So what’s your retirement withdrawal strategy going to be?

[RetireJapan]

I’m maxim out my ideco (68000 per month) and Tnisa but I still think that’s not enough to achieve FIRE. So the rest has to be invested on a taxable account, where I will need to pay 20.315% taxes every time you withdraw the 4%. The interesting thing is that none of the FIRE books I read in Japanese about this topic mention about these taxes when doing the calculation….

Don't forget you are only paying tax on the *gain*. So it won't be quite as bad as an extra 1% on your SWR.

[jcarrera01]

I’m maxim out my ideco (68000 per month) and Tnisa but I still think that’s not enough to achieve FIRE. So the rest has to be invested on a taxable account, where I will need to pay 20.315% taxes every time you withdraw the 4%. The interesting thing is that none of the FIRE books I read in Japanese about this topic mention about these taxes when doing the calculation….

Don't forget you are only paying tax on the *gain*. So it won't be quite as bad as an extra 1% on your SWR.

An extra 1% on the SWR sounds like a lot in the long run. If you have 100m invested, and your SWR is 4% per year, meaning 4m a year, adding that extra 1% , is 1m you spend on capital gain taxes every year. When you compare that to other countries where there is a basic minimum amount of money you can cash out without paying capital gain, it's a LOT of money
Am I wrong or something I'm missing?

[RetireJapan]

Am I wrong or something I'm missing?

I don't think you are wrong, but it's not something that we have any control over (barring moving to a different country, and it's not a big enough deal for me to do that).

Being aware and incorporating it into planning is probably wise.

For us at least, some of our income will be from pensions, a lot will be from tsumitate NISA maturing (no tax to pay), some will be from iDeCo (largely tax-sheltered) so I'm not really seeing this as a big deal.

I guess if someone had a lot more in investments then the capital gains might be a larger proportion of their investment income, but then they'd have a lot more investment income too

[captainspoke]

IMO, tax sheltered options are reasonable/adequate enough for most people saving for retirement--enough to encourage people to establish a long term saving plan/habit throughout their working lives. I think the benefit is designed to be broadly available, so that most anyone can take advantage of it if they want. It was not designed to enable FIRE, and I would hope that it would never be changed to allow that. If you are saving and investing in excess of the limits, that's wonderful, and congratulations, but you are also then at a level where taxes on that are completely justified.

In the US, the IRA system has, again my opinion, been abused, with 1%-ers able to 'contribute' shares and investments that average people have no access to. I hope it never happens here.

https://www.propublica.org/article/the- ... gress-says

[JimNasium]

I was watching Rob Bergers recent video, and he linked to this site: https://ficalc.app/ It has a calculator with 13 different withdrawal strategies showing simulations of different retirement years, success and fail rates, etc. You can configure the numbers how you like too. I find it really useful.

[printingmoney]

Will pay off my mortgage aged 57 or 58 (43 now).

I pay Class 3 NI contributions every month. Should have 33 out of 35 years by the time I reach retirement, maybe even a full 35 years.
I of course pay into the Japanese pension. Should have 35 or so years in that by the time I retire.

I max out my tsumitate-NISA each month (100% eMaxis Slim All Country)
I pay 12,000 per month (maximum for me) into an iDeCo (100% eMaxis Slim All Country)
I pay 10,000 per month into my company's DB scheme (awful interest rate, but I am stuck in it now, so just suck it up. Basically J-govt. bonds)

I am single, and have no plans to get married or have kids.
I think the two pensions above should bring in about 180,000 ~ 200,000 yen per month?
I can easily live on that once the mortgage is paid off.

Between the ages of 57/58 to retirement age, I plan to invest the money I would have been paying into my mortgage (about 65,000 per month).

All in all, should have enough to be comfortable in retirement, though in no way rich.

Sorry for going Off topic and you can choose to not answer this. But just wondering why you chose to not marry or have kids. I’m in my 20’s and still thinking about these things so very sorry if this by any chance sounds rude. Its rare to see people who choose to live life not by society’s accepted norms so I thought it would be interesting to hear from you and if at any point(or even now) you had second thoughts on it.

[Roger Van Zant]

Will pay off my mortgage aged 57 or 58 (43 now).

