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What do you think will happen in the next 20 - 30 years? (Pension, Retirement Homes, etc)
Posted: Mon May 22, 2023 2:57 pm
by JimNasium
Sorry, this is going to be pretty rambly.
I’m curious what you guys think will happen within the next 20 - 30 years in Japan. I’m a fairly optimistic person overall, but I can’t help but wonder what Japan will be like in the future. With the continuing aging population I feel like there are going to have to be some changes. Will they reduce pensions? Raise the age of retirement? Or do you think things will just continue on like they are now?
And what about homes for the elderly? Will there be a boom in retirement home buildings? Or will there be a continuing shortage of available homes? Will prices for homes skyrocket? Do you think technology will be able to fill in a large gap that is needed (teledoctors, self driving cars, etc).
Is there anything else you guys are concerned about, or think will be a big issue?
Like many of you I’m lucky to have citizenship back home. So if things get really bad there’s always that backup plan. But I do love living here in Japan, so I hope it won’t come to that.
Re: What do you think will happen in the next 20 - 30 years? (Pension, Retirement Homes, etc)
Posted: Sat May 27, 2023 1:01 pm
by beanhead
No-one has any answers, it seems
The numbers of elderly people will clearly keep growing. Japanese people are generally healthy and healthcare is good here.
I assume that means that Japanese companies will keep innovating to offer more products and services for this elderly population. Hopefully, there will be some new options for retirement homes, in case we need them.
Other than that, who knows?
All you can do is to try and control the controllable things. Save and invest as much as you can, so that even if the state pension gets reduced, it doesn't impact you too much.
Re: What do you think will happen in the next 20 - 30 years? (Pension, Retirement Homes, etc)
Posted: Sun May 28, 2023 7:19 am
by RetireJapan
I just got back from visiting Europe. I am more confident about quality of life in Japan than I am in Europe.
Pensions -will likely be slightly reduced, but they are already low compared to other countries so I don't see big changes
Retirement age -almost certainly pushed back (as is happening everywhere)
Retirement homes -I am hoping to stay in my own home, and I am fairly confident advances in technology/telemedicine, etc. will make that easier (also autonomous vehicles, ie robotaxis will solve the mobility/driving issue for the elderly)
I think Japan has good natural resources (people talk about fossil fuels -not relevant for much longer, or imported calories -I think this could be turned around if necessary by reducing things like olive oil or animal feed imports and modernising Japanese farming ie through making larger farms or growing things via hydroponics, etc)
I was really impressed during and after the 3-11 earthquake in terms of infrastructure, society, and government response. I can't imagine the UK doing anywhere near as well, for example.
And I think old people here have a better environment than say the UK in terms of crime, how people treat the elderly, etc.
So I'm pretty positive about Japan, to the extent of planning to naturalise in the near future. Of course, the more money/resources you have the better your quality of life will be, so saving and investing are going to remain very important
I wouldn't want to try to live off nenkin alone, for example.
Re: What do you think will happen in the next 20 - 30 years? (Pension, Retirement Homes, etc)
Posted: Mon May 29, 2023 2:25 am
by Tokyo
@JimNasium. You have similar questions to those we had when we arrived here 35 years ago. And what happened? Kokumin nenkin didn’t decrease despite the millions of doubters (although Kosei nenkin payouts have been reducing), retirement ages did (slightly) change, but as we all know the real estate market has been all over the place from the bursting of the bubble being followed by years of continuous growth in inner Tokyo.
Perhaps the folly of trying to predict the future can be seen by the differences in current Japan versus the 1980s we arrived in. Back then there weren’t any ¥100 stores, Starbucks, far, far fewer konbini or Uniqlo stores (which did not sell its own clothing at all then) but there were still lots of discos, video rental shops and smoking was normal in offices, bars and restaurants. Shockingly, nobody had a cellphone and all but a handful of people had even heard of the internet.
Since then Japan has definitely declined relative to other advanced economies, but it most definitely remains our home of choice, despite much searching for alternatives, as our life here remains rewarding and largely unaffected by the slow decline.
If you are concerned about Japan’s future you can always hedge your bets by acquiring foreign property to enable you to move away if you need to. It’s always better to have more options, plus you get more non-yen income and potential capital appreciation (more complicated taxation issues aside).
As for the future, your task is not to foresee it, but to enable it.
