Cognitive decline: The importance of awareness and advance planning

For an aging population, cognitive decline is an unnerving challenge on numerous levels. Expected longevity has jumped more than 10% since 2000, according to the Society of Actuaries. The average 65-year-old man can be expected to live into his mid-80s, one-fourth live past age 90, and 10% live past 95. The average 65-year-old-woman has an even longer life expectancy. Affluent individuals have actuarial life expectancies beyond the averages and often have complex financial considerations requiring high levels of cognitive function. Although increased life spans bring great benefits, the potential for cognitive decline is an important consideration for financial advisers. Dementia is defined as the loss of cognitive and mental functions severe enough to impair a person's daily functioning, and estimates indicate that nearly 15% of Americans over age 70 suffer from some form of dementia. Cognitive decline can jeopardize hard-earned financial security at a time in which clear-headed decision-making may be most important.