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Investing Blog Roundup: Interest Rates and Social Security

From time to time I receive emails from people using the Open Social Security calculator who want to know: why is it giving me a different answer than it gave me last time I ran it?

The answer (unless you’re changing inputs on your own) is usually interest rates. By default, the calculator automatically pulls in the yield on 20-year TIPS to use as the discount rate. And that yield changes over time. For instance it was 1.07% at the beginning of this year, fell to as low as 0.07% in August, and is now back up to 0.41% as of this writing.

Point being: claiming Social Security early (in order to keep a larger portion of your portfolio invested) becomes more/less attractive as interest rates rise/fall. For those who wish to experiment with this input in the calculator, you can check the box for “advanced options” at the top of the page and adjust the discount rate for yourself to see how the output changes.

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My new Social Security calculator: Open Social Security