RetireJapan

RetireJapan wrote: ↑Fri Oct 27, 2023 12:22 am

captainspoke wrote: ↑Thu Oct 26, 2023 10:25 pm I do understand the point, but couldn't that also be used as a sales pitch for the 'simplicity' of an annuity?

Absolutely. I will certainly be taking a look at moving some of our capital into annuities later, provided I can find reasonably priced ones. I don't fully trust that I will remain compos mentis, and my wife certainly is not prepared to manage our portfolio if something happened to me. Far better to have guaranteed cashflow that would be enough to live on.

goodandbadjapan wrote: ↑Fri Oct 27, 2023 12:55 am

RetireJapan wrote: ↑Fri Oct 27, 2023 12:22 am

captainspoke wrote: ↑Thu Oct 26, 2023 10:25 pm I do understand the point, but couldn't that also be used as a sales pitch for the 'simplicity' of an annuity?

Absolutely. I will certainly be taking a look at moving some of our capital into annuities later, provided I can find reasonably priced ones. I don't fully trust that I will remain compos mentis, and my wife certainly is not prepared to manage our portfolio if something happened to me. Far better to have guaranteed cashflow that would be enough to live on.

Judging when to make the move might be difficult. I'd imagine most people think they are still able to handle most tasks until it is too late, by which time setting up an annuity or whatever might be difficult. I wonder if you can set up some kind of power of attorney stating what you want done when the time comes and giving the authority to someone to make the changes.

goodandbadjapan wrote: ↑Fri Oct 27, 2023 12:55 am Judging when to make the move might be difficult. I'd imagine most people think they are still able to handle most tasks until it is too late, by which time setting up an annuity or whatever might be difficult. I wonder if you can set up some kind of power of attorney stating what you want done when the time comes and giving the authority to someone to make the changes.

captainspoke wrote: ↑Thu Oct 26, 2023 10:25 pm

RetireJapan wrote: ↑Thu Oct 26, 2023 2:31 am ...Getting a cash transfer every couple of months instead of dealing with an online broker and making decisions about selling might be much easier, particularly as you get older.
...

I do understand the point, but couldn't that also be used as a sales pitch for the 'simplicity' of an annuity?


Tho I'm US and not in the loop on it (and people here are generally savers/investors--prospective retirees, rather than actually being retired), other than the viability of the 4% rule there seems to be little talk about the end game for NISA and ideco. Is it really that challenging to sell as needed, or in a planned way?

Tkydon wrote: ↑Fri Oct 27, 2023 8:36 am You could select to take the Pension, pay the tax, and set up a parallel Tsumitate NISA to sweep it up and continue DCA Tax Free forever...




The Canadian Discussion of the Early vs Late Debate I mentioned above is here:

https://youtu.be/m9PXPjAQVeg

@ 44:00:00 According to the featured Canadian Financial Planner, due to the different Indexing Values actually used for annual increases to Canadian Pensions vs the annual increase to the monthly amount if the pensioner delays receiving his/her Canadian Pension, Canadian Pensioners should take their Pension earlier, and NOT delay taking benefits until later, as the break-even on delaying taking the Canadian Pension would not be achieved until the pensioner reached 105...

Do the two different indexing values also apply to Japanese Pension?

The 0.7% increase Per Year from 65 is the approximately the same... so 142% at age 70... 184% at age 75 or over...

Would it be even more beneficial to take the 0.6 hit to accelerate to 60 ???
In Japan, if you pull the trigger at 60 you get 76% of the Full 100% 65 amount (discounted at approximately 0.6% per year).

Tkydon wrote: ↑Thu Oct 26, 2023 3:07 pm I assume you are talking about the Japanese Pension?

And I assume you do not have a full 480 months at age 60 to qualify for the full Pension at 65?

If you reach 60, you can go to the Pension Office and apply to pay voluntary contributions to get your number of contributions up by another 60 months... You cannot pay voluntary contributions past age 65.

You can see the Mark-Down Factor if you decide to take the Japanese Pension before 65 (between 60 and 64 + 11 months) based on the number of Qualifying Months at the Time here:
(You will receive the Qualified Pension x (1 Minus Discount Factor shown)
https://www.nenkin.go.jp/service/jukyu/ ... 21-01.html

You can see the Mark-Up Factor if you decide to take the Japanese Pension ater 65 (between 65 + 1 month and 75) based on the number of Qualifying Months at age 65 here:
(You will receive the Qualified Pension x (1 Plus the Mark-Up Factor shown)
https://www.nenkin.go.jp/service/jukyu/ ... 21-02.html

There was some discussion on the Rational Investor Podcast some time ago at the end of one of their episodes asking the same question for Canadian Retirees, and based on different factors for the Mark-Up vs Cost-Of-Living adjustments, I think they came to the conclusion that for Canadian Retirees it did not make sense to delay receiving the Canadian Pension.

I think you'll find reference to the video in 'Recommended Videos'

Wales4rugbyWC23 wrote: ↑Fri Oct 27, 2023 10:06 am The British state pension

Wales4rugbyWC23 wrote: ↑Fri Oct 27, 2023 10:06 am

Tkydon wrote: ↑Thu Oct 26, 2023 3:07 pm I assume you are talking about the Japanese Pension?

And I assume you do not have a full 480 months at age 60 to qualify for the full Pension at 65?

If you reach 60, you can go to the Pension Office and apply to pay voluntary contributions to get your number of contributions up by another 60 months... You cannot pay voluntary contributions past age 65.

You can see the Mark-Down Factor if you decide to take the Japanese Pension before 65 (between 60 and 64 + 11 months) based on the number of Qualifying Months at the Time here:
(You will receive the Qualified Pension x (1 Minus Discount Factor shown)
https://www.nenkin.go.jp/service/jukyu/ ... 21-01.html

You can see the Mark-Up Factor if you decide to take the Japanese Pension ater 65 (between 65 + 1 month and 75) based on the number of Qualifying Months at age 65 here:
(You will receive the Qualified Pension x (1 Plus the Mark-Up Factor shown)
https://www.nenkin.go.jp/service/jukyu/ ... 21-02.html

There was some discussion on the Rational Investor Podcast some time ago at the end of one of their episodes asking the same question for Canadian Retirees, and based on different factors for the Mark-Up vs Cost-Of-Living adjustments, I think they came to the conclusion that for Canadian Retirees it did not make sense to delay receiving the Canadian Pension.

I think you'll find reference to the video in 'Recommended Videos'

I think this the Japanese state pension that everyone is commenting about which I think if you were to pay the full 480 months you would get the jaw-dropping amount of just over 60,000 yen per month. Hardly worth delaying it for a few thousand yen more. I don't see it either increasing substantially. The British state pension, on the other hand's voluntary contributions are worth more than their weight in gold.