Pension/IDeCo conundrum

[Bubblegun]

1. RetireJapan exists to help people learn about their options and to encourage them to take action.

I'm actually glad i found this because I have been doing stuff back home with UK pensions,UK ISAs, and property but it is much much harder in japan to make informed choices.So its good to meet people who have similar goals.
Most people i know don't like to talk about this stuff.So i'm glad to meet like minded people.

2. A state pension is a valuable asset because it is guaranteed by a government and will arrive every (couple of) month(s) until you die.

I couldn't agree more.Even though it is a legal pyramid scheme.

3. 生活保護 is a system of last resort and is pretty punitive (people receiving it are not allowed to do certain things and are faced with scrutiny by government workers). I certainly wouldn't want to rely on it, let alone plan on it being an integral part of my post-work life!

Totally agree.

Kokumin nenkin is 16,000 yen a month. After paying it most people should also be trying to max out iDeCo and invest extra on the side. This should take priority over things like having a car, eating out, or holidays.

When you think about it is a great deal. But if I may, we do need to have some quality of life.
Hopefully we can have both, some fun while we work and have a family and when we retire.

Jcc
Starting early and using a long term investment plan can help, and perhaps if you want to convince someone of this, the best way to do it is to run the numbers for them. If you can get 4% post-inflation returns on average, there's a LOT of savings to be made even if you can only save 10% of your salary for 40 years

Absolutely!
This is why I am thinking of starting my kids off now.So they will have a huge pot when they hit say 50+
At the moment we put the kodomo teatei away every month, and my parter says it is for the kids college.( if they choose to go) but personally I don't want them to touch it.
Due to the fact it will be spent in one go, and taking 18 years to build up that fund, will only put them back to square one.
I'd rather they took out a super cheap government loan, and pay a percentage back from their pay,( if they reach that threshold) or go home where Uni is free.If that's what they choose to do.If they don't wish to go to uni, then they will have that huge build up, so they won't have to pay in 20%+ of their income into a pension pot.

This is something I would really like to get some financial advice for.

[Sybil]

You don't get squat from the nenkin if you didn't pay into it, so you probably don't need to worry about the dodgers getting money for nothing.

This is a good thing about Japan - the people who contribute get something back. And certainly, the Japanese government wouldn't bail out foreigners trying to milk the system. If any foriegners don't have enough money to live when they reach retirement age - they have two choices; become homeless or go back to their own countries.

Sadly by contrast, the UK throws money at; scroungers, bogus asylum seekers and economic refugees. The billions of tax payers pounds wasted on the scroungers would be better spent on care-homes for the elderly or cancer treatments. But the 'liberal' agenda in the UK merits that the scroungers are a more worthwhile cause than helping the elderly have a dignified life.

[RetireJapan]

When you think about it is a great deal. But if I may, we do need to have some quality of life.
Hopefully we can have both, some fun while we work and have a family and when we retire.

Absolutely. But a lot of people don't see saving/investing for retirement as a need on par with rent/transport/food, and it is.

This is why I am thinking of starting my kids off now.So they will have a huge pot when they hit say 50+
At the moment we put the kodomo teatei away every month, and my parter says it is for the kids college.( if they choose to go) but personally I don't want them to touch it.
Due to the fact it will be spent in one go, and taking 18 years to build up that fund, will only put them back to square one.
I'd rather they took out a super cheap government loan, and pay a percentage back from their pay,( if they reach that threshold) or go home where Uni is free.If that's what they choose to do.If they don't wish to go to uni, then they will have that huge build up, so they won't have to pay in 20%+ of their income into a pension pot.

Have you seen the Junior NISA accounts? They might be useful for this, and there is a chance children will be able to roll the contents over into a normal NISA when they reach the age of 20.

[Bubblegun]

[/list]

This is a good thing about Japan - the people who contribute get something back. And certainly, the Japanese government wouldn't bail out foreigners trying to milk the system. If any foriegners don't have enough money to live when they reach retirement age - they have two choices; become homeless or go back to their own countries.

I do hope so.I don't mind if someone was ill or disabled and for what ever could not contribute to the japanese system, but for those that could pay and didn't then the should get nothing from the system.

Sadly by contrast, the UK throws money at; scroungers, bogus asylum seekers and economic refugees. The billions of tax payers pounds wasted on the scroungers would be better spent on care-homes for the elderly or cancer treatments. But the 'liberal' agenda in the UK merits that the scroungers are a more worthwhile cause than helping the elderly have a dignified life.

