Super should cater for cognitive decline

Cognitive limitations and changes in processing speed impact how Australians in retirement make financial decisions, and research from the ARC Centre of Excellence in Population Ageing Research (CEPAR) in collaboration with Neuroscience Research Australia (NeuRA), said altering the choice scope of superannuation to cater could be the solution.

CEPAR chief investigator at the University of NSW, Kaarin Anstey, said about eight per cent of Australians in their 60s experience mild cognitive impairment.

CEPAR chief investigator at UNSW Business School, Hazel Bateman, said Australians nearing retirement score higher in tests of financial literacy than younger people or those in other countries, but that half of them answer basic questions about inflation, interest rates, and diversification incorrectly.

Related News:

“As the population ages and more people face cognitive limitations, we need to consider whether the choice architecture of superannuation can cope,” said Bateman.

Some recommendations from the study suggested better regulation of information provision, financial literacy initiatives for the elderly, and protections against poor financial advice to vulnerable consumers could aid elderly financial decision-making.

Bateman said CEPAR would research how the “oldest old” process information relating to the Australian retirement income system.

“The need to allow individuals their financial freedom while mitigating confusion and poor decision-making among this age group is something that has yet to be reconciled in the literature and in policy,” she said.

 




Related Content

Planners showing increasing interest in annuitisations for clients

Financial planners are showing increased interest in staggered annuitisation products as they help clients prepare for uncertain retirements in a time...more

Advice necessary on sustainable retirement

There is a place for ongoing advice for superannuated retirees to keep them better informed about what they can afford in terms of sustainable draw-do...more

Pressure on Govt is relieved by delayed retirement

A new survey from Roy Morgan revealed that Australians intended to delay their retirement, with the average age of those intending to retire in the ne...more

Author

Comments

Add new comment