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Re: Can we rely on pensions?
Posted: Wed Mar 02, 2022 2:28 pm
by RetireJapan
It's a great question/topic.
I'll be doing some financial coaching in a couple of weeks (on the receiving end!) and in the process of preparing for that, I was reminded that our baseline spending is under 3m, and we are expecting to get more than 3m in nenkin (claiming from 70). The UK state pension, and our investments, will be backup.
I'm not too worried about the future barring black swan events (like nuclear war or the singularity). Not much we can do to prepare for those
Re: Can we rely on pensions?
Posted: Wed Mar 02, 2022 10:48 pm
by captainspoke
Wales4rugbyWC19 wrote: ↑Wed Mar 02, 2022 12:13 pm
Obviously nobody on this thread was paying into an Equitable Life pension. One of the most respected pension companies in the UK. A lot of those who invested who were expecting a good return have either died or are still waiting on arbitration, although there has been some pay-outs.
https://en.wikipedia.org/wiki/The_Equit ... ce_Society
Re: Can we rely on pensions?
Posted: Wed Mar 02, 2022 11:49 pm
by Wales4rugbyWC23
RetireJapan wrote: ↑Wed Mar 02, 2022 2:28 pm
It's a great question/topic.
I'll be doing some financial coaching in a couple of weeks (on the receiving end!) and in the process of preparing for that, I was reminded that our baseline spending is under 3m, and we are expecting to get more than 3m in nenkin (claiming from 70). The UK state pension, and our investments, will be backup.
I'm not too worried about the future barring black swan events (like nuclear war or the singularity). Not much we can do to prepare for those
Nuclear war unlikely, but a respected Pensions firm going bust a possibility that did happen. Even the UK's parliamentary MPs paid their pension additional voluntary contributions into Equitable Life. Needless to say the MPs got off relatively unscathed financially, unlike the everyday pension investors.
Re: Can we rely on pensions?
Posted: Thu Mar 03, 2022 12:24 am
by RetireJapan
Wales4rugbyWC19 wrote: ↑Wed Mar 02, 2022 11:49 pm
Nuclear war unlikely, but a respected Pensions firm going bust a possibility that did happen. Even the UK's parliamentary MPs paid their pension additional voluntary contributions into Equitable Life. Needless to say the MPs got off relatively unscathed financially, unlike the everyday pension investors.
Sure, but I'm not sure anyone is talking about private pensions on this thread. Only the public nenkin and UK state pension.
I do know some people with Japanese 'pension insurance' but even for them it is not a large part of their planning.
Re: Can we rely on pensions?
Posted: Thu Mar 03, 2022 1:32 am
by northSaver
RetireJapan wrote: ↑Thu Mar 03, 2022 12:24 am
Sure, but I'm not sure anyone is talking about private pensions on this thread. Only the public nenkin and UK state pension.
Actually I was talking about both kinds. As well as UK and Japan state pensions we also have company pensions from when we used to work in the UK. Specifically: AXA, BA and ANA. Two are very small and just icing on the cake. One is as large as a full UK state pension. I suppose I should mitigate the risk of this one going under by saving more and withdrawing using an appropriate SWR when the time comes. Something to work out this weekend
Re: Can we rely on pensions?
Posted: Thu Mar 03, 2022 2:21 am
by Haystack
I think in aggregate, this question is impossible.
Each pension State, private etc has different underlying's. Badly managed private and public pension plans have gone bust in the past, and will go bust in the future. The movement en masse to private equity is also concerning.
The Japanese pension for example is invested in 25% Domestic bonds, 25% Domestic stock, 25% International stock, 25% International bonds. Fairly conservative.
Some private pensions/DC plans are 100% JGBs. So very secure, with basically 0 growth.
It really depends...
Re: Can we rely on pensions?
Posted: Thu Mar 03, 2022 2:36 am
by RetireJapan
Wales4rugbyWC19 wrote: ↑Wed Mar 02, 2022 11:49 pm
Nuclear war unlikely, but a respected Pensions firm going bust a possibility that did happen. Even the UK's parliamentary MPs paid their pension additional voluntary contributions into Equitable Life. Needless to say the MPs got off relatively unscathed financially, unlike the everyday pension investors.
northSaver wrote: ↑Thu Mar 03, 2022 1:32 am
RetireJapan wrote: ↑Thu Mar 03, 2022 12:24 am
Sure, but I'm not sure anyone is talking about private pensions on this thread. Only the public nenkin and UK state pension.
Actually I was talking about both kinds. As well as UK and Japan state pensions we also have company pensions from when we used to work in the UK. Specifically: AXA, BA and ANA. Two are very small and just icing on the cake. One is as large as a full UK state pension. I suppose I should mitigate the risk of this one going under by saving more and withdrawing using an appropriate SWR when the time comes. Something to work out this weekend
Argh, my apologies. Take that comment back.
Re: Can we rely on pensions?
Posted: Thu Mar 03, 2022 6:20 am
by northSaver
Talking of inflation, am I right in assuming that the kokumin nenkin pension WILL increase with inflation, both before and after you start drawing it? Otherwise pensioners might starve to death as they get older, no?
Also, does anyone know if you can draw the kokumin nenkin if you no longer live in Japan? And, if so, will it still increase with inflation each year? The UK state pension won't if you live in Japan, but you can definitely draw it.
Sorry if this has already been answered on the forum. I searched the RetireWiki but couldn't find any details about inflation.
Re: Can we rely on pensions?
Posted: Thu Mar 03, 2022 6:42 am
by RetireJapan
northSaver wrote: ↑Thu Mar 03, 2022 6:20 am
Talking of inflation, am I right in assuming that the kokumin nenkin pension WILL increase with inflation, both before and after you start drawing it? Otherwise pensioners might starve to death as they get older, no?
Also, does anyone know if you can draw the kokumin nenkin if you no longer live in Japan? And, if so, will it still increase with inflation each year? The UK state pension won't if you live in Japan, but you can definitely draw it.
Sorry if this has already been answered on the forum. I searched the RetireWiki but couldn't find any details about inflation.
Nenkin is adjusted from time to time, but I am not sure what they base those adjustments on. I don't believe there is any difference between the amount of nenkin paid in Japan and nenkin paid abroad.
Re: Can we rely on pensions?
Posted: Thu Mar 03, 2022 6:58 am
by RetireJapan
I found this graph, which is not super-encouraging:
