Social security was assured in most traditional societies.
The traditional society ensured that elderly and disadvantaged members were taken care of by other members of their families.
Since the dawn of civilization, things have changed drastically; thanks to industrialization and modernization of economies.
With the adoption of capitalism in many countries; an economic system characterized by private business ownership, there have been a significant change in social and economic lifestyles.
The civilization saw a major shift in the way that many people lived; people are driven with the need to increase wealth.
This has encouraged many people to work very hard during their active working life in order to save money and live a better old age life.
Breaking down the traditional systems that ensured security from members of the family in old age.
In our society today parents will not be able to depend on their children for their upkeep in old age due to a breakdown in the traditional systems that provided security in old age.
Over the twentieth century, most civilized countries retired men became much more independent.
In 1880, nearly half of retired men lived with children or other relatives. Today, fewer than 5 percent of retired men live with relatives.
As an early American entrepreneur, Ben Franklin worked hard to expand a small printing business and set himself up to retire in 1747 at age 42.
Fortunately, civilization offers other ways of ensuring security in old age.
Most developed countries have systems to provide pensions on retirement in old age, which may be sponsored by self, employers or the state.
Today, retirement with a pension is considered a right of the worker in many societies. In many western countries this right is mentioned in national constitutions.
A retirement benefit scheme can be seen as a form of insurance; members of the scheme pay premiums while working to cater for the period when he/she will not be earning later in life.
Retirement plans are mainly offered by insurance companies to help individuals to build up a sum of money that can be used in retirement.
The scheme protects members against the risk of poverty in old age by ensuring that they are able to provide for themselves in retirement.
The retirement benefits offered by Insurance companies’ guarantee the funds put into the scheme by clients and offers a minimum rate of return as well.
A good number of Life Insurance companies offer Retirement Benefits Schemes; this includes Employer Pension Plans and Personal Pension Plans.
In order to retire permanently from the labor force, one must have enough resources to live on to the end of the expected life span.
In retirement, one can live on pension income, accumulated savings, and anticipated contributions from family and friends.