The Rising Risk of Cognitive Decline and Its Impact on Retirement Planning

- Global aging drives a retirement crisis as cognitive decline impairs financial decision-making, risking wealth erosion in 23.7% of elderly with mild cognitive impairment.

- Traditional DC retirement models fail due to poor decumulation planning, with 25% of U.S. retirees cashing out 401(k)s within one year of retirement.

- Three strategic solutions emerge: default annuities (12% adoption rate), longevity-focused funds ($1T market by 2030), and AI tools ($22.6B market by 2025) to automate risk management.

- Policy reforms and cognitive health screenings are critical to address underdiagnosed dementia cases (61% detection rate) and protect vulnerable retirees from financial exploitation.

https://www.ainvest.com/news/rising-risk-cognitive-decline-impact-retirement-planning-2508/