When will you begin drawing your Japan state pension?

[TBS]

From April 2022 the age range from which you can begin taking the Japan state pension (Kokumin Nenkin, Kousei Nenkin, Fuka Nenkin, Kokumin Nenkin Kikin etc.) will widen to 60 to 75.

Electing to start drawing after 65 will see the pension annuity increase by 8.4% for every year. Going the other way, starting every year before 65 causes the pension annuity to decrease by 4.8% per year (this is an improvement on the current rule which is 6.0%).

This recent thread discussed the topic and got me wondering what people's plans are.

Pros of deferring the start date include:
- The pension is larger, and you will receive more overall if you live into late 80s and beyond.
- Higher annuities are an insurance against your other investments & income sources failing, or you losing your cognitive ability to manage them.
- Most foreigners in Japan will not have 40 years of contributions to receive the full state pension. Deferring beyond 60 means you can voluntarily pay Kokumin Nenkin longer (up to 65) to get more contribution years, or to pay Kousei Nenkin up to 70 (if you continue working!)
- Women have longer life expectancies and stand to benefit most from the higher deferred annuities.
Cons are:
- You may die before you start drawing and receive nothing.
- If you die earlier than the expected pay off date, you lose out compared to if you'd begun drawing earlier.
- Unless managed via a decent strategy, your income in later years will be higher, potentially meaning more has to be paid in income and residence taxes.

Pros of starting to draw the pension early are:
- With average male life expectancies, the total pension money you receive is expected to be higher.
- You can live on the money earlier, meaning you don't have to draw down your other investments from as early, meaning more profits from those as they are invested longer. This pushes the expected pay back ages even further into the future.
Cons:
- The annuity amount is smaller. It may not provide you with enough baseline income to guarantee a quality of life if other things turn bad.

Everyone's circumstances are individual so there is no universal right answer to which age is best. Note however this is not a annuity versus investment binary argument about which is best. Everyone receives an annuity here (presuming you live long enough), so it is more a question of how large an annuity do you need to remain comfortable.

[Beaglehound]

Despite being of relatively advanced years (51), I find it impossible to say at the moment. Will depend on my financial position and the current rules when I reach 60/65. The idea of deferring and using it as part of an income floor is attractive, but I am wary of disadvantageous changes coming in the meantime, before I start drawing.

[RetireJapan]

Assuming no unpleasant surprises, I am planning to take nenkin as late as possible. Before that hopefully I will be 'working' (making money from hobby-like activities)/living off investments. I'll do the same with the UK state pension.

Once I start drawing nenkin I will accelerate giving money to family/charity.

[Moneymatters]

CORRECTION BELOW:
I didn't vote as my response would be "at least 65" I plan to retire early but contribute voluntarily until 65.

Then I'll review both my financial and actual health situation each year to make a decision.

I think there are sound arguments to defer but I'll also be looking at other sources of information.
https://www.ons.gov.uk/peoplepopulation ... 2019-06-07
Life expectancy for a bitish male at 70 is just one year longer than at 65. However, given that at 65 average life expectancy is 85 that to me presents an argument to defer if you can afford to/it doesn't create an income tax headache.

One more reason to defer my Jpn pension in my situation is to help my wife upon my deminse. Increasing my Japan pension will increase the amount of regular income she'll see when I'm gone. It will still likely be below tax thresholds.

• Wife is Japanese and only expects around 1mil Jpn pension.

• She won't benefit from any of UK survivors Pension as not eligible.

• Whilst we are the same age, even in a multiverse of infinite possibilities there isn't one she doesn't outlive me by decades. I could look up to her and smile knowing that we beat the system.

Of course, she might be planning to leap upon my funeral pyre. But based on what she called me last week for forgetting to put the non-burnables out that's doubtful at best.

