Preparing for changes in financial decision-making capacity is essential for a secure retirement. Unfortunately, the majority of Americans are underprepared for periods of diminished decision-making capacity as they age.

Diminished capacity and lack of preparedness for it can have substantial financial and personal consequences. Examples include losses resulting from financial mistakes, conflict among family members, and vulnerability to financial exploitation and fraud. Today these risks are heightened as many aging people are socially isolated from their friends and relatives who would normally recognize indicators of decline.

To inform how we might encourage older adults to plan for the future, a multi-disciplinary team of researchers worked together to understand the barriers to and facilitators of advance financial care planning. This research will inform the development of a toolkit and website that will be ready in the first half of 2021. These resources will be very useful for individuals, financial planners, financial institutions, and non-profit and community groups that serve seniors and their families.

The research team – Naomi Karp and Steve Vernon, Consulting Research Scholars at the Stanford Center on Longevity, and Dr. Marti DeLiema, Assistant Professor at the University of Minnesota—recently published their research findings on the website of the Society of Actuaries. You can read their report here.

In addition, Karp and Vernon recently prepared written testimony for the ERISA Advisory Council, summarizing results from this research. Their testimony will help employers and retirement plan sponsors develop safeguards to protect their employees and plan participants.

You can read Karp’s and Vernon’s written testimony statement to the ERISA Advisory Council below.