Paying half Hoken or full Hoken

[Oliver]

Hello
I am in a special position. I am being pardoned for my Hoken because I qualify for the Hoken payment exemption.
I know that you get what you pay for, but in my case I am getting what I am not paying for. In this case the Japanese government is paying 50% of my retirement for me and my wife.
Is this wise?
Am I being penny wise and pound foolish?

[Tkydon]

If you are not paying full contributions, you cannot take advantage of additional tax exemption for iDECO.

You can still take advantage of NISA or Tsumitate-NISA, as you pay in Post-Tax money, but then the capital gain is tax free.

[beanhead]

Have a look at nenkin.go.jp and do a simulation of what your pension will be.
That will help you with the answer.
As discussed elsewhere, kokumin nenkin is paltry, so it may be useful to consider what sources of income you will have after retirement.

[Haystack]

Hello
Is this wise?
Am I being penny wise and pound foolish?

This really depends. You won't be able to access iDeco.

You're about to start a T-Nisa. Would you still have funds left over to invest after this?.

If the answer is Yes, the paying full nenkin and getting access to iDeco is worth it.

If the answer is No, then you're on the right course.

[zeroshiki]

Pension is low enough as it is (might even get lower!) so if you have the means you should pay it. An exemption just means they won't force you to pay but it also means you don't get to enjoy full pension when you're eligible. Depends on the person but pension is one of the cheapest retirement vehicles out there so I'd definitely go for it if I had the means and the opportunity.

[Gareth]

Do you have Permanent Residency? If you are planning to apply, that could affect your application. While it doesn’t specifically seem to say you need to pay full contributions, a key criteria is being able to support yourself financially so it would undoubtedly be a red flag…

[TBS]

Has anyone actually run the sums on this? I.e. in the OPs situation is it better to pay half-pension and invest in tNISA? Or better to pay full pension and invest first (if any left over) in iDECO?

I think a calc like this is necessary here to properly inform a decision..

[RetireJapan]

Pension is low enough as it is (might even get lower!) so if you have the means you should pay it. An exemption just means they won't force you to pay but it also means you don't get to enjoy full pension when you're eligible. Depends on the person but pension is one of the cheapest retirement vehicles out there so I'd definitely go for it if I had the means and the opportunity.

I agree. Having a guaranteed income until death is extremely valuable, and the higher it is, the better.

[beanhead]

Has anyone actually run the sums on this? I.e. in the OPs situation is it better to pay half-pension and invest in tNISA? Or better to pay full pension and invest first (if any left over) in iDECO?

I think a calc like this is necessary here to properly inform a decision..

Agreed. But each person's situation will be different. That is why I hinted that the OP should start with the nenkin simulation.
Then he or she could start attempting to answer your (very pertinent) questions.

[Oliver]

Thank you again for your many replies. I am probably worse condition retirement wise than most. But, since this forums hasn’t shame me yet,(many thanks) I feel comfortable to continue my retirement health check even though I expect bad news.
The calculation will be vey simple I believe, even though I don’t know how to do it. A year ago I started to give my retirement some thought……I applied for Nenkin and was told that I could be exempt for paying it. My wife and I did just that, and consider ourselves lucky.
But, are we really?