FORTUNE -- President Obama's proposal to limit the value of 401(k)s, pensions, and other tax-favored retirement accounts to about $3.4 million certainly sounds reasonable. After all, at a time of big budget deficits, we shouldn't subsidize "the rich" with tax breaks, should we?
But when you look a little closer -- especially when you look at the value of President Obama's taxpayer-funded retirement benefits -- you might think a little differently about what "rich" means. For starters, the point at which Obama wants to eliminate your ability to deduct retirement account contributions isn't actually the $3.4 million in his budget proposal -- that's just an estimate. The real number is how much a couple age 62 would have to pay for an annuity that yields $205,000 a year. That $3.4 million -- which applies to the combined values of your pension and retirement accounts -- is subject to a sharp downward change in the future because annuity issuers charge significantly less for an annuity when interest rates are higher than they do today, with rates at rock-bottom levels.
I'll grant you that $205,000 a year -- the current IRS maximum for what a pension fund can pay a recipient -- is serious money in many places. But it doesn't buy you a rich retirement lifestyle in, say, Manhattan, N.Y., where 205K is equivalent to only 88K in Manhattan, Kans. The Manhattan-Manhattan distinction, from Money's cost-of-living comparator, is an example of the difference between being rich statistically and being rich in reality.
Second, I can't get past Obama wanting to limit savers to only about half the value of what he stands to get from his post-presidential package. Based on numbers from Vanguard Annuity Access, I value his package at more than $6.6 million. (My calculations are at the bottom of this piece.)
That's right, $6.6 million. And that doesn't include the IRAs in which Obama has been socking away the $50,000-a-year maximum, or the $18,000 (plus cost of living) a year he will get at age 62 for his service in the Illinois senate, or any other benefits he or his wife may realize from past or future jobs.
