RetireJapan

TokyoWart wrote: ↑Fri Jun 17, 2022 10:39 amI attended an FDA advisory meeting once where a company was presenting a new opioid formulation that would be more difficult to abuse and almost every public comment in the meeting was from a family who had lost someone to overdose and argued tearfully AGAINST approval of a drug that was designed to reduce the risk. That company subsequently went bankrupt from the US opioid litigation which is so expensive it has further decreased drug development in this area. I don’t personally know of anyone working in this development space because of the risk of litigation tied to abuse.

Had a cousin in his 20s die of an overdose recently. Most likely meth mixed with fentanyl.

Drug abuse is one more reason the US is doomed, and a reason not to retire there. Plus, those needing drugs often turn to guns to get them.

I'm halfway through Empire of Pain now (Sackler story). @TokyoWart Read it? Comments?

IloveJapan wrote: ↑Sat Jun 11, 2022 3:23 pm Regarding inflation, I believe Japan has every bit as much inflation as the United States! I’m not joking! Consider this: Up until now, Japan has been a country with a lot of shrinkflation for many products. Shrinkflation means that companies facing cost pressures from materials, salaries and the like will reduce the number or amount of items they offer in a pack while keeping the price the same! So a company might for example reduce the number of biscuits in a packet from 10 to 9 rather than raising the price. But in fact that means the price of that packet of biscuits has effectively increased by 10%, without the consumer noticing! One prime reason this phenomenon is so huge in Japan, is that women controlling the family purse strings are highly sensitive to price increases!

I do believe people’s standard of living is being affected, but they are just not noticing it yet…

The other thing I should point out is that pensions may not keep up with inflation, because governments can’t afford to increase them in line with high inflation. I believe the Japanese authorities will find a way to look after the retired, helped by Japan’s giant public pension fund. As for the frozen UK pension, that will end up being inflated away more quickly than people anticipate! Even a British person retiring in a non-frozen country may suffer, because a country with double-digit inflation (the UK) won’t be able to keep its pension promises even if it wanted to.

Tell me, what do you consider to be inflation-friendly jobs or investments?

I agree Shrinkflation is real, but I think people do notice it.

It shows up in a cut in service too, for example hotels that don't do daily housekeeping.

Also in smaller discounts offered: my daily bus ride did have 30% discount for off peak, and recently cut it to 25%. JR no longer offers 11 tickets for the price of 10.

There is a great website here:

https://shrinkflation.info/

Still, overall the US has much more inflation, especially as can be seen in the housing market.

I'm halfway through Empire of Pain now (Sackler story). @TokyoWart Read it? Comments?

I have not had a chance to read it yet but your question reminds me that I should. Sam Quinone’s “Dreamland” is quite good.

RetireJapan wrote: ↑Sat May 21, 2022 5:56 am 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?

I think Japan is going to be a lot more expensive to retire in that other countries. Assuming you own a property by the time you retire, your biggest expenses are going to be food, healthcare and utilities. Food is much more expensive in Japan than almost anywhere else in the world, and healthcare is free in many European countries and the UK. Again with utilities, Japan is much more expensive for electricity in normal times - obviously the war in Ukraine has changed this over the short term.

This is not to mention that Japanese taxes are also much higher and stricter - although obviously there are ways to reduce these. And, finally - when you do die - inheritance taxes again are much worse here.

Deep Blue wrote: ↑Mon Jun 27, 2022 6:08 am I think Japan is going to be a lot more expensive to retire in that other countries. Assuming you own a property by the time you retire, your biggest expenses are going to be food, healthcare and utilities. Food is much more expensive in Japan than almost anywhere else in the world, and healthcare is free in many European countries and the UK. Again with utilities, Japan is much more expensive for electricity in normal times - obviously the war in Ukraine has changed this over the short term.

This is not to mention that Japanese taxes are also much higher and stricter - although obviously there are ways to reduce these. And, finally - when you do die - inheritance taxes again are much worse here.

I don't know about all of that. The UK has seen crazy price increases in utilities this year, eating out is much cheaper here than the UK/US, and unless there are major changes to the tax system here I can't see us paying much tax here in retirement.

Inheritance taxes are comparable to the UK, and again I don't see them being much of a thing. I am planning to give money to family now rather than later, and if I die before my wife the spouse inheritance tax bracket is 160m+ -sadly my assets are nowhere near that level!

This is not to mention that Japanese taxes are also much higher and stricter - although obviously there are ways to reduce these. And, finally - when you do die - inheritance taxes again are much worse here.

Japanese inheritance taxes are high but income taxes here are so progressive that at lower income levels the population pays much less than they would in most EU countries and most taxes related to investment income or capital gains are set at a relatively low 20% regardless of income (those taxes would be close to 40% for a high income investor living in California, for instance). For most retirees that is unlikely to be a problem.

