The Year of the Snake
Happy New Year! Welcome to the snakepit.
I’m in Cebu, The Philippines. We made it after our initial hiccup. Heading back to Japan on Sunday.
This is our annual planning post. Follow along and comment with your goals or plans below if you want to join in.
2024 was okay
Every year we start things off here on the blog with a look ahead, both for RetireJapan (now much more than just this website) and me personally. Here is last year’s post for comparison.
2024 was the year of reps. We ended up doing a bunch of stuff.
RetireJapan carried on. We did the things we did in 2023, somewhat consistently. It went well. But there was nothing new or transformational.
On a personal level the markets were kind and our net worth went up 20% despite us spending a lot more than usual. This will likely not continue, but I feel fairly mentally and financially prepared for that.
RetireJapan goals for 2025
This year I want to do everything I did last year, and more.
So keeping things going is a must. A Monday Read every week, and a blog post almost every week. At least a couple of YouTube videos every month, if not one a week. Courses, consultations, and coaching.
But I want to do more. Update our NISA and iDeCo guides for 2025. Write a new guide (or maybe two!). Come up with some new events.
I want to make more of a difference, which means reaching more people, which means trying new things.
Not all of these will work out, but we won’t know until we try them.
Personal goals for 2025
(touch wood) I think we are probably okay financially now. I don’t think we will need to worry about money in the future unless something big changes, and even then we should be okay.
So going forward is going to be a case of fine-tuning things, figuring out what kind of lifestyle we want, and adjusting as we go along.
I have done a lot of thinking about this stuff. I have a reasonable plan and a reasonable understanding of my investments and how I react to market movements.
In 2025 in terms of investing I will continue to:
- max out iDeCo (67,000 yen a month possibly going up to 74,000 yen a month soon)
- pay fuka nenkin (the reason iDeCo isn’t 68,000 yen a month)
- max out the tsumitate portion of new NISA with new money (100,000 yen a month)
- sell 2.4m yen’s worth of mutual funds from my taxable account each year and rebuy in the growth portion of new NISA
- continue paying into the UK state pension on a voluntary basis (I have 21/35 years for a full pension)
My wife will:
- max out iDeCo (also 67,000 or 74,000 yen a month) and pay fuka nenkin
- max out the medium-small business savings plan
- max out the new NISA with a combination of new money and selling taxable to rebuy in NISA
- invest in dividend paying Japanese stocks in the growth portion of new NISA
However, my wife is ill and will likely not be able to work again. We’re exploring options to reduce the amount of work her school entails and make sure that she doesn’t need to spend much time there. Once we do that we will likely reduce her iDeCo contribution to the minimum and cash out her medium-small business savings.
Her existing iDeCo holdings plus a maxed out NISA should be plenty to supplement her pension in retirement.
So 2025 is going to be about calibrating our lifestyle a bit. I also have some personal things to work on, especially health and relationships.
How about you? Any changes of direction in store? What are you planning to do?
Happy New Year! Thank you for all you are doing for the expat community in Japan. I was very sorry to hear that your wife is facing some health challenges and hope she gets better or finds ways to accommodate her new health status. We suddenly lost my brother-in-law last year to an undiagnosed cancer and are trying to do a better job at enjoying life now rather than saving enjoyment for later. If I could put one thing on your to-do list for 2025 it would be to have a RetireJapan meet-up in Tokyo; I think many of us would enjoy meeting in person.
Thank you! We’re also going to try to fit decades of fun into the next couple of years. An interesting challenge.
Meetup in Tokyo is a great idea. I will add it to the list.
Always enjoy your articles, updates and positive vibes. Keep up the great work!
I pray your wife can beat her illness. Happy New Year and all the best in 2025.
Thank you! You too!
Sorry to hear about your wife. Take care of yourselves.
Thank you!
Best wishes to you and your wife and other loved ones this year. Thanks always for your positive output into the world.
Thank you. You too! Hopefully we can finally meet this year…
Hi Ben. I’m sorry to hear about your wife. I hope she’s not in pain. Both of you, take care of your health.
Thank you! Hoping for a good 2025
Hi Ben,
Thanks for this (and all you do to support the ex-pat community). Just a question about your decision to do fuka nenkin. Could you please explain why you think this is worthwhile over the gains on the extra 1,000 yen/month in iDeCo? As someone self-employed, my contribution limit is 68,000 for iDeCo, too. Is it worth switching them over? I read the guest post about the 52,000/year and while I’m slightly older (42 vs 38) the maths would likely not be too different, which is a great deal, but presumably 1,000 vs 400 compounded would surely work out better wouldn’t it? I guess it depends how long you live to get the extra pension dosh. Any further insight would be appreciated (sorry if I’ve missed a post where you’ve explained this already)
That is a great question! I haven’t run the numbers, to be honest (that might make for an interesting blog post).
My main reason for doing fuka nenkin is diversification. I have plenty of stock market investments (iDeCo, NISA, taxable). Adding an extra 1,000 yen a month to the pot is not going to make much difference, but increasing my guaranteed government pension would give me a different revenue stream.
There is not much in it though, either approach is likely to be fine.
Looks like the iDeCo contribution allowance is going to be going up to 75,000 yen a month soon too.
Yes, that makes sense. I’m tempted to do it if/when the allowance goes up, but would love to see a post running the numbers on it. Just a cursory look and the 1,000 x 23 years (for me from now to 65) @8% would be ￥763,000 or 30,520 / year based on the 4% rule. Of course, that could be increased further by delaying withdrawal or by increasing the withdrawal rate, but even with that in mind, it appears that the fuka nenkin is at least comparable, and more than likely slightly better. In fact, as I’ve looked at my approximate pension statement, because I have already paid in for 8 years and have 18 left of kokumin nenkin contributions, I assume my fuka nenkin addition calculation would be this 26 years x 12 = 312 months, 312 x 200 (return for fuka nenkin payment) = ￥62,400, so it would potentially be roughly double in my case (assuming I haven’t misunderstood something). Not bad for a minor adjustment.
Correction, I think it would be ￥43,200. Presumably the 200 would only count towards contributions including the fuka nenkin (23 years x 12 months = 216 x 200 = ￥43,200.
I wrote a post comparing fuka nenkin vs maxing out iDeCo. Quite eye opening! Will publish on Wednesday.