Why social security matters

Why do we need social security?

The right to social security is a basic human right. According to articles 22 and 25 of the United Nations Universal Declaration of Human Rights, access to social security is a fundamental right. Social Security (minimum standards) convention no. 102, adopted by the International Labour Organization (ILO) in 1952, also sets minimum standards for social insurance in important areas of social security.

Social security drastically reduces old-age poverty. It protects investors from inflation and market volatility. Social security provides a soft landing in the event of unemployment, illness, widowhood, disability, and old age. When people work, they often take social security for granted, but it's best to understand how it works, what it provides, and what the real facts are about their future.

Social security is similar to an annuity in that workers pay into the system while they work and receive a monthly annuity when they retire. But the difference is significant. Social security benefits are based on a balance between two principles: equity and adequacy. Some would ask why it then is compulsory. Equity means what you invest is tied to what you get. In other words, higher-paid workers contribute more to the system and then receive more benefits. But under the matching principle, the social security benefit formula ignores low-income years (as when workers may be disabled or unemployed) and substitutes more income for the poor than for the rich. So it's a successful anti-poverty program.

In addition, social security benefits are indexed to inflation and protected from economic and financial market fluctuations. Therefore, the program provides security for the working class. Privatization would eliminate the idea of guaranteeing a decent minimum income to pensioners who have worked all their lives. Low-income workers are less likely to have enough money in their personal accounts to maintain a decent standard of living in retirement. Even middle-class workers are more at risk of poverty as they age. It is in the nature of financial markets to generate uneven returns. Many ordinary workers can't get enough money from other sources to make ends meet.

Market volatility: some generations retire during the protracted recessions that periodically hit the market, and their investments are eroded. Those living in the 80s or 90s will likely outlive their personal bills, or if they bought annuities when they retire, inflation will erode those annuities. The elderly were an age group with a particularly high level of poverty. One of the notable achievements of social security, barely noted today, is the dramatic reduction in the poverty rate for the over-60s. For millions of older people who would otherwise fall into poverty, social security is the main source of income and the financial cornerstone of their lives.

Working-age children indirectly benefit from social security programs since the elders no longer have to move in with them. People under 60 also benefit from two other often overlooked elements of social security: long-term disability benefits and survivor benefits for survivors (children and spouses) if the worker dies before retirement. Social security was never intended to be the sole source of retirement income for the middle class, who ideally also had employment-based retirement plans and personal savings. But social security's unique value becomes clearer when you think of these different income streams as portfolios that make up retirement funds.

While other assets tend to decline or depreciate with age, social security pensions retain their value as they adjust each year with the cost of living. In such circumstances, social security offers valuable protection against the financial markets. Social security works because it is a contract that applies to all income groups. If the system were 100% voluntary for all, the wealthy would leave the system and it would become a welfare program without the political influence that comes with universal participation, and the result would be a self-perpetuating recession.

Social security works because it's been a contract that has been going on for generations. The basis of social security programs is that they are paid in full, with employee contributions used to pay current retirees. Future social security recipients, like past recipients, ultimately depend on the next generation of workers to pay their contributions and maintain the system for themselves and their children. Key takeaway: social security protects people from all kinds of risks, guarantees a basic income in old age, and enables many who have worked all their lives to retire with comfort and dignity. Depriving them of their rights would be a crime.

In Zimbabwe, social security is the preserve of NSSA and they regularly post their activities on their social media platforms. It’s always best to know whether you are covered and what benefits you are entitled to. Their social media accounts are nssazw on TikTok, Youtube, Facebook, and Instagram. If you want to know more you can follow them. Social security issues matter to everyone and it’s important to always be up to date with current information. To make it easier for you to follow NSSA kindly use the below links to follow them for regular and official updates;

https://www.tiktok.com/@nssazw - TikTok

https://twitter.com/nssazw - Twitter

https://www.facebook.com/nssazw - Facebook

https://www.instagram.com/nssazimbabwe/ ?- Instagram

https://www.youtube.com/@nssazw2734 – YouTube

https://www.dhirubhai.net/company/national-social-security-authority-nssa/mycompany/ - LinkedIn

?Disclaimer: Kindly note the views expressed in this post are my own.

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