I can understand the frustration with certain people, but I wouldn't want to make a blanket statement about economic refugees, because joe public may not distinguish, between and economic/illegal refugee, and hard working legal immigrant. I would hate to think the Japanese would see me or the others in japan who, fill the jobs that can't be filled as economic refugees or some kind of scrounger. They work hard, pay their taxes as legal economic immigrants, and are net contributors.
As an NHS nurse I can promise you, most of the people who abused the system where the British people who could actually pay for their prescriptions.I had Americans,Aussies, Germans, Japanese all etc want to pay, but everyone is entitled to A&E treatment,no matter their status, and we said it was free.Any follow up they HAD TO pay for. The other groups are a minority within a very small minority. I think those who pay in are entitled to what they pay for and I take you point about those people who Abuse the system. My friend has MS had to retire from the NHS, and the looks she got from people, who thought she was scrounging because she DIDN'T look disabled enough on THAT day, was enough to make my blood.....
So I do, respectfully, disagree. I don't think there is any Liberal agenda. Nobody I have ever met wants to take money form those that needed it, to give they money to scroungers.Especially when we had to fill in the patients application forms for disability living allowance.

retirejapan.
Have you seen the Junior NISA accounts? They might be useful for this, and there is a chance children will be able to roll the contents over into a normal NISA when they reach the age of 20.

Yes! This is something I have been looking at doing for the kids, and hiding he book until they get to 55.( just kidding)
I agree with you analysis.There is probably a good chance they will let them roll it over.
Infact I'm probably of the mind set they are going to follow what the UK has done recently, and force everyone to make small contributions into a private pension as soon as they start work.
Especially if they aren't going to increase the retirement age, but I'm sure that has to come.

[Sybil]

I would hate to think the Japanese would see me or the others in japan who, fill the jobs that can't be filled as economic refugees or some kind of scrounger.

I don't think anyone would consider a person who is legitimately employed and paying taxes as an economic refugee. In the UK more than 30% of the sellers of 'Big Issue' are Romanian. They are able to get free housing and welfare benefits as they 'self-employed'. That is just one example of the abuse which takes place. It just means there is less in the pot for genuine cases.

My friend has MS had to retire from the NHS, and the looks she got from people, who thought she was scrounging because she DIDN'T look disabled enough on THAT day, was enough to make my blood.....

Agreed. It is shocking that people in genuine need are stigmatized because others abuse the system.

[Bubblegun]

I don't think anyone would consider a person who is legitimately employed and paying taxes as an economic refugee. In the UK more than 30% of the sellers of 'Big Issue' are Romanian. They are able to get free housing and welfare benefits as they 'self-employed'. That is just one example of the abuse which takes place. It just means there is less in the pot for genuine cases.

I totally agree, with you on people who are legitimately employed, but sadly, I do think there is a group that, aren't intelligent enough to have that nuanced discussion, and lump everyone together and extend the discussion into other areas. You certainly have a good point about certain groups. The Tube was terrible to ride on as we went to work, as they begged for money. Thankfully they changed the rules and they can't get free housing or welfare anymore. They have to work and pay, and they aren't entitled to free housing any more.So things have certainly change for the better in that regard, that now includes the Big Issue sellers.(link below) I had a problem as a nurse when people abused the Big Issue, because IMHO they were stealing money/income from people who are homeless, with mental health problems, in need of genuine help, and the sellers were stepping up to the plate in an attempt to change there future.



https://www.citizensadvice.org.uk/benef ... to-reside/

Court ruling.
https://www.dailymail.co.uk/news/articl ... Issue.html


I always bought one in the Uk and also in Japan when I see it. Even though I can't read the thing. ( total waste of money on my behalf) I gotta respect the Japanese homeless, who get up collect the cans to get some money. Way better than sitting my a cash machine begging.
Sounds like we have had many of the same experiences.

I do have a story though as a landlord, and I have to admit I have had more problems with British tenants than I've ever had with my Chinese, Syrian, and Polish tenants. They worked hard, payed, on the dot! looked after the place, apart from a few hiccups, and were very polite.
Conversely, the British tenant left my place looking like a toilet, and left it smelling like one too, and didn't look after the place at all. Cost me a 1000 pound to sort it out. I did have a little voice in my head, saying don't discriminate against the two young British women, but after the way they treated the place, phew! I wish I listened to it.

[Dyan Daley]

Kokumin nenkin is 16,000 yen a month. After paying it most people should also be trying to max out iDeCo and invest extra on the side. This should take priority over things like having a car, eating out, or holidays.

I don't do any of those three things, and not trying to be antagonistic here, by that level of scroogery sounds even more miserable than what are, odds-on, going to be miserable final years anyway...

Forfeit the entire journey, and its memories, in favour of a rigor mortis plod towards a destination that might not ever appear?

[RetireJapan]

I don't do any of those three things, and not trying to be antagonistic here, by that level of scroogery sounds even more miserable than what are, odds-on, going to be miserable final years anyway...

Forfeit the entire journey, and its memories, in favour of a rigor mortis plod towards a destination that might not ever appear?

That's fine. The message resonates with some people, and not with others. I think everyone needs to be putting away 10-30% of their income to invest towards retirement/wealth/durability.

