In Quarantine, a Glimpse of What Retirement Might Look Like

Older Americans are at a high risk for serious illness from the coronavirus, and most who are over age 65 are covered by Medicare. Medicare already covers its enrollees for much of what they might need if they contract the virus and become seriously ill — and it has expanded some services and loosened some rules in response to the crisis. Here’s a look at what enrollees can expect from Medicare, some problems to look out for and some additional changes that advocates think still need to be made.

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My wife and I are both working from home, something we haven’t done before. Like most couples now, we’re together about 24 hours a day. I think the coronavirus is giving us a taste of what retirement might be like. I have heard this same idea from several people in the past few weeks. Yes, couples and individuals who are approaching retirement—and who suddenly find themselves sequestered in their homes—are getting a crash course in Life After the Office. And that’s a good thing. As we have noted several times in this space, many people think about, and prepare for, the financial side of later life, but fail to consider how they wish to spend their time in retirement, what the average day might look like. Don’t misunderstand: I’m not saying you can, or should, use this time to pick the path you plan to follow after you walk away from work. (Clearly, it’s difficult to try new pursuits or join new groups at a distance of 6 feet.) But sitting at home can give you a preview of—and, ideally, help you sidestep—some of the shocks that people experience when they first retire. Among them: Too much togetherness. You might be seeing this already: Some newly retired spouses end up tripping over each other. Both are adjusting to new routines and roles, and the kinks aren’t necessarily worked out in the first weeks—or months. “For some [retired] couples, just the fact that they’re both at home all day, every day, is difficult,” one psychologist told us. “And to expect that there be no frictions about how to fold the clothes or how to put things in the dishwasher—all the trivial stuff of life—just isn’t realistic.” Losing yourself. So…you’re home. Do you miss friends from the office? Do you miss being part of a team, part of a mission? It’s a problem new retirees face: losing a sense of one’s value. “Having burned both ends of the candle for 40 years, it was a shock to the system to suddenly find myself and my calendar no longer in demand,” one retiree told me. Bored and restless. Chances are good you’re wrestling with cabin fever. Something similar easily can happen when you first retire: You take your dream vacation, you spend time with your grandchildren, you clean out the basement—and you wake up one morning and ask: What do I do now? (I have heard the same, sad story countless times.) Fortunately, there are two ways to cushion yourself from these shocks. First, as we have urged readers many times, talk with your partner about your particular vision for retirement. The mistake comes in assuming that the person across from you shares the same dreams. And second, at some point, find the things—the activities, connections, relationships—that will get you out of bed each morning. Difficult? It can be. Important? More than you know. In a recent column, you mentioned that traditional Medicare, in most cases, doesn’t pay for eyeglasses or contact lenses. What about Medigap plans? Can I get vision coverage through Medigap? Good question. Most Medigap plans don’t offer such benefits. But if you look closely, you can find a few exceptions. Some quick background. Medigap, or Medicare Supplement Insurance, helps pay bills that Medicare doesn’t cover. There are 10 different Medigap plans, each denoted by a letter—A, B, C, etc.—and each offering different benefits and levels of coverage. Traditionally, Medigap plans haven’t covered items like vision or dental care. A person looking for such benefits typically needs to enroll in a Medicare Advantage plan, an alternative to traditional Medicare. Now, though, “there are Medigap plans offering coverage similar” to that found in some Medicare Advantage programs, says Neil Brown, a Medicare insurance consultant in Las Vegas. For instance, Blue Shield of California, in its Plan F Extra and Plan G Extra, includes coverage for eye exams, frames, eyeglass or contact lenses through a select network of providers—as well as some hearing-aid benefits. In Illinois, Mutual of Omaha offers a Medicare Supplement Vision Plan, with savings on eye exams, eyeglass frames and lenses. Again, such benefits aren’t common in Medigap policies—and, as a rule, tend to be modest. But if you’re in the market for a Medigap plan, you should keep an eye open for these options.

How could a microscopic organism destroy nearly $15 trillion in global stock-market wealth in five weeks? Until recently, many investors believed central banks and other policy makers had repealed the business cycle and that making money in the stock market was something you could take for granted—in much the same way that science and technology seemed to have beaten back diseases that had been the scourge of humanity for millennia. Maybe investors a century ago and more had a wiser view. They believed the world was governed by unseen, omnipresent powers that could be appeased but never controlled—and that financial panics were a form of divine retribution for the sinful excesses of prosperity. We shouldn’t regard market panics as quaint artifacts from the days of ticker tape and trading by telephone. Rather, they are forces that can be hidden or delayed but never eliminated. And believing that panics have become obsolete is a precondition for their recurrence. The modern history of financial markets is a chronicle of attempts to control risk—if not eliminate it. One after another, they have all failed. Crash Landing The downturn of 2020 could rival market pullbacks during past contractions but is far from the lows reached during the Great Depression.

