Delaying pension

[Bubblegun]

No.

Thank you that's cleared up. So basically we can pay up to 65.(if we don't collect at 60). For me then, there really is no "CATCH UP".LOL as i planned on paying until 65.

But, if you don't go and specifically apply to pay, they'll stop collecting contributions at 60.

Thanks for that. Totally got it. Basically delaying taking the pension until 65yoa.

[RetireJapan]

Thank you that's cleared up. So basically we can pay up to 65.(if we don't collect at 60). For me then, there really is no "CATCH UP".LOL as i planned on paying until 65.

But, if you don't go and specifically apply to pay, they'll stop collecting contributions at 60.

Thanks for that. Totally got it. Basically delaying taking the pension until 65yoa.

2 different things.

[Tkydon]

Thank you that's cleared up. So basically we can pay up to 65.(if we don't collect at 60). For me then, there really is no "CATCH UP".LOL as i planned on paying until 65.

But, if you don't go and specifically apply to pay, they'll stop collecting contributions at 60.

Thanks for that. Totally got it. Basically delaying taking the pension until 65yoa.

If you take the Pension at 60, you will have the double disadvantage of (say) only 25 years of contributions and 70% of the value that you would be entitled to at 65 on the same 25 years' contributions.

https://www.nenkin.go.jp/service/jukyu/ ... 21-01.html

If you take the Pension at 65, BUT you Do Not make the voluntary contributions from 60 to 65, you will only have the single advantage of receiving 100% of the value that you would be entitled to, BUT only on 25 years' contributions.

If you take the Pension at 65, AND you make the voluntary contributions from 60 to 65, you will have the double advantage of increasing the Qualifying Years to (say) 30 years of contributions and receive 100% of the value that you would be entitled to on 30 years' contributions.

If you delay taking the Pension past 65, AND you have made the voluntary contributions from 60 to 65, you will have the advantage of increasing the the value that you would have been entitled to at 65 on the same 30 years' contributions, to say 142% at age 70 or 184% at age 75 on the same 30 years' contributions.

https://www.nenkin.go.jp/service/jukyu/ ... 21-02.html

[Bubblegun]

But, if you don't go and specifically apply to pay, they'll stop collecting contributions at 60.

Thanks for that. Totally got it. Basically delaying taking the pension until 65yoa.

2 different things.

Thanks for trying to keep me on the straight and narrow.
So delay taking the pension until 65, but continue to pay contributions until I'm 65.( which I was planning on doing as per my home country's pension) Then start taking the pension if I want to. Oooooor, I can go full-on dice-rolling gambling and delay taking the pension with some financial upgrading.
FFS...sometimes I think we need a degree in mathematics, and statistics, along with being a demographic expert and a certified doctor, to make an informed choice. LOL.
How come Japan can make a world-class rail system, fantastic cars, an awesome games machine, have great ramen, and vending machines that sell everything, but give them a piece of paper to plan a simple pension system a national insurance system, and suddenly things seem to go tits up. LOL. Could anyone have set up a more complicated system.

[Bubblegun]

But, if you don't go and specifically apply to pay, they'll stop collecting contributions at 60.

Thanks for that. Totally got it. Basically delaying taking the pension until 65yoa.

If you take the Pension at 65, AND you make the voluntary contributions from 60 to 65, you will have the double advantage of increasing the Qualifying Years to (say) 30 years of contributions and receive 100% of the value that you would be entitled to on 30 years' contributions.

If you delay taking the Pension past 65, AND you have made the voluntary contributions from 60 to 65, you will have the advantage of increasing the the value that you would have been entitled to at 65 on the same 30 years' contributions, say 142% at age 70 or 184% at age 75 on the same 30 years' contributions.

If you take the Pension at 65, AND you make the voluntary contributions from 60 to 65, you will have the double advantage of increasing the Qualifying Years to (say) 30 years of contributions and receive 100% of the value that you would be entitled to on 30 years' contributions.

This one was my plan.

If you delay taking the Pension past 65, AND you have made the voluntary contributions from 60 to 65, you will have the advantage of increasing the the value that you would have been entitled to at 65 on the same 30 years' contributions, say 142% at age 70 or 184% at age 75 on the same 30 years' contributions.

This one feels like playing poker with the Grim Reaper.

[JimNasium]

I missed some years paying pension by (stupidly) ignoring paying it when I first arrived here, but I’m back on track now. My plan is to make contributions until I’m 65 to get as much as possible out of it. But, there is something I’ve noticed, and would be interested in hearing your guys thoughts. From what I can tell if you make less than 1,000,000 yen per year you become low income and don’t have to pay residence tax, and your medical payments become lower (and I assume there’s an advantage with income tax and other things too). Is there a point where it would be better to stop paying extra pension to stay below this line? (I have my iDeCo and NISA set up, as well as some other investments and assuming an inheritance some time well into the future, so I should be OK financially).

