Briefly Noted

    Health Privacy Rules Prompt Need for Medical Trust Checkup

    “The Health Insurance Portability and Accountability Act (HIPAA) was designed to protect medical privacy by, among other things, preventing doctors from speaking freely about a patient’s medical condition without consent. But his well-intended law may create a problem if … you’ve given power of attorney to someone to take care of your medical and financial needs in the event you become incapacitated.

    “Most power of attorney documents or trusts that appoint a trustee in such events are triggered only when you become incapacitated. Therein lies the problem. Under HIPAA rules, the person you have designated to act on your behalf may not be able to secure enough medical information to ascertain your incapacity.

    “The solution for a power of attorney is to prepare an HIPAA authorization form that permits the person you designate to act on your behalf to have access to your medical information. If you have a trust, the procedure to enable access to your medical records is more complicated, but is no less necessary. In either case, check with your attorney.”

    Jonathan Pond’s Quarterly Investment Review, Fall 2004, Watertown, Mass,

    Living in Retirement: By the Numbers

    A recent study of new retirees reveals a money-worried, cash-strapped group, dependent on Social Security—yet still satisfied with their retirement lives, showing there’s more to happiness than money.

    The survey of 2,000 people retired within the past two to six years was sponsored by Putnam Investments. Among the study’s findings:

    Financial Status

    • Average household income is $49,000; median (midpoint) household income is $34,000.
    • 50% are living better than in their working years and 50% are living on less.
    • 20% are “struggling” financially.
    • 41% are concerned they’ll outlive their money.


    • 11% of retirement income comes from self-directed retirement plans, other investments and savings.
    • 24% of retirement income comes from traditional pension.
    • 41% of retirement income is provided by Social Security.

    Financial Plans

    • 16% of recent retirees had a formal, written financial plan.
    • 20% have a systematic withdrawal plan of their investable assets; on average, they take out about 6.7% a year.


    • 27% of recent retirees would rather be at their old job than retired.
    • 59% wish they’d started saving earlier.
    • 70% wish they’d saved more.
    • 84% are “satisfied” with their new life status.
    “The Truth About Retirement—Advice From the Recently Retired,” Putnam Investments, Boston, Mass.

    News You Can Use: Slower Increases in Interest Rates

    “Based on recent economic trends and Federal Reserve comments, it is now more likely that the rise in rates in the next year will be more gradual than originally expected. Recent data on retail sales in the U.S. indicate that consumers are feeling the pinch of sharply higher energy costs, with more muted spending in the “back-to-school” market now evident. For interest-sensitive investors, this is news you can use. For those investors now more heavily weighted toward fixed income, a more gradual rise in rates is good news for their existing portfolios. In addition, a more gradual rise should be greeted well by equity investors, as the shock of higher rates could temporarily cause them to hold off on investing in stocks or take profits on those they do own. Only if the expected rise in rates turns into a sharp fall should investors and consumers be concerned—as that would indicate an economic downtrend and possibly even a recession. Overall, we favorably view the expected, more gradual, rise in rates and await further clarification on economic trends and Fed policy in the months ahead.”

    Gene Pisasale, CFA, assistant vice president, Wilmington Trust

    Getting the Credit Report You Deserve

    Your credit record, as prepared by a credit bureau, is a summary of your history of paying debts and other bills. Under the new Fair and Accurate Credit Transactions Act, you will have the right to obtain one free copy of your credit report from each of the three major credit bureaus every 12 months. Rules issued by the Federal Trade Commission (FTC) provide for free credit reports to become available in stages—in the western states the requirement began December 1, 2004, and it is gradually moving east, with completion due by September 1, 2005. (For a complete list of effective dates, see the announcement on the FTC’s Web site at

    Most experts say you should check your credit report at least once a year from each of the three major credit bureaus:

    FDIC Consumer News, Fall 2004.