I pay Class 3 NI contributions every month. Should have 33 out of 35 years by the time I reach retirement, maybe even a full 35 years.
I of course pay into the Japanese pension. Should have 35 or so years in that by the time I retire.

I max out my tsumitate-NISA each month (100% eMaxis Slim All Country)
I pay 12,000 per month (maximum for me) into an iDeCo (100% eMaxis Slim All Country)
I pay 10,000 per month into my company's DB scheme (awful interest rate, but I am stuck in it now, so just suck it up. Basically J-govt. bonds)

I am single, and have no plans to get married or have kids.
I think the two pensions above should bring in about 180,000 ~ 200,000 yen per month?
I can easily live on that once the mortgage is paid off.

Between the ages of 57/58 to retirement age, I plan to invest the money I would have been paying into my mortgage (about 65,000 per month).

All in all, should have enough to be comfortable in retirement, though in no way rich.

Sorry for going Off topic and you can choose to not answer this. But just wondering why you chose to not marry or have kids. I’m in my 20’s and still thinking about these things so very sorry if this by any chance sounds rude. Its rare to see people who choose to live life not by society’s accepted norms so I thought it would be interesting to hear from you and if at any point(or even now) you had second thoughts on it.

Not rude at all.
A number of factors:

1) 99% of the women around me are Japanese who do not understand English. I do not speak Japanese fluently, and never will. Building a long-term relationship can be hard enough when two fluent speakers get together, let alone when neither of them are fluent in the other's language. 99% of married friends here in Japan who separate/divorce do so ultimately because of a lack of communication and the corresponding lack of understanding about Japanese cultural norms. I do not want to go down this route. I have dated Japanese women before, even long term, but once the physical side of the relationship dwindles (inevitably), we had almost nothing in common to talk about, other than vapid celebrity crap or other such simple topics. Some people are happy only ever having superficial or purely functional "conversations" (What shall we have for dinner this evening?"), but I am not.

2) I earn enough to have a semi-comfortable life....for myself. I will never earn enough to be able to support a wife and kids. People will say, ah, but your wife could work! Sure, 150,000 yen per month for a full-time office job around here. And if working full-time, paying for a child minder would be necessary. 100,000 yen per month for a part-time job? Pfft, what's the point? Not being able to be a good provider for my wife/kids would cause me immense stress. I am not good with stress.

3) The older I get, the more I enjoy doing my own thing! Some of my friends here are so under the thumb, it is crazy. No, thanks!

4) I try some dating apps now and then, but EVERY SINGLE WOMAN there wants to get married and have kids. What's the point in leading them on? Nah. I'll pass.

To be honest, I don't think about it too much. Sometimes I think it would be nice to have a girlfriend, but mostly I am pretty content just doing my thing! I truly believe loneliness is a state of mind.

[printingmoney]

Will pay off my mortgage aged 57 or 58 (43 now).

I pay Class 3 NI contributions every month. Should have 33 out of 35 years by the time I reach retirement, maybe even a full 35 years.
I of course pay into the Japanese pension. Should have 35 or so years in that by the time I retire.

I max out my tsumitate-NISA each month (100% eMaxis Slim All Country)
I pay 12,000 per month (maximum for me) into an iDeCo (100% eMaxis Slim All Country)
I pay 10,000 per month into my company's DB scheme (awful interest rate, but I am stuck in it now, so just suck it up. Basically J-govt. bonds)

I am single, and have no plans to get married or have kids.
I think the two pensions above should bring in about 180,000 ~ 200,000 yen per month?
I can easily live on that once the mortgage is paid off.

Between the ages of 57/58 to retirement age, I plan to invest the money I would have been paying into my mortgage (about 65,000 per month).

All in all, should have enough to be comfortable in retirement, though in no way rich.

Sorry for going Off topic and you can choose to not answer this. But just wondering why you chose to not marry or have kids. I’m in my 20’s and still thinking about these things so very sorry if this by any chance sounds rude. Its rare to see people who choose to live life not by society’s accepted norms so I thought it would be interesting to hear from you and if at any point(or even now) you had second thoughts on it.

