RetireJapan

TokyoWart wrote: ↑Mon Jan 04, 2021 6:11 pm

akizoid wrote: ↑Mon Jan 04, 2021 8:57 am Thank you for your reply.
I have already registered for Nenkin and tried there simulator. It says that I will get 165000 per month.
Now, I am not sure how to interpret the result.
Does it mean that this value is based on my contribution so far?
Or based on what I will contribute till I retire?

Also, wanted to understand what is the monthly contribution people on average make to pension?
Just to see, if my monthly contribution is good or bad.


Regards
Aki

Here are the numbers from my most recent pension projection (by postcard during my birthday month):

Contributed for 280 months so far
Contributed a total of 16,964,897 yen to the pension system
Expected pension at age 65 (I am currently 58; my understanding is that this is the figure if I stop contributing now): 1,781,962 yen per year
of that amount 499,962 yen is 基礎年金 and 1,282,000 is 一般厚生年金.

For your question about monthly contribution it currently maxes out at 59,475 yen/month (was 56,730 yen/month until a few months ago) and I think around 193,980 for bonus.

Just regarding the contribution calculation. The max deduction for a single bonus payment of 1,500,000 or higher is currently 137,250.

Kousei nenkin requires 18.3% of salary to be born equally by the employer and employee. (It's actually a combination of 15.9%厚生 and 2.4%免除保険 not sure how people get the exemption part removed though. I suspect most people are on the hook for the 18.3% calculation.).

Anyhow, the employer and employee each need to pay 9.15% up to the limits.
650,000 * 9.15% = 59,475
1,500,000 * 9.15% = 137,250 (But can have 2 bonus payments per year.)

BTW, I strongly suspect your projection is based on you working and contributing until 60.
Dirty maths again.
780,000 Base pension / 480 * 280 = 455,000 (You've paid 280 months so far.)
780,000 Base pension / 480 * 302 = 494,000 (If you pay two more years to 60.)

Just regarding the contribution calculation. The max deduction for a single bonus payment of 1,500,000 or higher is currently 137,250.

I only receive one bonus a year but I paid 193,980 in koseinenkin on my last bonus.

TokyoWart wrote: ↑Tue Jan 05, 2021 1:06 am

Just regarding the contribution calculation. The max deduction for a single bonus payment of 1,500,000 or higher is currently 137,250.

I only receive one bonus a year but I paid 193,980 in koseinenkin on my last bonus.

Are you sure that wasn't your bonus payment and monthly salary combined?
193,980 - 137,250 = 56,730

(and 56,730 is exactly 620,000 * 9.15% which was the previous max salary limit.)

maths eh.

Moneymatters wrote: ↑Tue Jan 05, 2021 1:27 am

TokyoWart wrote: ↑Tue Jan 05, 2021 1:06 am

Just regarding the contribution calculation. The max deduction for a single bonus payment of 1,500,000 or higher is currently 137,250.

I only receive one bonus a year but I paid 193,980 in koseinenkin on my last bonus.

Are you sure that wasn't your bonus payment and monthly salary combined?
193,980 - 137,250 = 56,730

(and 56,730 is exactly 620,000 * 9.15% which was the previous max salary limit.)

maths eh.

Whoa!!! You are right! I took the number from the summary postcard and July had both of those payments combined. Nice catch!

Thanks a lot for all your replies.
It helped clarify lot of things.
Though bit disappointed with final monthly pension figures. Will have to add lots of buffer for the future.

Thanks
Aki

akizoid wrote: ↑Tue Jan 05, 2021 4:18 am Though bit disappointed with final monthly pension figures. Will have to add lots of buffer for the future.
Thanks
Aki

You have come to the right place, then. Follow Ben's posts on the main site, look at how much you can put into iDeco and NISA, and if possible add a little extra into a taxable/tokutei account as well. If you invest sensibly, and have time on your side, you should be able to create this buffer.