CORRECTION:
Whilst 3/4th of the kousei nenkin element of the pension can be left to a surviving spouse any increase as a result of deferal will NOT be part of the calculation. See here:-
https://news.yahoo.co.jp/articles/4db72 ... 7a6acd2c87

遺族年金は年金の繰り下げによる恩恵も受けることができない
先に説明したとおり、遺族基礎年金と遺族厚生年金のいずれも繰り上げによる減額の影響を受けません。

同様の理由から、亡くなった方が行っていた年金の繰り下げによる増額分も遺族年金には影響を与えません。夫が繰り下げ受給により増額された金額を受け取っていても、遺族年金は増額されず、元の金額を基準に計算された金額で受け取ることになるのです。

[RetireJapan]

One more reason to defer my Jpn pension in my situation is to help my wife upon my deminse. Increasing my Japan pension will increase the amount of regular income she'll see when I'm gone. It will still likely be below tax thresholds.

I didn't think spouses inherited nenkin. Is there a way for them to do that?

[Moneymatters]

One more reason to defer my Jpn pension in my situation is to help my wife upon my deminse. Increasing my Japan pension will increase the amount of regular income she'll see when I'm gone. It will still likely be below tax thresholds.

I didn't think spouses inherited nenkin. Is there a way for them to do that?

https://www.moneypost.jp/609791

She can't get 3/4ths of my kousei nenkin?

[beanhead]

One more reason to defer my Jpn pension in my situation is to help my wife upon my deminse. Increasing my Japan pension will increase the amount of regular income she'll see when I'm gone. It will still likely be below tax thresholds.

I didn't think spouses inherited nenkin. Is there a way for them to do that?

Only in some specific instances, it seems.
https://www.nenkin.go.jp/international/ ... nsion.html

[RetireJapan]

This seems like a good source. I will check it out properly tomorrow: https://www.nenkin.go.jp/service/pamphl ... LK03-3.pdf

[beanhead]

https://www.moneypost.jp/609791

She can't get 3/4ths of my kousei nenkin?

Only from age 60 to 64?

Widow's Pension
If your husband dies after contributing for at least 10 years* as the Category Ⅰ insured person and if he has received neither Old-age Basic Pension nor Disability Basic Pension as of the previous day of his death, you can receive the Widow’s Pension while you are aged 60 to 64. To qualify, you need to have been married to him for at least 10 years and have been financially supported by him at the time of his death.
* Contribution-exempted periods are propotionally calculated: we count 1/4 of his coverage periods (months) exempt from 3/4 contribution payment, half of his coverage periods (months) exempt from half contribution payment , and 3/4 of his coverage periods (months) exempt from 1/4 contribution payment.

Benefit Amount
Equivalent to your late husband's unpaid Old-age Basic Pension (based only on the Category Ⅰ insured periods as of the previous day of his death) x 3/4

[Moneymatters]

One more reason to defer my Jpn pension in my situation is to help my wife upon my deminse. Increasing my Japan pension will increase the amount of regular income she'll see when I'm gone. It will still likely be below tax thresholds.

I didn't think spouses inherited nenkin. Is there a way for them to do that?

Only in some specific instances, it seems.
https://www.nenkin.go.jp/international/ ... nsion.html

I don't think it's quite captured in that link.
I'm talking about the 遺族厚生年金 it seems really rather normal.

The official Japanese links give me a nose bleed. Here's a nice article about two 90 year olds.
https://kurassist.jp/nenkin-kouhou/vol6 ... re-01.html
The little diagram half way down illustrates it nicely. You can see 3/4th of the kousei nenkin element is the part to transfer.
In case the widowed party has their own kousei nenkin then they have the option to take the larger of:
(a) 3/4th of yours. or (b) half your's and keep half their own.


Sadly, once again my plans have been scuppered! It appears if you defer taking your pension the increased amount will NOT be part of the 遺族厚生年金calculation.
https://news.yahoo.co.jp/articles/4db72 ... 7a6acd2c87


遺族年金は年金の繰り下げによる恩恵も受けることができない
先に説明したとおり、遺族基礎年金と遺族厚生年金のいずれも繰り上げによる減額の影響を受けません。

同様の理由から、亡くなった方が行っていた年金の繰り下げによる増額分も遺族年金には影響を与えません。夫が繰り下げ受給により増額された金額を受け取っていても、遺族年金は増額されず、元の金額を基準に計算された金額で受け取ることになるのです。

Off to edit my inaccurate post.