Expat Pension adviser for Australians?

[AustinJapan]

Been here since mid '96. 55 yrs old.

Need adviser to answer this question. If I need a pension to live, which is the better route? Leave Jpn ASAP and add the last twelve years (I would be eligible at 67) accumulating of my working contributions to Australia, or stay here and work through to 65 plus add on some part-time work after that?

I just started to worry reading the FAQ for would-be-pensioners when I read that they will calculate the Aussie bit of the pension based only on the Aussie work experience. I had assumed there might be a threshold and I would figure out what that might be and then make sure I worked enough years in Australia even if I decided to live in Japan after retiring.

Japanese pension looks to be tiny. Cost of living in Japan much better than Australia however which mitigates it a bit. Aussie pension is at least double but not available until 67 and cost of living higher.

wow, it is certainly a minefield.

Does anyone know of a professional service out there. 1.3% of the Aussie population are residing OS now and although not much it is growing. There has to be someone who knows their stuff.

[AustinJapan]

OK..fair enough.

then to add my two cents of useful info.

If you are an Aussie do not think that the Japanese-Australian Pension Agreement means you can work all your life in Japan, go back to Australia and collect an Australian pension!

Who could be that dumb? = Me!

[thurston1]

Hi all,

I am also looking for an Aussie pension advisor. My main question is regarding lump sum Superannuation payouts. Are they taxed in Japan? Tax is withheld in Australia already. It is very confusing. I am trying to work out if or not voluntary payments are a good option or not.

All the best!

[AustinJapan]

Hey Thurston,
Do you pay into a self-funded Super fund?
I've been thinking about that. Anyway, there are a few companies that specialize in helping Aussie expats, but they seem to be useless about the Japan side of things. What are we to do? It is so maddening, I have contemplated quitting here because I cannot figure out - nobody seems to know - how to mesh the systems. I hope we can find someone, somewhere who has a clue.

[thurston1]

It has been really difficult for me too to find this information. I do not invest in Superannuation at the moment (mainly because I do not know what is going to happen to it on the Japanese end.) I am not living in Japan at the moment but plan to be in the not too distant future. (I really can't make any sense of the tax treaty.)

I am also in the same boat with shares. In the case of shares though at least I know I can sell them when need be.

[AustinJapan]

SMATS Singapore (seem decent)
EXFIN?
ATLAS... OK
Examples of FAdvisors for Aussie expats.
If you search Australian expat finances on iOS, there are a bunch there.

I think I’ll go for this Shane MacFarlane as he at least lists his name on the site. Unlike some services which are effectively a net to trawl and assign chumps like us to Independent Financial Advisors for a commission. (Not that you do not learn stuff from these types too)

But watch out, I spoke to a young ambitious Aussie guy in Singapore once, (a financial advice service; read boiler room) who was ready to introduce me to their exclusive real estate buying service in Australia to help me get set up..

When I ask about the pension he said, ‘Oh mate...don’t worry about that, I wouldn’t be worried about that mate, who knows, Oit is getting worse and worse’ which is typical snow they will blow at you. The Australian pension makes a lot of sense if you are in my financial position and can live in Asia happily, BUT...this piece of work was ready to sell me a house (and pay him and his mates $6000 up front (who knows what else they cream down the line) for the privilege. In one swoop I would have disqualified myself for an Australian pension in the process because the qualification for the pension doesn’t allow more than one property.

A) these financial advisors are after high rollers and people like me a just pest control road kill..the only thing we can do is band together and so we can levearage our group power etc.,
B) the kids working down at the local Centrelink Office do not know their stuff. I’ve been down there and the guy at the desk said, in an urgent voice, no, no, you have to come back when you are 65 sir” just no idea at all.
C) my brother-in-law, rest his soul, used to work there and was a generous, diligent, conscientious soul and even he didn’t have a way to plow through the rules and tell me the golden question....which is...”at what age should I come home”

I was under the misunderstanding that I could work in Japan and go home at 67, and provided I could prove my Australian residency at the time (i.e. be in Aussie 183 days a year) apply and get - provided my means test passed - a full-pension, or even a partial pension, in Aussie dollars at the Aussie rate and that my work experience in Japan would count year for year in the Australian scheme.

Not so, I know -or think I know- now, at fifty- @#@¥& - five, no less, I am learning. From what I can gather, if you work 30 years in Japan and 15 years in Australia you get 15/45 of the Australian pension if Australian resident at application, and 30/45 of the Japanese pension. AND EVEN THIS MAYBE WiSHFUL. The Japanese side may just say, Sayonara when I leave and give me Zero!

