I am listening to a Dutch podcast series called 57. In the series, Roelof Hemmen (57) talks with peers about what it’s like to be 50. The series makes me think about who I want to be when I am 50 or what I want to do with my life at that stage. I meet many people in a similar (50+) life stage. They have some things in common. In terms of their careers, I categorize some of the different types of people in their 50s.
The 50+ employee
The 50+ (Golden) Cage employee
The (Golden) Cage employee is not motivated. He is doing the bare minimum just till he can finally retire. This employee has a high income and high job security but has low promotion possibilities (stagnation).
The 50+ employees have 10+ years of experience in the same company. I call this person the Golden Cage employee.
This employee is often in “a golden cage.” This person is stuck in the business and the legal framework around it. Their company has bound them with financial premiums: a good company car, a few salary increases over the years, retirement insurance, etc. In return, the employee has a hard time quitting. It is hard to go to the competition due to the knowledge they have built up at the company and the non-disclosure agreements that come with it.
Changing to another company is difficult. The employee loses many benefits and will need to reinvent himself. Starting all over at another company at the age of 50 is hard. You don’t care anymore about the new things. The moment you understand the new business process well enough, you can go on retirement.
If they get fired, they could be pretty well off because they get paid their bonuses (which is a lot of money in Belgium!). However, when changing to a new company, nobody will pay that person the wage he or she earned at the previous company. The employee will lose a lot of income and struggle to adapt to a new business and the younger generation. They are the old man in the building. Employers prefer younger employees as they are more adaptable to management's requests. Younger people don’t complain much and do not raise their voices as much as the older generation. The older employees aren’t afraid of discussions and set the tone.
The golden case employee is way too expensive for a new company, so they often work at a medium or big corporate company. They often like to complain about progressive ideas. At a certain age, the person is incredibly expensive for a company. Still, the company can not fire their employee because they would need to pay an incredible amount to get him/her fired (Belgian regulatory). The moment their employee reaches the legal age for retirement, they only have one choice: accept their retirement.
I do see a big change happening right now! When looking at companies today in Belgium, companies don't let it get to that point again. They made ‘the mistake’ in the past of giving all these people many salary increases without any underlying goals they need to achieve to reach that point. The Golden Cage employee is dying out. New people get benefits over time by commissions based on data points or sales, not a fixed income anymore. The golden cage will become a luxury position of the past.
You can still do something else or start your own business, but the fact that you’ve chosen or become a Golden Cage employee says a lot. You would probably have started a business or done many other ventures in your 40s. You're probably not the entrepreneurial type and like the comforts of your current life.
Some positions in this category are engineers, senior functions, and middle to higher-income jobs.
The 50+ poor man's worker. (worth Gold for employers)
The employee who worked his whole career—maybe at different places—but stayed below the lower or medium block in the triangle of the corporate ladder. I explain with a simple example.
Imagine you start as an order picker in a warehouse after a few other jobs, as an operator or supermarket cashier. The job becomes monotonous, so eventually, you end up doing a few ‘other’ jobs at the warehouse:
>> assembly laborer: cleaning, stocking warehouse shelves, and other warehouse maintenance tasks
>> loader/unloader
>> assembly clerk: keeping track of inventory, ...
>> package handler: packaging and labeling shipments, ...
>> an obligated course in the firm made you a forklift driver
>> packaging specialist
>> warehouse supervisor of the order picker team with number X (you still have nothing to say as the warehouse manager says everything. You need to make sure your team reaches the KPI’s. You have a lot of stress along with it)
Your boss eventually ‘promoted’ you from order picker to warehouse supervisor. Before you realize it all, you are 50. In the meantime, while you were busy working, half of your job has been automated by robotics. You were always confrontable, living from paycheck to paycheck, always complaining, living a life of quiet desperation. You lived the corporate trap life.
This type of employee lived to the needs of his employer. He made some promotions over time but still never reached a serious management function in the company. He has always been kept on a leash so the company could keep him as an employee. Some minor promotions in positions, wages, and functions made him eventually stay (along with fears of getting out of his comfort zone). The management would never give him a position as a warehouse manager. That position was given to other people.
Many working-class people never really get into the senior manager or president role. This is especially true in big corporations, marked by stagnated growth.
Positions that fall into this category are medium to lower-income jobs.
The manager roles (employees)
The highest senior management functions like CEOs, COOs, CTOs, and directors, ... in decent-sized companies have their category. These people are often in their 50s. They followed the career ladder (often with a master's & PhD degree). They are not entrepreneurs but must have some entrepreneurial skills to manage their function well. They are not the owners (maybe they gained some stock while working), so they can not sell the whole business and cash out to go on retirement. They can not sell the company. I, however, assume that if you are in such a position, you made quite some money and are well-positioned to retire.
The 50+ business owners
3 categories of businesses: freelancers, small to medium-sized craftsman companies & small, medium, or big companies
The freelancers
If you gained expertise in a specific field and are passionate about it, you may have become a freelancer. Many people in their 50s are freelancers. It is a position with freedom and responsibility. I think it is a good position as you are required to reinvent yourself constantly and keep up to date. You can do it in all fields. The challenge lies in building a good retirement fund because your retirement as a sole business owner is often less than an employee's. You can, however, earn a lot more as a sole business owner.
If your job doesn’t require too much physical work (IT, marketing, accounting, consulting, etc.), then you can work a bit longer. But don’t overwork, cause, you know, make some place for the younger generation and “a teacher in the classroom of 67” is not what we want either. Find purpose in giving guidance to younger people but from the sideline.
The small to medium-sized craftsman
The small craftsman
Imagine an independent electrician working his whole career on his own. He may have had some electricians as employees for a while, but after gaining quite a bit of experience, they have all started their own businesses as they earn more and want their freedom. You could sell your goodwill, but that is not that much as you don’t have many maintenance contracts. You install it once, and that’s it; you go to the next client. Your name is not worth that much to sell. You must build your pension fund over time, as your retirement from the government is not that wild. You are also a bit screwed as you can not cash out on the sale of a company.
The medium-sized craftsman company
If you are a medium-sized craftsman company, you can sell it. You have many vans and people driving for you. The thing is that you need a lot of money to survive if you want to live well until you are 100. You need at least a few million dollars for a carefree old age. A lot to worry about.
The medium and big company owners
Company owners who successfully establish a seven+ figure business (often your life work) have many options. Many factors are at play: is there outside interest in the company (other companies, private equity, funds, competition, etc.)? Do you have family members that want to come into the business? Are you the sole owner? etc. Some options:
Selling the company
Stay on the board, keep an advising board function, and pay yourself well
Step down as CEO and let other people do the work
...
Moral of the story
If you are fifty, you should have built a successful company that has provided enough income for your retirement or established a thriving freelance career in your expertise.
If you are a freelancer or small business owner, ensure you are not bound to one client but have a whole network of clients who can do the job until you retire. Build a retirement fund.
You can choose to become a Golden Cage employee. But make it a clear upfront choice. If you have the opportunity (your boss must give you the benefits & a contract that is not dependent on commissions), make sure you have a real passion for that job; otherwise, you are living a life of quiet desperation. It can be a simple, good life to be in a golden cage position if chosen so.