High Salary And No Job Safety, How Should Your Financial Plan Look Like

By Bhuvanaa Shreeram

Arjun is 51. He is a vice president (VP) at a large financial services firm in Mumbai. He earns Rs 85 lakh a year, including salary, bonus, and employee stock ownership plan (ESOP) combined. He has a good home, a good life, and by most measures, an excellent career. He was also called into his manager's office three months ago and told, with 90 days' notice and a standard severance package, that his role was being 'eliminated as part of a global restructuring.'

Arjun was not underperforming. He was not being managed out. He was simply, in the clinical language of corporate restructuring, a line item that was no longer fitting into the new org chart. And in the three months since, he realised something that his well-paying job had kept hidden: he had no plan for this moment. He was stomped.

Arjun's situation is not unusual rather it is becoming increasingly normal.

Risk That Senior Professionals Carry

There is a particular financial vulnerability that is exclusively true for senior corporate professionals. It is usually never discussed because discussing it feels like inviting the undesirable event.

The higher you climb in a corporate structure, the more financially dependent you become on a single income source. There isn’t much time to focus on anything but the job in hand and the income helps fund the lifestyle and hence it gets comfortable. At precisely that moment, that income source becomes less secure. Senior roles are disproportionately targeted in restructurings. They are expensive and visible. And in an era of artificial intelligence (AI) - driven efficiency mandates, cost rationalisation, and flatter organisational structures, the VP and above cohort is facing a level of job insecurity that did not exist a decade ago.

The numbers are stark. A 2023 survey by staffing firm TeamLease found that senior professionals above the age of 45 take an average of 6 to 12 months or more to find a comparable role after a layoff - nearly three times longer than mid-level professionals. And 'comparable' is the key word in that sentence. Many never fully replace their previous compensation. Many find themselves in roles with lower titles, lower pay, and lower trajectory than where they were.

I have sat with more clients in this situation than I care to count - accomplished, intelligent people who built genuinely impressive careers, and who arrive at our office after a job loss with the same shell-shocked expression. The income was always there, but a plan for if the income stops abruptly ahead of time wasn’t ever there. While the financial gap is serious enough, the psychological one is more devastating. They had completely outsourced their financial security to their employer, without ever realising it.

The Runway Question And Why Most People Can't Answer It

The first question I ask any senior professional who has just a job loss or who is anxious about the possibility is this: how long can you sustain your current lifestyle without your salary?

Most people cannot answer it. They may have thought about it, but never actually calculated it. There is a difference between vaguely knowing you have 'some savings' and knowing, precisely, that you have 14 months of runway at your current burn rate before you need to make some big structural changes.

That number – your personal financial runway – is the single most important number a senior professional should know.

Calculate Your Runway Right Now

Step 1: Add up all liquid assets – savings accounts, liquid mutual funds, FDs maturing within 1 year. Exclude provident fund (locked), real estate (illiquid), and ESOPs (uncertain). 

Step 2: Calculate your true monthly burn – equated monthly instalments (EMIs), bills, school fees, dining, travel, insurance premiums, household staff – all averaged monthly. Be honest. 

Step 3: Divide Step 1 by Step 2.  The result is your runway in months. If it's under 12, you have work to do irrespective of how secure your job feels today.

When I walk clients through this calculation for the first time, the results are almost always sobering. A family earning Rs 80 lakh a year, with a lifestyle costing Rs 3.5 lakh a month, and liquid assets of Rs 28 lakh has exactly eight months of runway. Eight months to find a comparable role, negotiate a package, and get back to income. In today's senior hiring market, that is not a comfortable buffer.

Why A High Salary Creates A False Sense Of Security

There is a specific financial trap that high earners fall into that lower earners are largely protected from. Because the salary is high and cash flows are usually not stressed, the financial plan waits. It doesn’t feel critical or urgent. There is always next year's bonus to top up savings, always a next quarter to review the portfolio. There is always time. But there isn't any.

The cruel mathematics of a high-salary lifestyle is this: the more you earn, the more you spend, and the more you spend, the more income you need to sustain the life you have built. A sudden income disruption at Rs 85 lakh per year is not the same disruption as one at Rs 25 lakh per year. The absolute gap is larger. The lifestyle cost floor is higher. The psychological adjustment is steeper. And the financial markets don’t wait for you to figure it out.

The table above illustrates something counterintuitive: in terms of financial runway, a senior professional earning three times as much as a mid-level peer is often no better protected – actually is a bit worse off. The salary never translated into proportional financial resilience, because it was consumed by a proportionally higher lifestyle.

The Financial Plan That Answers This Fear

The good news is that this is an entirely solvable problem but solved better if addressed before the disruption, not after. A dedicated income disruption reserve separate from everything else would be great. And that will need time to build. If starting early – along with saving and investing for a house and children and retirement – this fund can keep receiving some allocation.

But if you are already there – then here is a framework we use with our clients.