Not rude at all.
A number of factors:

1) 99% of the women around me are Japanese who do not understand English. I do not speak Japanese fluently, and never will. Building a long-term relationship can be hard enough when two fluent speakers get together, let alone when neither of them are fluent in the other's language. 99% of married friends here in Japan who separate/divorce do so ultimately because of a lack of communication and the corresponding lack of understanding about Japanese cultural norms. I do not want to go down this route. I have dated Japanese women before, even long term, but once the physical side of the relationship dwindles (inevitably), we had almost nothing in common to talk about, other than vapid celebrity crap or other such simple topics. Some people are happy only ever having superficial or purely functional "conversations" (What shall we have for dinner this evening?"), but I am not.

2) I earn enough to have a semi-comfortable life....for myself. I will never earn enough to be able to support a wife and kids. People will say, ah, but your wife could work! Sure, 150,000 yen per month for a full-time office job around here. And if working full-time, paying for a child minder would be necessary. 100,000 yen per month for a part-time job? Pfft, what's the point? Not being able to be a good provider for my wife/kids would cause me immense stress. I am not good with stress.

3) The older I get, the more I enjoy doing my own thing! Some of my friends here are so under the thumb, it is crazy. No, thanks!

4) I try some dating apps now and then, but EVERY SINGLE WOMAN there wants to get married and have kids. What's the point in leading them on? Nah. I'll pass.

To be honest, I don't think about it too much. Sometimes I think it would be nice to have a girlfriend, but mostly I am pretty content just doing my thing! I truly believe loneliness is a state of mind.

Thanks for the response! I definitely understand why you chose the path less traveled and happy to see it working for you. Language gap is a huge point and so is losing ones personal space. Well let’s see what option i end up choosing!

[TokyoBoglehead]

Sorry for going Off topic and you can choose to not answer this. But just wondering why you chose to not marry or have kids. I’m in my 20’s and still thinking about these things so very sorry if this by any chance sounds rude. Its rare to see people who choose to live life not by society’s accepted norms so I thought it would be interesting to hear from you and if at any point(or even now) you had second thoughts on it.

Not rude at all.
A number of factors:

1) 99% of the women around me are Japanese who do not understand English. I do not speak Japanese fluently, and never will. Building a long-term relationship can be hard enough when two fluent speakers get together, let alone when neither of them are fluent in the other's language. 99% of married friends here in Japan who separate/divorce do so ultimately because of a lack of communication and the corresponding lack of understanding about Japanese cultural norms. I do not want to go down this route. I have dated Japanese women before, even long term, but once the physical side of the relationship dwindles (inevitably), we had almost nothing in common to talk about, other than vapid celebrity crap or other such simple topics. Some people are happy only ever having superficial or purely functional "conversations" (What shall we have for dinner this evening?"), but I am not.

2) I earn enough to have a semi-comfortable life....for myself. I will never earn enough to be able to support a wife and kids. People will say, ah, but your wife could work! Sure, 150,000 yen per month for a full-time office job around here. And if working full-time, paying for a child minder would be necessary. 100,000 yen per month for a part-time job? Pfft, what's the point? Not being able to be a good provider for my wife/kids would cause me immense stress. I am not good with stress.

3) The older I get, the more I enjoy doing my own thing! Some of my friends here are so under the thumb, it is crazy. No, thanks!

4) I try some dating apps now and then, but EVERY SINGLE WOMAN there wants to get married and have kids. What's the point in leading them on? Nah. I'll pass.

To be honest, I don't think about it too much. Sometimes I think it would be nice to have a girlfriend, but mostly I am pretty content just doing my thing! I truly believe loneliness is a state of mind.

Thanks for the response! I definitely understand why you chose the path less traveled and happy to see it working for you. Language gap is a huge point and so is losing ones personal space. Well let’s see what option i end up choosing!

There are lots of intelligent and motivated people in Japan with great language skills. However they tend to have vibrant careers, and are quite busy.

If your circles don't overlap you'll never meet them. Conferences and symposiums for example are a fabulous place to meet intelligent and motivated people.

[Roger Van Zant]

“Intelligent and motivated”?!

At this point, and in the area I live in, I’ll settle for “ability to answer the question : ‘How are you?’”!