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The cognitive correlates of functional status are essential to dementia case-finding. The authors have used structural-equation models to explicitly distinguish dementia-relevant variance in cognitive task performance (i.e., δ) from the variance that is unrelated to a dementing process (i.e., g′). Together, g′ and δ comprise Spearman's “g.” Although δ represents only a small fraction of the total variance in cognitive task performance, it is more strongly associated with dementia severity than is g′. In this analysis, the authors test whether δ can predict future cognitive decline in persons clinically without dementia at baseline. These results have implications for the clinical assessment of dementia and suggest that functional status should assume a more important role.