Simple Q&A - iDeCo

[RetireJapan]

If I cash out all my ideco and the net amount is 1,200,000 yen what income/resident tax would be payable?

Assuming I have no other income that tax year.

(My net amount is the total of the account at time of selling, less the annual deductions for years contributing then halved.)

Depends how long you have been paying into it! I am writing a blog post about iDeCo taxation at the moment

[adamu]

If I cash out all my ideco and the net amount is 1,200,000 yen what income/resident tax would be payable?

Assuming I have no other income that tax year.

(My net amount is the total of the account at time of selling, less the annual deductions for years contributing then halved.)

Accounting for the basic deduction and not including 2024's 30k allowance per household member, and assuming you didn't pay any social insurance, ¥36,400 (5% of (1.2M - 480k) plus special reconstruction). But if you paid any insurance that'll be deducted from income too, so probably less.

It looks like residence tax might be 10% but I'm not sure.

You can play with the numbers at kaikei7.com

[Moneymatters]

If I cash out all my ideco and the net amount is 1,200,000 yen what income/resident tax would be payable?

Assuming I have no other income that tax year.

(My net amount is the total of the account at time of selling, less the annual deductions for years contributing then halved.)

Accounting for the basic deduction and not including 2024's 30k allowance per household member, and assuming you didn't pay any social insurance, ¥36,400 (5% of (1.2M - 480k) plus special reconstruction). But if you paid any insurance that'll be deducted from income too, so probably less.

It looks like residence tax might be 10% but I'm not sure.

You can play with the numbers at kaikei7.com

Thx. So not eligible for the 60万 public pension allowance for those under 65?

https://www.nenkin.go.jp/faq/jukyu/juky ... 21-12.html

That 60+48 would bring the total to 108万 for the allowance. For someone under 65..

Edit.(note to self. Read the wiki!)

Ok. So I need to opt for the pension to get the pension allowance. And that’s a min for 5 years as pension.
I’ll do that..

From wiki.

” If opting for a pension, a Pension Income Deduction (公的年金等控除) applies.“

[adamu]

Ok. So I need to opt for the pension to get the pension allowance. And that’s a min for 5 years as pension.
I’ll do that..

From wiki.

” If opting for a pension, a Pension Income Deduction (公的年金等控除) applies.“

I looked into it a bit more, and it looks like pension payments are subject to 5.1% witholding tax, so you might have to do a tax return to apply the deduction. I'm not sure though, it doesn't seem likely that the deduction wouldn't be applied to most people by default.

[Moneymatters]

Ok. So I need to opt for the pension to get the pension allowance. And that’s a min for 5 years as pension.
I’ll do that..

From wiki.

” If opting for a pension, a Pension Income Deduction (公的年金等控除) applies.“

I looked into it a bit more, and it looks like pension payments are subject to 5.1% witholding tax, so you might have to do a tax return to apply the deduction. I'm not sure though, it doesn't seem likely that the deduction wouldn't be applied to most people by default.

Lump sum it is then.
It’s no coincidence my family crest is just a bean bag with
“Inertiam super omnia”..

[JimmyK]

Hi. Does anyone have any updates on proposed increases to iDeCo contributions? I’m a company employee and I believe the maximum monthly amount I can put in is JPY23k (which I’ve yet to set up!), but this could increase to up to JPY61k per month soon. Haven’t submitted paperwork to get the ball rolling, so if I did so now with the JPY23k limit would I need to resubmit the paperwork if the limit increases? I wonder also have this works when on medical leave? I will be taking some time off work shortly under such conditions, but I’m not sure if I need to get the iDeCo application in before that starts, or what impact medical leave has? Something I’ll be checking with my company too, but if anyone has had experience with such matters it would be good to hear.

[beanhead]

Hi. Does anyone have any updates on proposed increases to iDeCo contributions?

The law has not changed yet, so no-one will have any updates.

My guess (and hope) is that no further paperwork is needed. If you made a change from 23,000 to, say, 20,000 per month, you just fill out an online form with your broker. The change takes some time to work its way through the system.
In an ideal world, the increase from 23,000 to 60 something a month will be dealt with the same way. I am sure the major brokers will update their iDeCo customers, so keep an eye on your email / broker website.

[adamu]

I wonder also have this works when on medical leave? I will be taking some time off work shortly under such conditions, but I’m not sure if I need to get the iDeCo application in before that starts, or what impact medical leave has?

The key point is what your pension status is. As long as you remain an employee at the company and a category 2 insured person, there will be no change.