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How Retirement Plan Sponsors Can Address Cognitive Decline

SSGA contends there are things retirement plan sponsors can do to help participants prepare for retirement before their mental capacity begins to wear away. Financial advisers may have to deal with retired clients’ cognitive decline, but State Street Global Advisors (SSGA) contends there are things retirement plan sponsors can do to help participants prepare for retirement before their mental capacity begins to wear away. Source: Planadviser.com

Key Article Quotes:

Harvard behavioral economist, David Laibson, states that “fluid intelligence—the ability to learn and adapt, declines rapidly over time; and Crystallized intelligence—wisdom learned from experience, increases over time.”

Laibson’s research found that “cognitive performance, which draws on both fluid and crystallized intelligence, peaks when people are in their 50s.”

Fredrik Axsater, global head of defined contribution at SSGA, advocates holistic approaches to financial wellness…”while raising financial literacy is a good thing to do, participants are more receptive to education at “inflection points” in their lives, such as getting married or buying a home.”

Axasater says, “I think plan sponsors should evaluate all different forms of periodic payments, but we see in-plan annuities that are part of a default are more effective,” he says. “If trying to address longevity risk, deferred annuities are best.”

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Cognitive decline

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cognitive decline

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