As we age cognitive skills decline in varying degree. This dynamic process specifically impacts well-being and how society assimulates and protects seniors. Skills affected can include motor skill, the ability to learn new information, reaction time and memory. Reviewing the ways in which cognitive aging could affect individuals provides useful insight for policymakers, financial planners, career counselors and the individuals themselves.
Cognitive ability is commonly defined as 1) fluid intelligence or the ability to acquire new information and 2) crystallized intelligence or having knowledge.[i] Changes in the rate of cognitive ability vary by the skill type. Fluid intelligence can start to slow in the 30-40’s as reaction time deteriorates and the ability to learn new information becomes more difficult. On the contrary crystallized intelligence can continue to retrieve known information well into the 70s and 80s. See how your brain changes and some tip for Brain Boosters
With cognitive abilities declining at different rates, real-world performance depends on the situation. Where known facts and skills play an important role, like running a household budget a decrease may not manifest itself until one’s is in their 70s or 80s. Disruptive technologies are no doubt raising the frustration and risk that elderly individuals skills will not be relevant in normal day to day activities. The known skill of driving a car on familiar roads is supported by past experience. Add to that night driving and a decreased motor reaction skill set, and the ability to drive safely decreases. In situations where an individual has little or no relevant experience, such as learning to manage and govern the responsibilities of life savings after retirement, the new tasks are materializing while memorization and new function skills are declining.
Aging and Well-being - Direct impacts and themes for managing retirement security and needs.
Cognitive aging is becoming better understood by researchers, The Center for Retirement Research at Boston College. Advisors, planners, consultants, and policymakers should also understand the needs and risks of aging. A limited likelihood to stay in full employment, along with increased financial management responsibility can create a perfect storm.
In this series on aging, we will look deeper into the housing, employment, and financial management situations for seniors and those approaching retirement.
Merriam-Webster’s Collegiate Dictionary (2010).
John Kirby is a co-founder and Principal of Laurentide Advisory