A. Funding

Social Security's funding source is established as a pay-as-you-go system. Funding for the trust fund is provided by today's workers, and money flows back out as monthly income to beneficiaries. This is different from many pension systems, which are “pre-funded.” In pre-funded retirement programs, the money is accumulated in advance so that it will be available to be paid out to today's workers when they retire. The private plans need to be funded in advance to protect employees in case the company enters bankruptcy or goes out of business. Financial advisors regularly inform clients that Social Security should be viewed as one of the three-legs in a *491 sound investment/retirement plan. The first-leg should be Social Security, the second leg is company pension, and lastly, the third leg is personal savings. The metaphor of the three-legged stool was intended to “convey the idea that all three approaches were needed to provide stable income security in retirement.”

Currently, the Social Security retirement benefit is calculated using what the Social Security Administration refers to as “average indexed monthly earning.” This is the average of thirty-five years of work history. A formula is then applied to the indexed average to calculate the primary insurance amount (PIA). “The PIA serves as the basis for the benefits that are paid to an individual.” The formula that is used to calculate PIA also factors in changes in general wage levels over time through a system known as indexing.

A retiree can start collecting Social Security anytime from age sixty-two to seventy and the later the start, the bigger the benefit. Just how much bigger the benefit is depends on the year of birth. Americans born from 1943 to 1954 have a “normal” or “full” retirement age of sixty-six. A retiree who decides to withdraw before the age of sixty-two has the effect of receiving “25% less than their normal benefit if they cash in at sixty-two and 32% more than their normal benefit if they wait until seventy.”

Workers pay on average six percent of their earning annually into social security. The Social Security Administration has established *492 a cap on high-income earners for the year 2015; any income over $118,000 was exempt from the Social Security wage tax. Employers pay a matching contribution for a total combined contribution of twelve percent.

In 2013, the average worker made $44,888 a year ... This worker and his or her employer will each pay $2,783 this year [2014]. Approximately six percent of all workers will earn more than the $118,500 tax cap. Earnings above the cap now account for seventeen percent of the aggregate pay of all workers who pay into Social Security.