Pensions Mercer Report

Not looking great


Desmond P. sent me a link to this report last year and to my great shame I am only now getting round to writing about it.

It makes for interesting reading, and gives us some data to back up our gut feelings on state pensions.

​The report looks at pension systems worldwide, and based on a number of factors ranks them and gives them a grade. Japan is in 26th (out of 27) place, with a score of D.

Some of the things that stood out to me: low scores on 1) amount of household savings and 2) participation in private pension schemes. Basically, people in Japan tend not to save and invest for the future.

Then we have the longevity and demographic factors: people are living longer, and there are fewer young people to pay into the scheme (and a lot of them don’t have decent jobs, so they can’t pay into the scheme). So I think expecting the national pension scheme here to take care of you in old age is somewhat risky.

We’re here to provide some alternatives. If you don’t have a clear investment plan that you are actively pursuing, start one today. Ask a question in the forum, get in touch, and take action.

Also, if you find RetireJapan useful, please tell a friend about it. We’ve been getting lots of feedback from people who have opened accounts, changed their spending, and put their life on a different track. I’d like to see that happen for as many people as possible.

4 Responses

  1. To be fair, according to Mercer there are no adequate national pension schemes which sufficiently cover the costs of retirement.
    Does not change the fact that in general people ought to be encouraged to take personal responsibility and invest a comfortable retirement nest egg though!

    1. Hi Alan
      There are no alternatives to the state pension in Japan (which is compulsory for all residents, even though it isn’t currently enforced).
      What people should be doing is supplementing it by investing for the future: in iDeCo (the Japanese version of the US 401k), in NISA (tax-free investing account), and in normal investment accounts.
      I recommend investing because it’s a good way to keep the value of your savings and grow them over time.
      Lots more information on the RetireJapan site.