My current hypothesis is something like this. Do not trust me, as I am no expert, I swear if Shiva came down and donated the stars, nobody would know any better the way I am seeing it...

If the Japanese pension for me was $994AUD (78,000 yen), I would get $665AUD (52,000 yen) a month!
The Aussie pension is now $1,664AUD a month with an energy discount (130,070 yen) of which I would get, in this scenario,about a third, so in total I would collect $1220.00 a month, which is a pittance, but absolutely beytter than nothing. That is extremely helpful to a person wth limited means provided he can live in Asia on a shoestring. (In Melbourne you could barely rent a room for that let alone pay bills. ) and this is what I thought I could get.

The Japanese pension, even if I made it for the maximum allowable benefit, (a mate just retired and he gets about 80,000 yen) at less than $1000 a month, despite the reasonable health and transport benefits here in Japan, is clearly not enough to live.

My original plan was buy apartments in Australia and rent them out until I found out about 1) non-residents tax rate (pay 33 cents to Canberra for every rent dollar received before you pay other costs) and 2) immediately disqualify from pension, pension goes to ZERO if own more than one property. Of course, no body tells you, including financial advisors I spoke to.

I am trying to get back on track again after an interim plan I started in 2016, which was to buy Vanguard Saison Shares-Bonds, but it was just an interim plan as I still had (and HAVE) no idea how to proceed!

Wanna know what expats in Japan do?

Everything and nothing.
Don’t expect to find out much on a forum! Ask their sister who owns their house back in Ireland, their mother who has their insurance in the UK, the dude in Tokyo who sells them Cayman Islands schemes, the real-estate agent in Pattaya who flogs condos, a banker in The Seychelles etc., it’s all a haze..

I am extremely grateful to be working and healthy, and it is hard not to come off sounding like a little spoilt sook when asking about advice. However, I think we are caught in a tricky spot. The generation before us ran entirely separate finances in their respective home and adopted countries. The next generation will plan and set it up right from the start. We are sort of in the middle and as these compliance laws and tax-sharing agreements start to squeeze, it is anyone’s guess.

Sorry for rant Thurstun, here’s to learning and doing the most we can, and staying cool...

[thurston1]

Thanks for the reply!

I am not looking for financial advice as I have a system that works for me. I am more just looking for advice on tax as this could effect the system I have created when I eventually settle back into life in Japan. I have contacted SMATs and Shane McFarlane. Both of them could offer me advice on the Australian front, however both could not give me any information about Japanese tax for an Aussie expat (who could potentially be retiring in Japan.)

[AustinJapan]

Try this: https://www.kaori-fuchi.com/en/

..and let me know!

If you owned a folio of fully-franked Australian shares, I would like to guess that having pre-paid the Aussie tax on dividends you would not have to pay that again here, but if those shares appreciate you still have to pay capital gains tax here (20%) ..no?

I know a) you would be a Japanese resident for tax purposes and b) you are supposed to declare global income, assets, inheritances etc., if they are over certain thresholds.

Totally over my head I am afraid. We need a tax lawyer and that is why I came here too.

[thurston1]

Thanks for that reply Aust!

My thinking is the same as yours. However, until I get the info confirmed I will keep investigating. Thanks for the link. I haven't tried that one, but will.

I am also worried that unless someone specializes in Aussie tax (and basically knows the ins and outs of the tax treaty and the unique tax situation fully franked credits present ) they too may give me the wrong information.

[StockBeard]

If you are an Aussie do not think that the Japanese-Australian Pension Agreement means you can work all your life in Japan, go back to Australia and collect an Australian pension!

This sounds like the France/Japan agreement. A lot of French expats here think they can work 40 years in Japan then collect a French pension afterwards, which is absolutely not what the agreement states (and would be too good to be true, given how much better the French pension is compared to the JP one).

The agreement simply ensures that you only need to work a total of 40+ (42?) years in the two countries (e.g. 10 years in France and 30 years in Japan) to then collect a"full pension"(per opposition to having to work 40 years in each country to meet the "full pension" requirements). However, the shares of that "full" pension will be proportional to the amount of time you worked in each country. e.g. 25% * full French pension + 75% * full Japanese pension for someone who worked 10 years in France and 30 years in Japan.

My personal take, and I believe, the attitude of a lot of people on this site, is to assume you're going to get very little in terms of old age safety net, and build your own retirement fund through savings. Easier said than done, of course, especially if you realize this in your fifties

Good luck.