What changes after quitting work for good at 53?

[Misha]

I have PR and have been working at a company in Japan for 30 years. I’m thinking of quitting since I’m ok financially and have lost the motivation to work at a job I don’t love. I will be living in Japan for the rest of my life.

I have shakkai hoken at the moment and have been paying into the pension fund for over 10 years, so I assume I’ll get a little money when I reach retirement age, but frankly I don’t need to worry about the amount.

I also believe I will have to switch my healthcare to Kokumin Kensho Hoken, paying premiums based on the previous year’s income/total assets, and thirdly I’ll have to start filing my taxes myself instead of my company doing it for me.

Besides the personal “what will I do the rest of my life”, I’m just wondering if I forgot to consider any important changes that will happen in my life.

I just want to make sure I keep my healthcare insurance for the rest of my life, even if I don’t have a job.

Thank you for any comments regarding what I need to think about and may have forgotten before I make this big decision.

[captainspoke]

I switched to kokumin hoken two years after retirement (my previous coverage was extendable for that long).

It was easy, no problems/glitches/issues/hiccoughs. Nothing but a simple signup. I was even hospitalized at the time, and the transition was smooth. IMO, this will be one of the easiest aspects of the transition.

[Beaglehound]

There will be no problem regarding health insurance, there is no easy way to actually ‘lose’ coverage, the government is keen for everyone to be signed up. You are also expected to keep contributing to pension until you are 60. Low income might get you a full/partial exemption on this should you want one. Otherwise, it will cost around 16.5k a month.

[Misha]

Thanks for replies. I think I have my bases covered. Just want to make sure I’m not forgetting a big issue before I do it.

[concerned]

Well done, I can definitely understand your position as am in very similar situation
Have you being paying into IDECO? If so believe this will change

[Tkydon]

After you quit;
Health Insurance - max 48,000
As stated above, you will probably be able to keep your current Health Insurance for 2 years before switching to Kokumin Hoken.
The absolute max payment for either existing or Kokumin Hoken (depending on your previous income level) will be around 48,000 per month.

Resident's Tax -
Your Resident's Tax is payable at 10% on 2020 Income from July 2021 to June 2022, on 2021 Income from July 2022 to June 2023, and so on.
If you are employed it will simply be deducted from Payroll, but after you quit you will be responsible for paying it. If you quit work in say Dec 2021, you would still be liable for the 6 months of unpaid tax from 2020, and then for the entire year's tax for 2021, for which they will send you single payment or quarterly payment slips (End June, August, October and January).

Kokumin Nenkin - 16,610
As stated above, you will still be expected to pay contributions until you reach your 60th Birthday, @ 16,610 per month.
It would be advisable to continue paying the contributions past 60, until 65 to increase the total number of your pension contributions and payment receivable.
The information is on the Pension Website
https://www.nenkin.go.jp/international/ ... nsion.html
If you have coverage period less than full 40 years, the monthly amount in 2021 is;
Per Year ￥780,900 x Number of contribution-paid months / 480 months

Other Taxes -
If you own your home, Fixed Asset Tax.

and then you other living expenses...

[Gulliver]

Kokumin Nenkin - 16,610
If you have coverage period less than full 40 years, the monthly amount in 2021 is;
Per Year ￥780,900 x Number of contribution-paid months / 480 months

So if you contribute ¥16,610 per month for 10 years you only get ¥16,268 Per month back? What a rip!

[RetireJapan]

Kokumin Nenkin - 16,610
If you have coverage period less than full 40 years, the monthly amount in 2021 is;
Per Year ￥780,900 x Number of contribution-paid months / 480 months

So if you contribute ¥16,610 per month for 10 years you only get ¥16,268 Per month back? What a rip!

From age 65.

So by the age of 75 you get your money back. By 85 you double your money. If you live longer than that they keep paying you.

You wouldn't anywhere near that kind of return from the private sector. The problem is that the contributions are so small, and many people don't get around to saving/investing to supplement it.

[Gulliver]

So by the age of 75 you get your money back.

Great points! But, I guess it comes down to the person’s circumstance. For example, I am already all set retirement-income-wise so I do not need the extra ¥16,000 after 65. Also, I will be very surprised if I actually make it to 75 (considering the life expectancy of my demographic). If I had the choice, I think the money would be much better spent on a monthly Yakiniku/nihonshu dinner while I’m still able to chew .

To your other point, I am fairly certain, barring a prolonged recession, that if I was able to add the money to my existing investments, I could get a much greater return over 10-20 years.

Taking these perspectives into consideration, it sure would be nice if the contribution was optional for unemployed people.

[RetireJapan]

Taking these perspectives into consideration, it sure would be nice if the contribution was optional for unemployed people.

It is. If you have low income/financial difficulties, you can apply for 3/4 payments, 1/2 payments, 1/4 payments, or 0 payments. If you qualify you continue accruing pension credits at a lower rate (but pay nothing, get pension credits sounds good to me).