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Retirement Planning > Spending in Retirement > Required Minimum Distributions

Meeting the Minimums

By Bill Miller

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Mr. Saarf, my seventh-grade geography teacher, once pulled me into the hallway to give me what I’m sure he thought was a motivational speech. He said he was disappointed in me because, although I was meeting the minimums, I wasn’t doing as well in his class as he thought I should be. I can’t remember the entire conversation, but I do recall one memorable tidbit: “Mr. Miller does just enough for Mr. Miller to get by.” For dramatic effect, he returned to the classroom and left me alone in the hall to ponder my wasted lifetime of 12 years.

After a couple of Pabst Blue Ribbons and a cigarette in the boy’s restroom, I returned to my class and tried to make sense of what Mr. Saarf had just said. Maybe he was right. Maybe I was a minimum requirement kind of kid. I mean, c’mon, if the teacher said to write a 10-page paper, I certainly wasn’t turning in 11 pages!

This lifestyle has served me well for many years. Meeting the minimums has never been a problem for me — or at least that’s what I thought. Recently, I was thumbing through a local upscale magazine and came across a full-page color ad for a financial advisor. It was a beautiful ad. In the center was a big, happy picture of his entire staff.

Seated front and center was the advisor himself. He had this little smirk on his face that I couldn’t quite figure out at first. As I looked closer, I noticed a line directly under the advisor’s smirky mug: “Minimum aggregate accounts of $3 million.” OK, I guess I’d smirk a little too.

As I thought about it more, though, it hit me: “I don’t meet this guy’s minimums!” Why would an advisor want to set such a high minimum? Doesn’t he like dealing with guys like me? Doesn’t he want my hard-earned $2,000 IRA contribution every year?

I understand the approach. You, as an advisor, want to be able to provide the highest level of service to your clients. To do that properly, you can’t have too many clients. And if you can’t have too many clients, then the ones you do have had better be able to bring home the proverbial bacon. Larger accounts equal larger fees. I get it.

Just be thankful that other professions don’t operate this way. Imagine visiting your doctor’s office for a complete physical. You’ve just had all your vitals taken, donated every type of body fluid possible, and turned your head and coughed. You sit down to talk with the doctor, and he says, “I’m sorry, Mr. Miller, you’re too healthy. Unless you can commit to three surgeries and two outpatient procedures this year, we can’t take you. We have our minimums, you know.”

So what do you do if you’re left out on the other side of the minimum? Feel free to borrow one of my tricks. Whenever I’m excluded, I immediately start to think of all the reasons I wouldn’t want to do what I was excluded from.

For example, when I do get my minimum aggregate accounts to $3 million, there’s no way I’m visiting Mr. Smirky. In my head, he would send an environmentally hazardous stretch limo to taxi me to his office. Classical music would be blaring from his iPod-fed Bose speakers. There would probably be some really fancy lunch with Grey Poupon that I’d have to choke down as well. Nope. Not a good match for me. [End of trick.]

As for Mr. Saarf and the $3 million minimum, let’s hope he never finds out that I didn’t live up to his predictions. So far, this is one minimum where I just can’t seem to do enough to get by.

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Once a mildly amusing comedian, Bill Miller now works as an industry wholesaler; reach him at [email protected].

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