Coping With America’s Coming Cognitive Decline

Laibson, who has done a lot of research over the years on retirement savings, is most concerned about the impact in that age group. Perversely, government policy in the U.S. has long protected savers in their 40s and 50s while generally leaving those in their 70s and 80s to the wolves. That is, the 401(k) plans in which people stow most retirement savings while they’re still working are governed by the Employee Retirement Income Security Act, which requires plan sponsors (employers, mostly) to act as fiduciaries who have to look out for the best interests of plan members. The Individual Retirement Accounts into which people often roll over those 401(k) balances when they retire are not.

This is useful context for understanding the Obama administration’s big push to require brokers to act as fiduciaries when advising clients on their retirement savings. It’s much harder to argue that brokerage clients are grown-ups who should be able to look out for themselves when you consider that the most important clients for brokers peddling retirement products are people over the age of 65 who are facing a rapid decline in their ability to make smart financial decisions. This rapid decline, and the aging of the baby boomers, also makes me wonder about the political system in the U.S. (and other aging nations) over the next few decades. If you don’t like the decisions voters make now, think of what it will be like as the percentage of voters with cognitive impairments grows. The share of impaired elected officials may grow, too. After all, Donald Trump will turn 70 next year. Hillary Clinton will get there in 2017.

Then again, Ronald Reagan turned 70 a week after taking office in 1981, and he’s generally seen as having been quite an effective president. There are signs that he was suffering from cognitive decline in his second term, but he had an infrastructure around him to aid in decision-making. Also — and this is important — he didn’t have to drive anywhere.

The evidence on driving is similar to that on answering questions about percentages — people start to get significantly worse at it in their late 60s, and per-mile fatalities really spike around age 80. I have reason to hope, though, that advances in self-driving vehicles will bail me out and that, like Ronald Reagan, I won’t have to drive after I’m 70.

New technologies could compensate for cognitive decline in other ways, too, just as Reagan’s aides surely did for him. I already rely on Google and Evernote to remember things for me, and I carry around a calculator app on my smartphone that can help me if I’m having trouble with my percentages. There are those who argue that these tools make us dumber, and they may be right, but for those on the decline side of the cognitive function curve the effect has to be mostly positive. I’m not exactly thrilled at the prospect of the singularity, but if machines can make us all smarter and safer in our declining years, that’s a pretty big upside.