New iDeCo law from May 2022 and question

[Roger Van Zant]

I was just reading this wiki about the iDeCo:

https://retirewiki.jp/wiki/IDeCo

I saw this sentence:

iDeCo accounts can be maintained tax free until 70 years old (75 from May 2022), but no new contributions can be added after you turn 60 (65 from May 2022).

I started my iDeCo in 2020.
Does this mean I can only pay in unti I am 60? Or, will the new law after May 2022 "grandfather in" even accounts like mine, which were started before May 2022?

Thanks.

[Bushiman]

I was just reading this wiki about the iDeCo:

https://retirewiki.jp/wiki/IDeCo

I saw this sentence:

iDeCo accounts can be maintained tax free until 70 years old (75 from May 2022), but no new contributions can be added after you turn 60 (65 from May 2022).

I started my iDeCo in 2020.
Does this mean I can only pay in unti I am 60? Or, will the new law after May 2022 "grandfather in" even accounts like mine, which were started before May 2022?

Thanks.

I take it to mean the date at which you turn 60, not when your account was created i.e. turn 60 this year and before May next year, you're bang out of luck and can't make any more contributions... Turn 60 after May next year, you're good to continue paying into the system till you're 65.

[Roger Van Zant]

Oh, I see.
Thanks for clearing that up.
Good to know I can pay in until 65 if I so choose!

[Zoomtokyo]

Not sure about that. I turned 60 earlier this year, after which my IDECO contributions stopped. I plan to inquire if I can continue from May, when the new age 65 rule comes into effect.

I was able to do something similar with Nenkin: I "voluntarily joined" (任意加入) the system a couple of months after my 60th birthday - when my contributions ceased - and the procedure was quite simple.

[banders]

I believe for those of us paying kokumin nenkin we can only pay iDeCo to 65 if we're paying voluntary nenkin contributions past 59. Is it worth it? Well, as I see it, since the current annual contribution of ¥198,480 increases the pension by ¥781,700/40 = ¥19,542 per year, the extra 5 years of contributions of about ¥1m would return about ¥100k per year until death. So live beyond 75 and we're quids in on the pension front. On top of that, the extra 5 years of iDeCo payments (¥4m) make this seem quite a big deal. Or am I reading things wrong?

[EmaxisSlim Cultist]

I believe for those of us paying kokumin nenkin we can only pay iDeCo to 65 if we're paying voluntary nenkin contributions past 59. Is it worth it? Well, as I see it, since the current annual contribution of ¥198,480 increases the pension by ¥781,700/40 = ¥19,542 per year, the extra 5 years of contributions of about ¥1m would return about ¥100k per year until death. So live beyond 75 and we're quids in on the pension front. On top of that, the extra 5 years of iDeCo payments (¥4m) make this seem quite a big deal. Or am I reading things wrong?

At 70, you must cash out. Either as pension or lumpsum. But an extra allowance is a huge plus.

Those short on cash funds at retirement might consider selling their taxable investments to fund the iDeco.


Edit answer-> 70 NOW, 75 in April of 2022.

https://www.ideco-koushiki.jp/special/column/09.html

[RetireJapan]

At 70, you must cash out. Either as pension or lumpsum. But an extra allowance is a huge plus.

I was under the impression that they were planning to extend iDeCo compulsory cash out to 75.

Am I imagining things again?

[EmaxisSlim Cultist]

At 70, you must cash out. Either as pension or lumpsum. But an extra allowance is a huge plus.

I was under the impression that they were planning to extend iDeCo compulsory cash out to 75.

Am I imagining things again?

Edit answer-> 70 NOW, 75 in April of 2022.

https://www.ideco-koushiki.jp/special/column/09.html

[banders]

We've established changes are: can pay until 64 and cash out to 75. Has anyone else paying kokumin nenkin done the math addressed in my post above re paying voluntary nenkin necessary to extend iDeCo contributions?

[EmaxisSlim Cultist]

We've established changes are: can pay until 64 and cash out to 75. Has anyone else paying kokumin nenkin done the math addressed in my post above re paying voluntary nenkin necessary to extend iDeCo contributions?

This is how I read it.

Type 2 people -> Ideco automatically extended to 65
Type 1/3 people-> iDeco only extended to 65 IF you are not up to 40 years of nenkin, and continue paying voluntary nenkin.

So, yes it is probably worth it to pay 16,800 yen/month if you have a shortfall and you get the bonus of continued iDeco payments.

If I was short on cash, I would consider selling taxable investments to make up the contribution ammount.

国民年金の任意加入被保険者とは、60歳までに老齢基礎年金の受給資格を満たしていない場合や、40年の納付済期間がないため老齢基礎年金を満額受給できない場合などで年金額の増額を希望するときに、60歳以降も国民年金に加入している方です。
詳しくは、日本年金機構のホームページをご覧ください。

Voluntarily enrolled insured persons of the National Pension Plan are those who continue to participate in the National Pension Plan after the age of 60 when they wish to receive an increase in their pension amount in case they do not meet the qualifications to receive the Basic Old-Age Pension by the age of 60 or cannot receive the full amount of the Basic Old-Age Pension due to a lack of 40 years of payment.

https://www.resonabank.co.jp/nenkin/ide ... dment.html