Leaving Japan - but hoping to return for retirement

[vapid]

This is not something I have seen mentioned before, so I wanted to start a discussion.

Has anyone ever left Japan and then returned later to retire?

Perhaps you had worked in Japan 8 years, then got a great offer back in the EU.

What would someone need to consider about taking that chance?
1) What happens to your PR status if you have it?
2) What about any pension payments you have made into the Japanese systems?
3) What happens to your NISA or iDeCo investment and savings?

Other items to think about or that you know resets the clock on.

[Tkydon]

If you have PR, make sure you get a Re-Entry Permit from the Immigration
(Some people didn't and got caught by Covid Travel Restrictions)
Re-Entry Permit will mean you will need to come back to Japan every 5 years or so to renew Re-Entry Permit and Zairyu Card
So long as you do that you can keep your PR forever.
You will have to consider tax implications, as you will have a liability to Japan taxes.

If you surrender your Zairyu Card, you would have to consider the Exit Tax.
If you have more than Y100M in assets, then you would have to mark to market and pay Capital Gains Tax on the paper gain...
But not if you keep your PR.

You will have to nominate a Tax Representative, and you will still be liable for Resident's Taxes for about 18 months after you leave.
They will send your Proxy payment slips to pay either in one shot, or quarterly.
i.e. you are currently paying Resident's Taxes on 2020 income, payable from July 2021 to June 2022.
If you are resident in a Ku-Shi-Cho-Son on Jan 1 2022, then you will be liable for Resident's Taxes on 2021 Income, payable from July 2022 to June 2023... If not, you won't...

Pension Payments you made into the Japanese Pension System; If you paid for just a few years, you could claim a refund when you left Japan, but you have paid more than you would get in refund, max 5 years, so not recommended.

https://www.nenkin.go.jp/international/ ... yment.html
https://www.nenkin.go.jp/international/ ... iles/A.pdf

You need to pay a minimum of 10 years (120 Months) contributions to qualify to get any Japanese Pension (120/480 x Japanese Pension Amount at Retirement age 67), so you probably want to get your contributions up to the minimum 120 months before age 60... The more the better. You can take the Pension anywhere in the world. You just have to process the application in Japan.

https://www.nenkin.go.jp/international/ ... nsion.html

You should Pay UK NI Cat 3 contributions for your time in Japan, and then continue to fund the UK Pension to retirement.

Alteratively, there is a Pension Agreement between Japan and UK, and you would have to work out how to get credit for Japan contributions... I don't recommend this... Get Both Pensions...

Others would have to comment on iDECO and NISA.
I don't think you will be able to contribute whilst not in Japan.

[RetireJapan]

Re-Entry Permit will mean you will need to come back to Japan every 5 years or so to renew Re-Entry Permit and Zairyu Card
So long as you do that you can keep your PR forever.

In practice this might work, but in the letter of the law is that you need a reason to leave Japan temporarily on a re-entry permit. Basically leaving Japan and coming back every five years to renew is not the intended use of the permit.

For now it might be okay, but immigration could choose to change enforecement at any time at which point you could lose PR and be denied re-entry.

Just something to keep in mind before making firm plans.

[Moneymatters]

...

You should Pay UK NI Cat 3 contributions for your time in Japan, and then continue to fund the UK Pension to retirement.

Alteratively, there is a Pension Agreement between Japan and UK, and you would have to work out how to get credit for Japan contributions... I don't recommend this... Get Both Pensions...

I don't think you can get credits in the UK for pension payments made in Japan.

The agreement with the UK is limited to the "elimination of dual coverage". Which basically means you can't be forced to contribute to both systems at the same time. If you were seconded to the other country for example.

https://www.nenkin.go.jp/international/ ... tatus.html

[Beaglehound]

...

You should Pay UK NI Cat 3 contributions for your time in Japan, and then continue to fund the UK Pension to retirement.

Alteratively, there is a Pension Agreement between Japan and UK, and you would have to work out how to get credit for Japan contributions... I don't recommend this... Get Both Pensions...

I don't think you can get credits in the UK for pension payments made in Japan.

