Japanese pension after paying in for 40 years

[Roger Van Zant]

Damn, 170,000 yen per month combined with the UK pension (probably around 120,000 yen per month) is not bad at all. That's pretty much what I live on now after paying the mortgage and taxes each month. I'm single with no kids though, so easier for me.

I don’t want to burst your bubble but Kosei nenkin payments have been steadily declining for many years. People who retired 5 years ago get slightly less than those who retired 10 years back. With the decrease in Japanese nenkin and the likely increase in the UK pension through regular cost of living adjustments, they are likely to end up much closer to each other.

Honestly, I'd be happy with 100,000 yen per month from the Japanese pension and the same from the UK pension. I can live on that alone.

[mighty58]

It's not a lot of money though, is it? Especially considering that's for 40 years' of payments.

I imagine greater visibility on these sorts of numbers for the general public would go a long way towards meeting Kishida's goal of increasing investments. I suppose they did try to gently nudge people a couple years ago, when they told everyone you needed 2,000man+... that certainly didn't go down too well

[Haystack]

It's not a lot of money though, is it? Especially considering that's for 40 years' of payments.

I imagine greater visibility on these sorts of numbers for the general public would go a long way towards meeting Kishida's goal of increasing investments. I suppose they did try to gently nudge people a couple years ago, when they told everyone you needed 2,000man+... that certainly didn't go down too well

I am not a pension alarmist, but I do think it's a good idea to plan for retirement with the assumption that pension payments will be substantially lower.

If I am wrong, that just means we'll be a bit less conservative spending when we retire.

I wonder about lean FIRE folks that factor in pension payments...

[RetireJapan]

It's not a lot of money though, is it? Especially considering that's for 40 years' of payments.

I imagine greater visibility on these sorts of numbers for the general public would go a long way towards meeting Kishida's goal of increasing investments. I suppose they did try to gently nudge people a couple years ago, when they told everyone you needed 2,000man+... that certainly didn't go down too well

I am not a pension alarmist, but I do think it's a good idea to plan for retirement with the assumption that pension payments will be substantially lower.

If I am wrong, that just means we'll be a bit less conservative spending when we retire.

I wonder about lean FIRE folks that factor in pension payments...

My pension projection is about 60% of the official numbers. Hoping to be pleasantly surprised, but it if all goes to plan it won't affect us either way.

[ClearAsMud]

Mercer (an asset-management firm) publishes an annual "CFA Institute Global Pension Index" comparing a total of 43 pension systems around the world against more than 50 indicators. For 2021, Japan ranks no. 36 on the list, with an overall score of 49.8 against an average of 61.0. This puts Japan just below Indonesia and just above Mexico (Japan falls below the average in all three scored categories of adequacy, sustainability, and integrity).

Asian countries generally fare poorly in the rankings, the top country being Singapore with an overall score of 70.7, only good enough for a B- grade. Hong Kong gets a C+; Indonesia, Malaysia, and Taiwan are at C; Japan, Korea, Philippines, Thailand, and India bring up the rear with a grade of D.

If you're willing to give up your personal details, you can download the complete report or a set of report highlights from the following page:
https://www.mercer.com/our-thinking/glo ... -2021.html

The Japanese page has a strings-free table summarizing the results:
https://www.mercer.co.jp/newsroom/2021- ... index.html

FYI:
The overall score for the US is 61.4.
The overall score for the UK is 71.6.
The overall score for Australia is 75.0.

Iceland has the highest overall score, at 84.2

[ClearAsMud]

...the equivalent of the basic pension, easy to calculate, premiums continue in principle until you reach 60)

I should clarify this a bit because it may give the impression that an employee's pension premiums may change after the age of 60.

Kosei nenkin premiums are always calculated as a single payment based on income, with the premium shared by both employer and employee. While the Kosei nenkin premium includes the amount necessary to fund the Rorei kiso nenkin (Basic Pension) benefit, reaching the age at which one is no longer required to contribute to the Basic Pension does not reduce one's Kosei nenkin premium, even though no concomitant Rorei kiso nenkin benefit accrues. Instead, the premium only counts toward increasing the employee's Rorei kosei nenkin benefit. A feature rather than a bug, I suppose, but the point is that for company employees, benefits and contributions have to be considered separately.

[Roger Van Zant]

It's not a lot of money though, is it? Especially considering that's for 40 years' of payments.

I imagine greater visibility on these sorts of numbers for the general public would go a long way towards meeting Kishida's goal of increasing investments. I suppose they did try to gently nudge people a couple years ago, when they told everyone you needed 2,000man+... that certainly didn't go down too well

You're right. One reason I am trying my best to max out my tsumitate-NISA each month for the next twenty years!
Things will be easier once the mortgage is paid off.