Start in your 50s…
The fourth and final part of our new series here at RetireJapan. Over four weeks we’ve looked at personal finance for people in their twenties, their thirties, their forties, and their fifties.
Actually, Ben Carson over at A Wealth of Common Sense wrote a fantastic post on this topic last week. Go and read it now 🙂
If you are in your 50s and have made no provisions for retirement, it really is crunch time.
The first thing is to figure out where you are. What pensions or other income can you expect? What is the absolute minimum you could live on? How long can you remain in your current job?
In an ideal world, your pension or investments would provide you with the income you need for a comfortable and pleasant retirement.
Most people probably aren’t in an ideal situation though. After doing some calculations, you may find that you have to continue working, or need to find another job after ‘retiring’ from your current one.
You may also need to reduce your spending and lifestyle.
Right now you probably need to ramp up your saving to a level beyond what you thought possible. Read the previous post to get started, but triple the urgency.
Every yen saved now could make a huge difference in the near future. Ask questions in the Forum or get in touch via the Contact form if you need help figuring out what to do.
Hi again Ben
Do you have anymore info about the practicalities of signing up for the to be reduced to 10 year pension contribution scheme – which I think starts in October this year. I’m 54 now, so if I am going to sign up for it, it needs to be right away. But –
1. how much would one need to pay in per month?
2. how much would 10 years of contributions get you as a pension when eligible? i.e. would it be worth it?
No news at school (YIS) as they move slowly. Do you have the official skinny on it Ben? I’m sure plenty of gaijin sama in Japan would like to know.
Cheers and Happy New Year
Hi Julian
Happy New Year to you too! A few thoughts about pensions for someone in your situation:
1. the changes to the pension scheme are linked to the increase in the sales tax to 10% and have already been postponed twice: I’m expecting them to be postponed again this time too…
2. how much you pay depends on whether you are in kosei nenkin (you pay half, employer pays half) or kokumin nenkin (you pay all). Both are based on your income. The minimum for kokumin nenkin is 15,000 a month or so.
3. Right now kokumin nenkin pays 60,000 yen a month or so. This is based on paying in for 40 years, so if you only pay ten years you’d be looking at about 15,000 yen a month.
4. pension payout are likely to fall in the future
All of which make paying into the pension scheme seem like a bad option for you if you have never paid in until now. You may be better off investing as much as you can privately.
I would run the numbers for yourself and see what your options are.
Good luck!