Ah, thanks for that. I was trying to figure out how their discounting works. But yeah, SS is insurance. They need the large pool to subsidize low income and disability payments.^ that's not how the calculation works
the first segment rate is used to discount the first 5 years of payments, the second rate is used to discount the next 15 years (years 5 to 20)
also, you don't fix the pv calculation at life expectancy, the pv is a mathematical expectation so you need to assume a little piece of you dies each year until you are 100% dead (end of mortality table)
SS will never allow cashouts, the monies are needed for the insurance pooling feature of SS
let me know if you need a lump sum factor at age 67 using those rates, the problem is, the rates need to be shaved for a future CPI assumption
Don't know what the contribution rates are in previous years but 12.4% OASDI works out to 54,595 in contributions at the first bend point. At 5% APR, that's 152,606 after 35 years (earning 826/mo). That's 5.8% inflation-adjusted withdrawal rate, tax-free so very good deal for really low income.