Mulling over a blog post at the moment, but recently I have been thinking about how reasonable the cost of living can be in Japan (at least for our situation here in Sendai, owning or mostly owning our home).
Right now I am pretty confident about our ability to retire here and live off pensions and investments.
Looking at prices in other countries (UK, US, Australia, etc.), mostly housing but also food, eating out, utilities, etc. I'm not sure we would be able to do so in another country.
Even Thailand has seen prices explode since I first went there in 1997.
What do you think? Are you confident of being able to move out of Japan and life the same kind of lifestyle?
Housing is super cheap in Japan, which I would expect means that the cost of living is lower in Japan overall.
Certainly moving back to the UK to spend your retirement in rented accommodation
would be a tough proposition financially for most people.
However, if you have got to the point where you have bought and paid for a house in the UK, the costs of living
then reduce dramatically. If you can cover your rates, utility bills and food costs then that's pretty much it in terms
of essential spending, although we should probably add in dental costs (since NHS dentists no longer exist in much of the country)
and maybe house maintenance costs. However there are no charges for the NHS, and you should eventually get free
bus travel! (I do appreciate that the NHS has a lot of problems coming its way at the moment though.)
In Japan you would have to pay something for any medical treatments, and food costs (as in groceries) are generally higher
(depends on the exchange rate of course, but maybe as a consequence of the fact that almost no supermarket food in the UK has VAT applied,
UK food costs have tended to be significantly lower than in Japan).
Inflation may be having an effect, but with a weakening yen and a low self-sufficiency in food
https://www.nippon.com/en/japan-data/h01101/
Japan can't hope to escape those inflationary winds in food at least.
If you are lucky enough to buy a house with a large garden in the UK those food costs can be further offset
by growing your own fruit and vegetables of course - I guess this may also be possible in Japan in rural areas.
However there are a couple of other factors re: the UK - for those people who qualify for a state pension
then that pension will rise at the very least in line with inflation (so long as a triple lock is maintained)
whereas this UK pension will be frozen if you receive it in Japan (whereas the Japanese one will
be the same whether you receive it in the UK or Japan or elsewhere). For me the pension is likely
to be a reasonably significant component of my retirement income, so this is one consideration.
There are also a few general points concerning the long term - Japan is perhaps more likely to be adversely affected by
climate change than the UK, while Japan also has a strong population decline ongoing, while the UK's population is
rising ... although there are of course lots of other uncertainties.
I guess the decision also depends a lot on non-financial factors though - where are more of your friends / family,
what do you want to do in retirement etc. ?
