Neurologists are increasingly faced with the daunting task of disentangling dementia from primary psychiatric conditions or recognizing their coexistence in older patients. Both schizophrenia and bipolar disorder are characterized by substantial intergroup cognitive heterogeneity among older and younger patients. In schizophrenia, deficits in many cognitive domains are common; however, "rapid forgetting," loss of crystallized knowledge, and greater than age-normal declines in cognitive function are rare and warrant careful evaluation for secondary causes. The cognitive deficits associated with bipolar disorder tend be most severe during acute affective episodes, but some deficits tend to persist even during periods of relative euthymia. Lifetime number of affective episodes in bipolar disorder may adversely affect cognitive functions in bipolar disorder, but severe deficits and/or substantive declines over a period of a few years are unusual and warrant careful evaluation for secondary causes.