Could I afford to NOT retire in Japan?

[RetireJapan]

Mulling over a blog post at the moment, but recently I have been thinking about how reasonable the cost of living can be in Japan (at least for our situation here in Sendai, owning or mostly owning our home).

Right now I am pretty confident about our ability to retire here and live off pensions and investments.

Looking at prices in other countries (UK, US, Australia, etc.), mostly housing but also food, eating out, utilities, etc. I'm not sure we would be able to do so in another country.

Even Thailand has seen prices explode since I first went there in 1997.

What do you think? Are you confident of being able to move out of Japan and life the same kind of lifestyle?

[adamu]

Remember the exit tax will hit you for capital gains if you have more than 100M and try to flee

[Beaglehound]

It would be a struggle, largely because we built a house, which has no mortgage but limited resale value. Basically that decision committed us to retiring here, or at least basing ourselves here in retirement.

[RetireJapan]

Remember the exit tax will hit you for capital gains if you have more than 100M and try to flee

I was just thinking about that, but my wife and I are both under.

Also we'd have to sell anyway if we left Japan permanently, rendering the exit tax moot.

[captainspoke]

It would be a struggle, largely because we built a house, which has no mortgage but limited resale value. Basically that decision committed us to retiring here, or at least basing ourselves here in retirement.

And, in doing that, you'd avoid exit tax, the gamble of a full move, and so on.

Even people in the US will start spending winters in florida or arizona, then coming home for the rest of the year. And over time, those southern stays grow longer, and they may eventually move there. Maybe at first they'll go after xmas/new years, and some years later start leaving in november.

[Wales4rugbyWC23]

Correct me if I am wrong, but don't you have to continue paying health insurance and long term care insurance in Japan when you are retired? In the UK once you are over 65 you do not need to pay national insurance any longer. That could be quite significant difference in take home disposable pension income between the two countries.

In my honest opinion I think the Japanese system is the right system for financing public health services. The elderly do still use the the health system, if not even more than the younger population.

[RetireJapan]

Correct me if I am wrong, but don't you have to continue paying health insurance and long term care insurance in Japan when you are retired? In the UK once you are over 65 you do not need to pay national insurance any longer. That could be quite significant difference in take home disposable pension income between the two countries.

In my honest opinion I think the Japanese system is the right system for financing public health services. The elderly do still use the the health system, if not even more than the younger population.

You do, but I don't expect to be paying much health insurance/long term care insurance once I retire, because the bulk of our income will be from investments (either tax-exempt from NISA or paying capital gains only in a taxable account).

My impression of the current state of the NHS is that it is much easier and more pleasant to access medical services in Japan than in the UK right now

By far the biggest hurdle to move back to the UK would be housing though. We could possibly buy something, but it would require us to cash in a lot of our current savings/investments!

[Beaglehound]

It would be a struggle, largely because we built a house, which has no mortgage but limited resale value. Basically that decision committed us to retiring here, or at least basing ourselves here in retirement.

And, in doing that, you'd avoid exit tax, the gamble of a full move, and so on.

Even people in the US will start spending winters in florida or arizona, then coming home for the rest of the year. And over time, those southern stays grow longer, and they may eventually move there. Maybe at first they'll go after xmas/new years, and some years later start leaving in november.

Yeah, Thailand or Malaysia in Jan/Feb has its appeal. I know your winters are harsh but ours are harsher.

[mighty58]

Looking at prices in other countries (UK, US, Australia, etc.), mostly housing but also food, eating out, utilities, etc. I'm not sure we would be able to do so in another country.

Even Thailand has seen prices explode since I first went there in 1997.

Yep, I imagine you're a bit like myself, been here 20+ yrs, have experienced nothing but deflation, with personal income going up at the same time as careers develop. Going abroad and seeing the prices, and talking to peers, certainly highlights how relatively easy we've had it. The city I originally hail from has been one of the world's biggest booming real-estate markets over the last few decades, and the prices are eye-watering to say the least... the real estate alone would likely eat up too much of any retirement budget.

I would agree that Japan should rank fairly highly on most geographic arbitrage scales, but there are so many factors that people value (or don't value), and also so many places "outside of Japan" (literally, the world), that the question starts becoming difficult to address without more parameters to define the conversation though. But yes, agreed on Japan, and I'm surprised you don't see it mentioned much in those FIRE-community geographic arbitrage pieces.

[captainspoke]

... I'm surprised you don't see it mentioned much in those FIRE-community geographic arbitrage pieces.

Perhaps it's just a well-kept secret, but past news reports about super-expensive real estate (and some other things) have probably kept it off those lists of "where to retire abroad".

Another aspect is immigration requirements. There is no system comparable to some countries whereby you can plop some money in a local bank, or prove a certain level of income, and then get approved for long term stays. There may be other ways to squeeze in, but I think having a j-spouse is really the only realistic possibility. Rules on work, given a certain visa/status of residence, are probably another factor. And that leads to taxes and then healthcare.

Healthcare is great for established residents, but is less 'friendly' to those more transient. It's not as cheap if you opt for pay-as-you-go (like some retirement destinations), and it is based on income, so it 'favors' actual residents, and is based on tax returns/income, rather than a simpler signup or flat insurance fee.