RetireJapan

Hi everyone,

Of all my retirement plans, the Japanese pension is probably the one I am the least familiar with. Even after looking at the official site and estimator, I am still not sure about the following point:

Contributions to the pension are proportionate to your income. But is it also the case for your allowance, i.e. what you receive once you retire? In other words, the more you pay, the more you are supposed to receive, correct?

I am absolutely not taking the Japanese pension into account for my retirement plans (I see it as an added security bonus), but still this question has been bothering me for a while.

Thanks for any clarifications!

I believe so, but I am not sure of the formula. Kokumin nenkin is fixed, and kosei nenkin is paid on top of it. You can see your forecast online.

However, it seems to have diminishing returns. My pension contributions are 36,000 yen a month, and they are matched by my employer. This is almost five times the standard kokumin nenkin payment, but my projections are 'only' about three times as much as kokumin nenkin.

I will look into this. Might make a good blog post!

Anyone else?

So the back of a napkin rough calculations are
20000 yen per year of kokumin nenkin, so 800,000 is if you have 40 full payments, then anything else in the middle.

For kosei nenkin it -seems- to be 5,500 yen annual pension payment for every million yen you earn in any year. (Yes, that's 0.55%).

So, rough figures if you earn an average of 5mm yen and stay here for 15 years you'll have

5,500 x 5 x 15 = 412,500 kosei plus 15 x 20,000 = 300,000 kokumin = 712,500 per year or just under 60,000 a month.

Disclaimer - these are really high level figures so i wouldn't go changing any plans a a result, but it can be useful to make quick approximation.

If anyone has a better calculation method please share

Omg, that's eye-opening. I knew that having your own savings on top of the normal pension is kind of important, but I didn't know that you would be completely screwed without.

What happens to people with a pension that small and who don't have a lot of savings and maybe don't own a house? Is there any kind of social safety net to lift you to a level where you won't starve to death and be homeless?

allThatMoney wrote: ↑Wed Jul 11, 2018 9:28 am What happens to people with a pension that small and who don't have a lot of savings and maybe don't own a house? Is there any kind of social safety net to lift you to a level where you won't starve to death and be homeless?

Japan does have 生活保護 (social welfare assistance), but it is not generous, can have restrictive conditions put on it, and technically foreign residents are not entitled to it (although most local authorities choose to pay out anyway, at least at the moment).

Much better to make your own provision. I think many retired people work to supplement their pensions (car part attendants and taxi drivers are visible examples of this).