Answer the following questions regarding Social Security.

a. Define Social Security. (2 pts)

b. How exactly does paying into Social Security affect your retirement savings? (2 pts)

c. Suppose you are 40 years old and plan on retiring in 25 years, and then living for another 15 years after retirement. Your current income is $70,000 per year. If you pay $3,000 in Social Security taxes each year, how much do you need to save per year in order to have enough to replace 75% of your preretirement income at retirement when combined with Social Security (assuming no increase in wages and that your rate of interest will exceed inflation by 4%)? (4 pts)

d.The present value of ones future labor income is called_____. (2pts)