Unfortunately most people seem to be making no provision for a potentially very long retirement (we're probably going to live to 90-100+). Perhaps they don't understand that the world is different than how it was when their parents or grandparents retired.

I personally have no intention on relying on the goodness of strangers, the government, or relatives to take care of me when I am old.

[Bubblegun]

Kokumin nenkin is 16,000 yen a month. After paying it most people should also be trying to max out iDeCo and invest extra on the side. This should take priority over things like having a car, eating out, or holidays.

I don't do any of those three things, and not trying to be antagonistic here, by that level of scroogery sounds even more miserable than what are, odds-on, going to be miserable final years anyway...

Forfeit the entire journey, and its memories, in favour of a rigor mortis plod towards a destination that might not ever appear?

I think I have fallen into that trap of trying to save so much with NISA, IDeCO, Japanese pension, UK pension, Property, and saving for kids education. etc etc. I think your spot on,it is important that we have a quality of life,(balance) when we will spend most of out life working, not in retirement.( sorry statistically speaking we are not going to live to 90+).
The government will say everyone is living longer.But as a nurse I can promise you very few live long enough to get out what they put in, thats why they are pushing up the working life. ( but that's not an excuse not to save for the future).
We should certainly enjoy our life while we are FIT, and young, because we will be ill when we retire.(statistically speaking).
I would add, while packing away 20% 30% of your income is ideal, if your single. I think this is unrealistic for MOST people who earn the average wage, and have kids.
If I think about it, most of us would have to save at least 50% of our salary, because we would have to pay for our Juku, kids HIgh School, medical fees, transport fees, not to mention junior high school too, and save for retirement.
Japan could make changes to make the system more efficient at collecting from the tax dodgers.

I personally have no intention on relying on the goodness of strangers, the government, or relatives to take care of me when I am old.

I agree whole heartedly. I don't think anyone wants to rely on the goodness of strangers, the government,or relatives if they CAN AFFORD IT.
However, I would like to say we have all Payed into the government service, just like we pay a private company into a NISA or IDeCo, and nobody should be shamed because they are receiving the service from the government they have honestly payed into. We ought to remember they have payed for the generation that was in front of them. We have no problem paying a private company for a service, and demanding they pay out fairly when we retire, so I'm not sure why the word "government" seems to have this negativity, as though anyone who has paid their fees, is some kind of scrounger, when we are customers that have payed over 40 years of contributions. We should support it and demand a decent pension. Personally I think it is because we are constantly fed news about certain groups that Abuse the system. Conversely ,we would praise someone for paying into a pension pot for 40 years. It's just that we are actually paying into a pyramid scheme. That is now inverting.
I'm not sure we are relying on the goodwill of strangers for our retirement, and i can certainly understand how we may not wish to rely on relatives, but I don't think it is a black an white issue.We all at times need to fall back on our family in times of hardship, and we need to also give out KIDS, Family a quality of life, wether that be the Nintendo Switch, games, trips, dinner, healthy food.

As I intimated earlier, the modern government pension is a legal pyramid scheme that relies on the next generation growing, and paying into the pension pot for todays pensioners.So personally I do not wish to criticise any person who cannot save enough, especially if companies don't wish to pay a decent wage so people CAN save for their future. I would rather we looked at how companies squeeze wages, or other things which prevent people/families actually saving for their future.


I think with the introduction of My number,NISA, IDeCo, they are preparing for Every single worker to sent up an account, and force everyone to contribute as soon as they start working. Similar to the UKs new works pension.

[RetireJapan]

I agree whole heartedly. I don't think anyone wants to rely on the goodness of strangers, the government,or relatives if they CAN AFFORD IT.
However, I would like to say we have all Payed into the government service, just like we pay a private company into a NISA or IDeCo, and nobody should be shamed because they are receiving the service from the government they have honestly payed into. We ought to remember they have payed for the generation that was in front of them. We have no problem paying a private company for a service, and demanding they pay out fairly when we retire, so I'm not sure why the word "government" seems to have this negativity, as though anyone who has paid their fees, is some kind of scrounger, when we are customers that have payed over 40 years of contributions. We should support it and demand a decent pension. Personally I think it is because we are constantly fed news about certain groups that Abuse the system. Conversely ,we would praise someone for paying into a pension pot for 40 years. It's just that we are actually paying into a pyramid scheme. That is now inverting.
I'm not sure we are relying on the goodwill of strangers for our retirement, and i can certainly understand how we may not wish to rely on relatives, but I don't think it is a black an white issue.We all at times need to fall back on our family in times of hardship, and we need to also give out KIDS, Family a quality of life, wether that be the Nintendo Switch, games, trips, dinner, healthy food.

I don't mean receiving a pension or using savings/investments when I say relying on the goodness of strangers, the government, or relatives. I am referring to the many people I run into who have no savings, are not paying into any pension, have not thought about the possibility of their circumstances changing, and somehow expect things will work out.

Now that is a leap of faith!