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Photo: Mint

Opinion | What expensive workers in their 50s need to do

Those in their 50s need a financial and work strategy to fight the effects of covid-19

The job massacre has begun. Across sectors and industries worst hit by the pandemic, cost cutting reduced salaries as a first step. But as reality bites that there is at least a two-year road ahead of economic downturn, and a real threat of global recession, the gravity of keeping the business viable is deepening. Those businesses directly hit for revenue have taken early steps to stop the bleed and others will take this route down the road.

If you are in your 50s, the pandemic and its ripple effect on health and wealth will hit you double hard. Hypertension, diabetes, heart conditions have been a part of the take-home package in the Indian workplace, putting you at a greater risk than a person with better underlying health conditions.

Zooming instead of lounge-hopping, self-isolating and working from home could keep the disease six feet away, but this pre-retirement age cohort can’t escape from the downward swathe of the job cut knife because of its peculiar situation of a person who is ageing, entrenched and expensive.

The mid-50s is the peak of an average career for people other than supermen-like Amitabh Bachchan. It also marks the highest income point of a lifetime of earning. By the time you are in your 50s, you have settled into the company you will retire from. The job-hopping for a salary multiplier is behind you. As you have “settled down", you have probably begun to get entrenched with the ecosystem around you.

You may also actively resist change or new ideas because it disturbs your carefully set-up professional life. If you suddenly look at yourself, you’ve become the person you hated when you joined the workforce 30 years ago. From the firm’s point of view, you are a very expensive resource, your CTC will finance several of mid-level resources. The expertise you think is irreplaceable may lose to the survival pressures of a firm looking to stay afloat. It is probable that such a person will be in the front line of a weeding out exercise across firms in the next few years.

The 50-something Indian organized sector white collar worker needs to have a financial and work strategy in place. Financially, zero debt is not an option, you have to pay off the loans now and have one fully-owned roof over your head. I would cut down lifestyle costs, tell the kids to figure out their own higher education costs, downgrade the five-day destination wedding, and work to consolidate a corpus that will sustain basic living if the job is hacked tomorrow.

If you don’t have your own medical cover and you think your firm’s cover is good enough, this is your wake-up call. Get your own cover fast. And remember this is an expense that will rise year after year as you age. Weed out the dud insurance plans that gave you little protection or return and conserve the money. Your term insurance can continue till the time you are fully financially free.

Rethink your asset allocation if you took too much risk through PMS products, alternative and exotic investments and higher-risk equity segments. The probability of a getting another high-paying job in the next few years is low. The probability that you will be tapping your corpus for living costs is high—have at least two to three years of living costs in a fixed deposit or a debt fund (only if you understand them or have a financial planner who is looking after the product choices).

But this is not enough. At this age and stage, you still have at least 30 years ahead of you of good to declining health. You need to think of a second career that you begin now, which will take you into your 70s. It is a good idea to take the ego out, wash it and hang it out to dry. It does not matter if you were the regional head of a large MNC, or a partner in a consultancy—what matters is the skills you have and how you are able to use them to earn a living income.

An income in today’s rupees that prevents you from dipping into your retirement corpus. A wise friend told me recently that 50s is a very good time to make career transitions—you have the wisdom of the 60s with the energy of the 40s. If you begin something new now, it will take the next few years of work to make it start paying off—whether it is a new enterprise or a consultancy or part-time work.

Nobody wants to be near bitter and cynical old people. A job loss at this age makes you a prime candidate for that set of attributes. This is your time to ensure that you don’t end up there. Use the energy that will be spent in fighting against this change to earn money and get your health back on track.

Monika Halan is consulting editor at Mint and writes on household finance, policy and regulation

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