Deep Blue wrote: ↑Mon Jun 27, 2022 6:08 am
... Food is much more expensive in Japan than almost anywhere else in the world, and healthcare is free in many European countries and the UK.

Rice is still cheap. But I never eat it so I'll need to get an allotment and grow by own potatoes, although I did watch a youtube about growing potatoes in buckets with high yield. (Literally hundreds of videos on this.) And remember these aren't taxed and no labor costs! My 83 yr old FIL grows spuds in his allotment and just sent me a few kilos by post. Talk about win-win-win, it's a low cost leisure persuit, cost avoiding and health benefits up the wazoo! As they now actually sell spuds indivudually in my local super (who can afford more than one per meal!) you can only imagine my delight.

Fruit is another weird one. The expectation on perfection creating a false market. High overheads to grow them and get them onto shelves looking like that. My hope/expectation is we'll gradually start to see more accessible "misshapen fruit"* which my wife says is already available at reduced price when ordering through the coop we use and at some of the super markets, sometimes.
I would be happy to grow fruit but I think growing the type of veg I like is more at my skill level. Carrots and such.. Heck, even the Supermarket root veggies seem awefully uniform in size here. (No chance of finding a Turnip shaped like a...)

* "Misshapen Fruit" in Japan is just called "fruit" in the UK. Where we have, and please don't repeat this in polite company, more than one shape of Strawberry!!!

RetireJapan wrote: ↑Mon Jun 27, 2022 6:28 amI don't know about all of that.

I do. Admittedly I did my analysis when the yen was 110/USD not 135 but still it has not changed enough to shift the numbers in Japan's favour - simply narrowed the gap a bit.

RetireJapan wrote: ↑Mon Jun 27, 2022 6:28 am The UK has seen crazy price increases in utilities this year, eating out is much cheaper here than the UK/US, and unless there are major changes to the tax system here I can't see us paying much tax here in retirement.

Eating out is cheaper here, but this is not a significant part of most retiree's budgets. Eating-in is much cheaper in the UK and this is a much more significant part of spending. The utility costs in the UK are definitely higher this year and causing real pain, but it is reasonable to expect these to fall back when the Ukrainian situation is resolved. It is also worth noting Japan is subsidizing both petrol and electricity costs which is entirely unsustainable.

Tofu is cheaper in Japan, but tofu doesn't make up a big part of anyones budget. Best to focus on what matters - housing, healthcare, groceries and tax.

Have a look at sites like this to see what typical Japanese households spend their money on. Even for non-retirees, you can see an average household only spends 12,000 yen a month on eating out but 60,000 yen on buying food from stores.

https://resources.realestate.co.jp/livi ... ld-survey/

What do households spend the most money on?
Excluding rent or home mortgage payments, the top three items households spent money on were: 1) “Non-consumption expenditures” (basically, direct payroll taxes and social security payments), at an average of ¥98,276 per month 2) Food, at an average of ¥74,770 per month, and 3) “Other Consumption Expenditures,” which consist of pocket money, expenses for going out/socializing, and remittances to children and family members not living under the same roof. The average for this category was ¥61,439 per month.

Talking of unsustainable, Japan's fiscal position is terrifying and must be part of anyone's long term planning. With a shrinking working cohort supporting a growing retired cohort Japan needs to take decisive action now to address this. However, none of the politicians seem interested in pushing through the unpopular changes needed to put the GoJ on a sustainable trajectory. Without these reforms, the only option will be reduced benefits or increased taxation - my guess is both.

References
https://mainichi.jp/english/articles/20 ... op/016000c
https://www.spglobal.com/commodityinsig ... arch-10-16

Moneymatters wrote: ↑Mon Jun 27, 2022 7:46 amRice is still cheap.

It isn't though.

In Japan white rice is about 1500 yen for 5kg, cheapest I can find looking quickly here in Tokyo.

https://shop.aeon.com/netsuper/01050000 ... 98159.html

In the UK you can buy this quantity for 6.50 GBP - about 1,100 yen.

https://www.tesco.com/groceries/en-GB/p ... /254877362

So even for something produced all over Japan, it is much cheaper to buy in the UK even when the yen is super cheap.... same as fruit.... same as vegetables... why? Tariffs. Japan is forcing consumers of food (everyone) to subsidize the farmers here.

Moneymatters wrote: ↑Mon Jun 27, 2022 7:46 am
Fruit is another weird one. The expectation on perfection creating a false market. High overheads to grow them and get them onto shelves looking like that. My hope/expectation is we'll gradually start to see more accessible "misshapen fruit"* which my wife says is already available at reduced price when ordering through the coop we use and at some of the super markets, sometimes.

We order a lot of fruit and veg direct from the farmers on Mercari. That seems to have become an option for them to sell their small/oddly shaped produce when supermarkets won't take it. The savings are worthwhile for us as a big family so we can happily order and consume kilograms at a time.