Jefferson who launched the Barbary Wars because he deemed the $300,000 jizya demand too much for American taxpayers to bear.

[aMorePerfectUnion]

If he did this because he no longer wanted his money tainted by the governments. If he no longer wanted to invest for the government. If he wanted to invest without the limitations of being a serf...

Fine.

[ponygirl]

I don’t trust Rubio. He’s like one of those Border Reivers of yore who would turn their badge over once they saw which direction the fight was going.