“We trust these brilliant innovators in finance who seem to know what they’re doing when they try to control risk,” says Yale University economist and financial historian William Goetzmann. “And then, lo and behold, the risk mitigation doesn’t happen.” The Federal Reserve was created in the wake of the Panic of 1907 to mitigate the risk of financial meltdowns. Some thought the problem could be solved. As the stockbroker DeCourcy W. Thom proclaimed in his postscript to economist Clement Juglar’s “A Brief History of Panics” in 1916: “Just as modern medicine is overcoming the dangers threatening the physical man, so is modern finance overcoming panic and the other dangers which threaten financial stability.” He was wrong—as similar forecasts have been ever since. The Fed failed to stave off the crash of 1929 and, by not expanding the money supply in the early 1930s, probably worsened the Great Depression. In the mid-1980s, a computerized hedging technique called “portfolio insurance” purported to limit losses for big institutional investors; it ended up being partially blamed for the crash of 1987. In the mid-2000s, financial engineers created ever-more-complex derivatives as a way of carving up and spreading risk. That, Federal Reserve Chairman Alan Greenspan said in 2005, “contributed to the stability of the banking system” by allowing participants “to measure and manage their credit risks more effectively.” But risk can’t be removed; it can only be moved. The techniques hailed by Mr. Greenspan may have caused the financial crisis of 2008-09 by making bankers and investors so complacent that they never sufficiently tested whether their assumptions might be wrong. Contraction calculation Some economists are now predicting a pullback in gross domestic product that would rival the severity of the 2008-2009 slump.

Finally, in the run up to the latest panic, many investors seemed to believe index funds and exchange-traded funds, which can offer broad diversification at extremely low cost, had somehow eliminated the risk of owning stocks. Our forebears, on the other hand, believed panics are the indispensable hygiene of markets, sweeping the investing landscape clean after every orgy of prosperity. That notion was captured brilliantly by the illustrator Frank Bellew in a cartoon for New York’s “The Daily Graphic,” days after the onset of a market panic in 1873. An ugly giant straddles the street, sweeping up clouds of dirt and shreds of ticker tape labeled “BOGUS BROKERS,” “SHAKY BANKS” and “ROTTEN RAILWAYS.” He wears tattered goatskins, his hair tangling into horns as it rises from his scalp. The caption reads: “Panic, as a Health Officer, Sweeping the Garbage out of Wall Street.” Bellew personifies Panic as the god Pan, who haunted the countryside of ancient Greece. Half-goat, moody and mischievous, Pan was the god of herds, manipulating them with the music from his pipes. He lurked in mountain caves, arising at midday to burst out of nowhere at startled travelers. No wonder the ancient Greeks called a sudden fear “panikos.” It came from Pan. He was also the god of fertility. And financial panics, through the ensuing upheaval, fertilize old ground for new competitors and transfer assets to those who can put them to their best use. Out of the boom and bust in wooden turnpikes in early 19th-century New England came the rights of way that railroads later followed with ease through the forests and fields. Out of the mania for technology stocks that collapsed in 2000-02 came the glut of fiber-optic networks that make instant communication universal and cheap as dirt today. Looking for work It's not yet clear if unemployment will surpass the jobless rates reached during the longest recessions since the Great Depression.

So…you’re home. Do you miss being part of a team, part of a mission? It’s a problem new retirees face. PHOTO: MARTIN TOGNOLA

My wife’s Social Security benefit statement shows that she has 20 credits from her five years of employment. She is 55, and I am 56. I have worked for 35 years and plan to wait until I’m 70 before collecting retirement benefits. Would my wife get any benefits from having only 20 credits? And if I wait until 70 before collecting benefits, would she be entitled to collect any portion of my Social Security in her early 60s? The answer to both questions: I’m afraid not. Most people need at least 40 work credits to qualify for retirement benefits. (In 2020, for instance, a person earns one credit for each $1,410 of earnings, up to a maximum of four credits a year.) There are exceptions: Depending on their age, people who are disabled and/or survivors of family members who have died can qualify for benefits with fewer than 40 credits. But again, 40 is the magic number for most people. As such, your wife wouldn’t be eligible for retirement benefits based solely on her five years of employment. As for your wife collecting benefits in her early 60s, the answer lies in how spousal benefits work. In this case, your wife isn’t eligible for a spousal benefit until you file for your Social Security. If you wait until age 70 to claim benefits, your wife, given her current age, will first become eligible for a spousal benefit at 69. (The rules are the same if the roles were reversed.) Of course, your wife could add to her current total (if she has earned income) and eventually reach 40 credits. That would allow her, if she chooses, to claim Social Security as early as age 62, based solely on her work history.