[Tkydon]

I missed some years paying pension by (stupidly) ignoring paying it when I first arrived here, but I’m back on track now. My plan is to make contributions until I’m 65 to get as much as possible out of it. But, there is something I’ve noticed, and would be interested in hearing your guys thoughts. From what I can tell if you make less than 1,000,000 yen per year you become low income and don’t have to pay residence tax, and your medical payments become lower (and I assume there’s an advantage with income tax and other things too). Is there a point where it would be better to stop paying extra pension to stay below this line? (I have my iDeCo and NISA set up, as well as some other investments and assuming an inheritance some time well into the future, so I should be OK financially).

The simple answer is No.

There is a special Tax Deduction for Public Pensions, which reduces the Taxable Income, but Tax and Health Insurance will be withheld from the Pension payment.

Now, National Income Tax is levied at your Marginal Tax Rate in the year in which the Income is received after all deductions and allowances, but Residents' Taxes are levied at 10% on all Taxable Income after all deductions and allowances, and 5% on Capital Gains, on the previous year's declared Taxable Income (upto 18 months in arrears).
Your main deductions would be the Individual Deduction of Y480,000, Spouse Deduction of Y380,000, Y380,000 per Dependent and Y680,000 for any Dependent between 19 and 23, Insurance Premiums and iDECO Contributions, and the National Pension Deduction. Maybe also Mortgage Tax Relief, Medical Expenses over Y100,000, Furusato Nouzei, and any other deductions. Is that what you meant by the Y1M figure?
How much you receive will depend on the number of qualifying years, and whether you are on the Basic Pension or the Employee's Pension - Kosei Nenkin - or other.
Income from iDECO will also be taxable, though NISA Disbursments are completely tax free.
If you make less than the sum of all your allowances and deductions, then you are tax free, but remember that residents' taxes and health insurance premiums are based on the previous year's income.

There are three portions to the Kokumin Kenkou Hoken National Health Insurance Premium:
1. Basic Medical Care - Payable for All Household Members (Basic fund for the National Health Insurance)
2. Latter Life Care - Payable for All Household Members (Financial support for the Medical Insurance System for the Elderly Aged 75 and Over)
3. Long-Term Nursing Care - Payable for Household Members aged 40 to 64 (Nursing-care insurance premiums for people aged 40 to 64) (so not after 65).

Each portion consists of a Per Capita Premium and an Income Related Premium based on the total Household Taxable Income in the previous tax year, with an absolute maximum level for each portion per household. You should check the details for your Ward or City on their Website but my local Ward is currently set at these percentages of the previous year's total household Taxable Income, and maximum household premiums.
1. 8.00％ - Household Maximum limit: 650,000 yen
2. 2.76％ - Household Maximum limit: 220,000 yen
3. 2.58％ - Household Maximum limit: 170,000 yen
You can apply for a reduction in premiums in case of real hardship.

[Wales4rugbyWC23]

Going off on a slight tangent, but what are the rules about submitting a tax return when you are retired? Will I still have to submit when I am in my 80s if I have different sources of pension income?

[Beaglehound]

I missed some years paying pension by (stupidly) ignoring paying it when I first arrived here, but I’m back on track now. My plan is to make contributions until I’m 65 to get as much as possible out of it. But, there is something I’ve noticed, and would be interested in hearing your guys thoughts. From what I can tell if you make less than 1,000,000 yen per year you become low income and don’t have to pay residence tax, and your medical payments become lower (and I assume there’s an advantage with income tax and other things too). Is there a point where it would be better to stop paying extra pension to stay below this line? (I have my iDeCo and NISA set up, as well as some other investments and assuming an inheritance some time well into the future, so I should be OK financially).

I have wondered about this too. Not sure about the exact numbers but it is true that there will be a certain level of pension income that will be optimal in terms of eliminating national and local income tax, as well as reducing health insurance. With new NISA being 'reusable', there is an argument that cash one has earmarked for nenkin from 60 to 65 would be better invested tax free in NISA if the pension income it would generate would be subject to the government claw. Of course it all depends on how long you live, which is a bit of an unknown

[Tkydon]

Going off on a slight tangent, but what are the rules about submitting a tax return when you are retired? Will I still have to submit when I am in my 80s if I have different sources of pension income?

Yes, if you have sources of income that are not your Japanese National Pension, especially overseas pension or income, and you have any deductions that you wish to claim.