1. If The Disruption Has Already Arrived, Your Liquidity Has To Come From Somewhere

Let's be completely honest. If Arjun earns Rs 85 lakh a year, roughly Rs 7 lakh a month post-tax and spends Rs 3.5 lakh a month, his monthly surplus is Rs 3.5 lakh. Building Rs 84 lakh in liquid reserves from monthly savings alone would take two full years of zero lifestyle spending and zero other investing. That is not realistic. For most senior professionals facing a sudden income disruption, the liquidity they need does not exist as cash. It exists as assets and those assets need to be unlocked.

Here is where the money actually comes from, in order of practical accessibility:

Where The Liquidity Actually Comes From

A negotiated severance package.

Employee Provident Fund (EPF): Partial withdrawal is permitted after one month of unemployment. Full withdrawal after two months. For someone with 25 years of contributions, this is often the single largest accessible pool and it is almost always overlooked in a crisis because people treat it as untouchable. 

ESOPs: If vested, these can be exercised and liquidated. An unexpected exit often accelerates vesting conversations with employers. This is negotiable as part of a severance discussion and should be on the table. 

Annuity / Unit Linked Insurance Plans (ULIPs) / LIC Endowment Plans: These are deeply suboptimal long-term instruments for most people, but in a liquidity crisis, surrender value is real money. Calculate what you would receive on surrender and factor it into your runway. 

Property: Not a first resort as a sale takes months and a distressed sale destroys value. But a loan against property (LAP) can be arranged relatively quickly, at reasonable rates, and provides a significant liquidity bridge without forcing a sale at the wrong time. 

Mutual Fund Portfolio: Redeem debt funds first. Preserve equity as long as possible. Selling equity during a market downturn to fund living expenses is the most expensive thing you can do. 

The hard truth is that most senior professionals facing a job loss will need to draw on assets they planned to hold long-term. That is ok. It is what those assets were built for. The question is which assets to unlock and in which order. The sequencing when decided in advance, before the crisis, makes the difference between a controlled drawdown and a panic liquidation.

And the deeper lesson, the one that applies to everyone reading this who has not yet faced this situation, is that the time to create liquidity is before you need it. This is done best by ensuring that your asset mix includes instruments that can be unlocked quickly and without catastrophic loss when the moment arrives.

2. Decouple Your Retirement Plan From Your Employment Status

Most senior professionals have the bulk of their long-term savings tied to employment-linked instruments, such as EPF, gratuity, ESOPs with vesting schedules. These are valuable, but they are contingent on continued employment. A sudden exit can disrupt vesting, trigger lock-in complications, and leave a gap between what was expected and what is actually received.

A robust retirement plan for a senior professional needs a significant portion in instruments that are entirely independent of employer status, like personal mutual fund portfolios, National Pension System (NPS) Tier 1 contributions, and direct equity holdings that belong to you unconditionally, regardless of what your employer decides.

3. Build At Least One Income Stream That Doesn't Require A Job Title

This is the longer-term plan and the one most senior professionals resist because it requires confronting the idea that their salary may not always be there. But it is also the most powerful financial back up available to someone at this stage of their career.

An income stream that doesn't require a job title could be dividend income from a mature equity portfolio. It could be rental income from a well-chosen property. It could be consulting income from the domain expertise built over 25 years. It doesn't need to replace the salary, not yet. It needs to exist, to grow, and to be there as a meaningful contribution when the salary isn't.

The clients who navigate a senior-level job loss with the least damage are almost always the ones who, at some point in the previous five years, built something outside their salary. Not necessarily large, sometimes it's Rs 40,000 a month in dividend income, or a two-day-a-week consulting arrangement, a passive investment in a local business, or the likes. It is proof of concept. And psychologically it provides a great cushion. They are not wholly dependent on a single employer's goodwill. That independence, even partial, is worth more than any severance package.

4. Run A Job-Loss Stress Test On Your Financial Plan - Annually

Once a year, ask your financial plan one question: what happens if my income stops tomorrow? Run through the numbers. How long does the reserve last? Which expenses can be reduced, and by how much? What is the realistic timeline to income resumption? What assets could be liquidated in sequence, and in what order, to extend the runway?

This is not a doomsday prediction exercise. It is the same stress-testing that any well-run business applies to its financial projections. You are, in effect, the business. And the business deserves a contingency plan. 

Back To Arjun

Three months after his role was eliminated, Arjun is still looking. He has had several conversations, a few promising leads, and one offer that was significantly below his previous compensation, which he turned down. He can afford to turn it down, just about, because his severance has bought him some time.

But he is burning through it faster than he expected. The lifestyle hasn't adjusted, school fees don't pause, the EMI on the second car doesn't pause, the dining and the holidays don't pause. Not yet. Because no one in the family has quite accepted that this is serious.

What Arjun needed was a financial plan that had already priced in the possibility of this moment, a reserve large enough to make him selective rather than desperate, an income stream that didn't depend on his job title, and a retirement portfolio that was his, unconditionally, regardless of what any employer decided.

He is building that plan now. It would have been far easier and far less expensive to have built it three years ago.

Know a senior professional who has never asked what happens if the salary stops? Send them this.

The author is a certified financial planner and co-founder and head of financial planning, House of Alpha Investment Advisors Private Limited

(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)