About stopping contributions

[allThatMoney]

Hello,

I just stumbled upon this site and try to get my head around all this stuff. Up until last weekend I never thought about retirement before. I have three questions and would appreciate if someone could answer these.

1. Can you stop payments at any point? It says the minimum payment is 5,000 yen per month. On Rakuten site it says you can stop contributions by submitting something that you lost your qualifications to contribute. So it means as long as I'm qualified, I have to contribute? What if I become unemployed and for whatever reason have financial troubles. Is it then possible to stop contributions or it has to be the minimum 5,000 per month?

2. I can only contribute from the month that I signed up, but I cannot contribute for the entire year (for months before I signed up), is it correct? For example if I sign up now, I cannot just pay contributions for the entire year 2018, but I can only contribute for whatever 5 months are remaining of the year?

3. What if at 50 years old I'm told that I have some illness and only few years left to live. It means I can never receive my money (can only inherit it to somebody else after I die)?

Thanks!

[RetireJapan]

Hi ATM (nice user name)

Hello,

I just stumbled upon this site and try to get my head around all this stuff. Up until last weekend I never thought about retirement before. I have three questions and would appreciate if someone could answer these.

1. Can you stop payments at any point? It says the minimum payment is 5,000 yen per month. On Rakuten site it says you can stop contributions by submitting something that you lost your qualifications to contribute. So it means as long as I'm qualified, I have to contribute? What if I become unemployed and for whatever reason have financial troubles. Is it then possible to stop contributions or it has to be the minimum 5,000 per month?

2. I can only contribute from the month that I signed up, but I cannot contribute for the entire year (for months before I signed up), is it correct? For example if I sign up now, I cannot just pay contributions for the entire year 2018, but I can only contribute for whatever 5 months are remaining of the year?

3. What if at 50 years old I'm told that I have some illness and only few years left to live. It means I can never receive my money (can only inherit it to somebody else after I die)?

Thanks!

1. If you are unemployed I believe you will no longer be able to pay in (as you probably won't be paying into the pension).
2. iDeCo has a monthly allowance only, and you cannot backpay at the moment.
3. Yep, your heirs will get the money.

[Jansen]

Hasn't iDeco changed there rules such that you're able to deposit the entire year's worth at the end of the year?

[RetireJapan]

I think it might have some kind of pay more on bonus months: I'll look it up!

[allThatMoney]

Thanks for the quick replies!

So basically you gain some considerable tax savings but you risk not being able to access your money in case you ever really need to before 60. Maybe I'm too pessimistic, but I'm just worried that I get terminal cancer or something out of nowhere, and then I cannot enjoy the last bit of my life as much as I'd like if I cannot access my retirement funds.

[RetireJapan]

My take on this: chance of life-ending outcome before 60 pretty slim. Chance that having access to my iDeCo savings would make any difference even in the case of life-ending outcome even slimmer.

So the tax savings make huge sense to me. I don't recommend only using iDeCo, definitely make sure you have emergency fund and also invest in NISA/taxable accounts too