The agreement with the UK is limited to the "elimination of dual coverage". Which basically means you can't be forced to contribute to both systems at the same time. If you were seconded to the other country for example.

https://www.nenkin.go.jp/international/ ... tatus.html

This is my understanding too. Not even sure if OP is British/entitled to pay into U.K. pension but I may be missing something.

[Tkydon]

Yeah, I misread EU for UK...

So, my point was leave Japanese Pension in place and get contributions up to minimum 240 months to qualify for minimum Japanese Pension (120/480 or 1/4 x Monthly Pension Amount at entitlement age)

Also participate in the other country's pension plan...

Thanks for the correction.

If you decide to cash out, you will only receive a refund of maximum of 5 years of contributions, but the other contributions will be completely cancelled, so you would have no pension entitlement in the future. This is stated in the links I attached.


Any other comments on the iDECO, NISA and Savings?

[Tony]

In practice this might work, but in the letter of the law is that you need a reason to leave Japan temporarily on a re-entry permit. Basically leaving Japan and coming back every five years to renew is not the intended use of the permit.

For now it might be okay, but immigration could choose to change enforecement at any time at which point you could lose PR and be denied re-entry.

Just something to keep in mind before making firm plans.

I'm not sure if they could deny entry, but they could definitely deny granting a new re-entry permit, which means you would then either have to stay in Japan, or loose your PR if you leave for more than a year.

[LarryCole]

This caught my eye so I'll add my situation because it may give a slightly different viewpoint:

Went to Japan in 1995 and left in late 1998, due to work. During that time I had married my Japanese wife.

Now I am 60 yrs old and selling up in the UK to move back to Tokyo by the end of the year since my wife is homesick and "Happy wife, happy life" is so true.

I have my old UK Company defined benefits scheme pension and am maxed out in the UK state pension so won't be destitute when I get too old to do whatever day job I acquire next year, if any.

Since all my investments are currently in UK Sipps and Isas I face an interesting time getting to grips with gradually moving the investments to NISAs and in the meantime understanding the taxation of the capital growth/dividends in Japan. I may find myself going to Ben for advice.

Something for me to bear in mind too is that the UK pension will be frozen at whatever level it is when I finally receive it at 67. That's OK in a low inflation environment but I can't predict the future.

When I left Japan in 1998 I handed in my Alien Registration Card and made a clean break, not knowing if or when I would return to live there. I am looking forward to getting back there, buying a property and exploring more of the country now that I have the time.

[Moneymatters]

..
Now I am 60 yrs old and selling up in the UK to move back to Tokyo by the end of the year since my wife is homesick and "Happy wife, happy life" is so true.
I have my old UK Company defined benefits scheme pension and am maxed out in the UK state pension so won't be destitute when I get too old to do whatever day job I acquire next year, if any.
...
When I left Japan in 1998 I handed in my Alien Registration Card and made a clean break, not knowing if or when I would return to live there. I am looking forward to getting back there, buying a property and exploring more of the country now that I have the time.

Firstly. Congrats! Exciting times you! I don't much care for the name, but "British Expats in Japan" is a friendly group on Facebook and starting to organise some social events.

BTW, I sense the Original Poster isn't married to a Japanese person so would have a challenge obtaining a visa for retirement if they have a break in residency status. There are many people approaching retirement that would love to make Japan their retirement location but Japan doesn't have an easy route beyond employment or marriage to a local.

In other news. We don't call it an "Alien Registration Card" anymore! Times have moved on.
Now we just call it a "Resident Card" and everything is just fine! *

(* You still need to carry it at all times and be ready to present it to any PC doing a bad Peter Lorre impression. "Paper's please".)

[RetireJapan]

I have my old UK Company defined benefits scheme pension and am maxed out in the UK state pension so won't be destitute when I get too old to do whatever day job I acquire next year, if any.

Since all my investments are currently in UK Sipps and Isas I face an interesting time getting to grips with gradually moving the investments to NISAs and in the meantime understanding the taxation of the capital growth/dividends in Japan. I may find myself going to Ben for advice.

One thing to keep in mind is going to be the tax treatment of your investments once you move to Japan. If you sold them before you became resident here, you would not be liable to Japanese taxes and could just transfer the money and open investment accounts in Japan once you arrived.

If you wait until you move here and become tax resident you may find yourself on the hook for capital gains taxes etc.