What kind of salary can we expect when we are celebrating our fiftieth birthday? Will it be higher or lower than today? The international Paylab.com portal prepared a number of points related to the topic of ageing, and we think that people should view their careers and pay from a broader perspective.
1. Our career path changes with age along with the dynamic growth in our salaries
The fact that a person has been working for a long time is not automatically reflected in higher pay. According to data from the international Paylab.com portal, peak earning potential, or the age when people generally reach their highest incomes, is from 37 – 40. This age fluctuates among women and is influenced primarily by any career break associated with maternity. Another big influencers for women are the conditions the state creates to support their work in addition to family duties. Employees around forty generally achieve their highest incomes with respect to the current salary market. In reality, pay rises much more dynamically for younger employees. When we reach fifty, our pay in general increases at a slower pace than for people who are not yet forty. The Paylab portal prepared a simple chart showing how age with the highest earning potential varies across the countries in which Paylab operates a local salary portal.
Age is more than a question of vitality. People earn more in the middle of their productive years because they are carrying higher levels of debt and are more inclined to take a job with a more attractive (read: higher) salary. They are also more ambitious, frequently changing jobs, a fact which is reflected in a higher salary. It is possible that in the future, a millennial will earn more than they currently do when they celebrate their fiftieth birthday. But people 10 to 30 years younger will continue to see more dynamic pay growth. Employee priorities and expectations naturally change with age. People over the age of 50 generally prefer a more relaxed work tempo, they are more loyal to their employer and salary is a less important variable when they are choosing a job. Life experience offers us tales of many burned-out managers who have decided to take their careers in completely different directions. Read more in Paylab Newsroom how will benefits and workplace reflect ageing workers.
2. Long-term experience is not always a guarantee of higher income
The more experience one has in a given field is not always reflected in their payslip. According to data from the Paylab.com portal, there are specific sectors and jobs where experience and practice can be leveraged into a higher salary. Age and experience are reflected positively in the salaries of managers, lawyers, consultants, doctors, university-level educators and specialised technicians. However, in positions in administration, state government, manufacturing, support activities, trade, agriculture and manufacturing, an older, more experienced employee may have the same salary as their younger colleagues who are just joining the workforce. Young employees under the age of 45 dominate in some sectors. These are specialised positions in newly developing industries such as IT, digital marketing, telecommunications and online media.
3. Older women are at greater risk for poverty
Women have lower incomes in general compared to men, which automatically results in lower savings and lower pensions. Women generally work in industries with lower financial compensation compared to men and exhibit less aspiration to obtain top management positions. The length of any career break taken for maternity has a major impact on women’s incomes and the chances and conditions a woman experiences when returning from maternity leave. Women are much more at risk of poverty at retirement age. Paylab.com therefore advises women to be much more active in initiating negotiations over a pay raise. This is one of the ways of combating the “gender gap”. Paylab.com also advises that salary negotiations become a part of contingency plans designed to provide them with more finances when they are seniors.
4. Continuing education increases one’s chances for a good salary
Focus within career planning may shift to higher paying industries that use digital skills. People who actively improve and continue to learn IT and digital skills have a better chance at finding employment and better earnings. Employees now have many options for improving themselves in a range of areas thanks to the Internet. It is important to maintain and improve one’s knowledge of foreign languages, as they are often the key to opening the door to new job opportunities. We learn our entire lives and it’s never too late to start something new. Continuing education is the best capital for ensuring our income remains competitive.
5. Save at least 5 per cent of your current income
It may sound cliché, but it’s a great idea to regularly save and set aside money for a time when things are riskier and when our drive to work is lower seeing as we are already saving for a new car, vacation or a telephone. The best option is to find a financial product or a way to earn a return on a part of your income for the future. The ideal amount to save for a time when we are no longer at our physical peak is at least 5 per cent of your current income. Companies now offer their employees whole life insurance or contributions to the so-called 3rd retirement pillar (voluntary savings plans). Ample savings can even help you retire early.
6. A rainy day fund
Every responsible person should have a rainy day fund equal to at least three months of their current salary to cover an unexpected and short-term emergency in their life. These events include the death or serious illness of a loved one, or a long-term absence from work due to illness, an operation or injury. If you work in a risky profession and travel a lot, you should ask your employer if you are covered under insurance. Injuries and accidents may significantly your impact your job opportunities for the rest of your life. Many companies insure their employees on business trips abroad or contribute to their accident insurance coverage. If you have a family predisposition for a critical illness or disease, a good choice is to invest into prevention or a suitable insurance policy.
7. Do I want to be an employee my entire life?
Logically, setting aside your dreams and hobbies for retirement is not worth it because retirement age for many of us is so far away. Companies are now offering work-life balance benefits that offer a better way to balance family life with our careers through a kind of sustainability and balance intended to help people continue to work for as long as possible. Many people have even managed to transform their hobbies into a way to earn a living, successfully finding fulfilment from something they enjoy. It gives them the opportunity to get on their own two feet and not be an employee their entire lives. Maybe, over time, they get their own business off the ground and even move to the other side and become an employer. Read more in Paylab Newsroom how will benefits and workplace reflect ageing workers.