It Won’t Happen To Me

Optimism bias. I would not label myself as “optimistic.” But I am not pessimistic, either. To me, “optimism” conjures up the chorus from the R.E.M. song: “Shiny, happy people holding hands.” Not the image of how I approach life. No, I do not believe things will get better and better, but I do not believe they will get worse and worse. I believe, like most human beings, that they will stay the same. This is one version of what behavior experts call “optimism bias.”

If it was sunny yesterday, it will be sunny today. If I am healthy today, I will be healthy tomorrow. In fact, I will be healthy forever. Ok, not forever, but for the foreseeable future. Well, ok, maybe not. But probably nothing will go wrong. I am 47 years old and in good shape.

In December I had my checkup. Everything was sailing along as the doctor checked my blood work. Normal, normal, normal. (Yeah, yeah, yeah, why do I even get physicals? I am normal and have been all my life. Things will stay the same.)

Then she paused. “Ok, Holly, so what we have here is an elevated….” (What? Wait, this sounds permanent. As in chronic, but not life-shortening. Great, I have to take a pill now.) Things will stay the same. Until they don’t.

At a symposium last Monday, I heard Dr. Lisa D’Ambrosio from MIT’s AgeLab describe her research on aging and driving. Imagine you live 200 miles away from your 81-year-old father. When you visit, a few things seem a little off. Maybe he shouldn’t be driving that clunker he loves so much. But you have to get back home. Surely things won’t get worse. And you won’t have to confront him. Things will stay the same.

Lately the Dow Jones Industrials have climbed to record highs. People are piling in. Stocks went up yesterday. They will go up tomorrow, right? Things will stay the same.

It is not possible to hedge against every unforeseen event. However, we can look at the stats on what events are more likely than others. You live in Florida on the water, you are more likely to have wind and flood damage. Both of your parents and their parents had cancer, you are more likely to have cancer. Afraid of flying? You are more likely to be killed on the way to the airport than on the flight. Have longevity in your family? Dementia is more likely to be part of your future.

One of the areas I receive the most resistance from is long term care insurance. I do not sell long term care insurance. I just try to get people over 50 to buy it if a $500,000 – $900,000 dent in their future net worth might impoverish them. It is difficult, though, to plunk down premiums of $4000-$6000 now for some unknown so far in the future. This is optimism bias at its worst. Once you begin to show small symptoms, it is too late. You cannot get coverage. Got a parent or spouse with optimism bias? Insurance coverage may not be the prettiest gift, but it may bring the most gratitude later.

For the middle stages of Alzheimer’s, when we can dress and bathe ourselves, but cannot be left alone, there is no caregiving coverage from Medicare nor Medicaid. Asking a family member to serve in this role is asking a lot.

Long term care insurers are the only outside source available for covering in-home caregivers, who will be in high demand by 2030. At $15 per hour, even twenty hours a week in the early stages adds up to $1200/month (in today’s dollars). The average life expectancy from diagnosis is eight to ten years. (See the website of the Alzheimer’s association: for the seven stages of dementia). And insurers are getting more picky.

If you can’t imagine yourself needing a caregiver, a wheelchair, or even a daily pill, that’s human and that’s ok. Just think about the statistics, though, for those you love. Might it make sense to spend something now to avoid regret later? One thing I know: things stay the same, for a while, until they don’t.

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What’s in Your Notebook

For many families, especially those in Florida who move from elsewhere, the holidays are the only time every one or two years when adult kids, parents, grandkids, and grandparents get to see each other. That time together is ideal to let your family members know where you keep “the Notebook.”

The Notebook is my term for a central place you keep information “in case something happens to you.” I find many people have some kind of a notebook or desk drawer, but often have a few items missing.

What do you keep in your Notebook that you want your family members to know? Write me with your ideas at and I will compile them for a blog post and for the next newsletter. Let me know in your email if it is ok for me to use your name and your city.

Common and essential items in the notebook include:

* Your five basic estate planning documents: original will (drafted by an attorney in the state where you now reside), living will, health care surrogate, durable power of attorney, and HIPAA designations;

* Advanced estate planning documents if you have them: trusts, partnership agreements, business buy/sell agreements, shareholder agreements, etc.

* Insurance policies. ALL of them: life, long term care, health, property, car, boat, liability, and any others.

* Contact information for all professional advisers: attorneys, bankers, accountants, investment advisers, insurance agents, and of course your personal CFO or financial planner. 🙂

* For each adviser, make a note about what document or issue they helped you with.

* Also, if your adviser has an assistant or paralegal who knows you and your situation, write down their contact information and a little note to that effect. (“Sharon is the assistant and she runs the whole place.”).

* All of your health care providers – doctors, dentist, optometrist, veterinarian (who is going to take care of Fluffy?). Put similar information by each one – what they helped you with and if any office or nursing staff know you and your history.

* Directions on how to find your financial stuff: online user ids and passwords, bank statements, investment statements, real estate deeds and mortgages.

Not-as-essential items some people include:
* An “ethical will” outlining your values. When they are having trouble deciding what you would have wanted, they can refer to your ethical will for guidance. ( or

* An end-of-life health care management booklet like Five Wishes (

Think of your Notebook as a trail of bread crumbs to help your loved ones work backward in your footsteps. A investment of time to leave an easy-to-follow “trail” is one of the best holiday gifts you can give.

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