— Antoine de Saint
Re: What do you think will happen in the next 20 - 30 years? (Pension, Retirement Homes, etc)
Posted: Mon May 29, 2023 4:21 am
by TokyoWart
I had a few conversations recently that made me a little less complacent about the future for Japan. My wife has been helping a friend at her restaurant which is located in one of the upscale business districts in Tokyo. The restaurant used to do a booming business at lunch with clients who worked at foreign financial firms (e.g. Goldman Sachs, Merrill Lynch, etc.) but she recently related to me that so many financial firms have left over the years that they have shrunk the restaurant business to a fraction of what it was. Much of that change started 10 or more years ago (with an extra bump when the exit tax became applicable to foreigners) but the weekend before this we missed attending the farewell party for a friend who works in compliance in investment banking who is being moved to Hong Kong as his company transfers functions out of Japan.
The other conversation was with a friend who is a lawyer and came out for the G7 summit for work related to both government and private clients. He noted that his firm has decided to strategically de-emphasize Japan because the weak currency, interest rate straightjacket the government finds itself in from the large outstanding government debt have made domestic companies less able to afford high priced legal services or engage in the international expansions which require those services.
Still a very pleasant place to live, the tourist industry is booming and salaries are lower here than Singapore and Hong Kong but that doesn't seem to have persuaded foreign companies to invest here as they used to.
Re: What do you think will happen in the next 20 - 30 years? (Pension, Retirement Homes, etc)
Posted: Mon May 29, 2023 5:41 am
by captainspoke
I guess there's a decent case for japan's decline, but another angle might emphasize that the world has flattened (Friedman's books), or that that has contributed to (or was a factor in) the 'decline'. The same might be said for other countries that held more sway previously.
The other east asian economies also have issues, perhaps even more worrisome demographic trends than japan. I'm not invoking any schadenfreude, but be careful about thinking it is only japan with problems, while assuming that in other places the graphs are always going up and to the right.
Re: What do you think will happen in the next 20 - 30 years? (Pension, Retirement Homes, etc)
Posted: Mon May 29, 2023 7:06 am
by TokyoWart
The other east asian economies also have issues, perhaps even more worrisome demographic trends than japan. I'm not invoking any schadenfreude, but be careful about thinking it is only japan with problems, while assuming that in other places the graphs are always going up and to the right.
I agree. I think I might partly be reacting to how much has changed in prospect from the Japan of 1990 when I had my first work experience here compared to today. Certainly feels more safe here politically and economically than in China and seems more physically safe --and more civil-- here than the USA.
Re: What do you think will happen in the next 20 - 30 years? (Pension, Retirement Homes, etc)
Posted: Mon May 29, 2023 10:15 am
by Wales4rugbyWC23
TokyoWart wrote: ↑Mon May 29, 2023 4:21 am
I had a few conversations recently that made me a little less complacent about the future for Japan. My wife has been helping a friend at her restaurant which is located in one of the upscale business districts in Tokyo. The restaurant used to do a booming business at lunch with clients who worked at foreign financial firms (e.g. Goldman Sachs, Merrill Lynch, etc.) but she recently related to me that so many financial firms have left over the years that they have shrunk the restaurant business to a fraction of what it was. Much of that change started 10 or more years ago (with an extra bump when the exit tax became applicable to foreigners) but the weekend before this we missed attending the farewell party for a friend who works in compliance in investment banking who is being moved to Hong Kong as his company transfers functions out of Japan.
The other conversation was with a friend who is a lawyer and came out for the G7 summit for work related to both government and private clients. He noted that his firm has decided to strategically de-emphasize Japan because the weak currency, interest rate straightjacket the government finds itself in from the large outstanding government debt have made domestic companies less able to afford high priced legal services or engage in the international expansions which require those services.
Still a very pleasant place to live, the tourist industry is booming and salaries are lower here than Singapore and Hong Kong but that doesn't seem to have persuaded foreign companies to invest here as they used to.
If I remember one of the reasons Merrill Lynch left was they were tired of oji chans coming in thinking it was yakiniku.
Re: What do you think will happen in the next 20 - 30 years? (Pension, Retirement Homes, etc)
Posted: Thu Jun 01, 2023 12:56 pm
by adamu
Was thinking about posting this in the New NISA thread, but it's a bit off topic so posting here instead.
Since I started learning about investing it was always taken as a given the US Treasuries were as sound an investment you could make, there was no chance of a default.
After the UK turning inwards since Brexit, and now the US seriously discussing whether to default on their responsibilities, I think we might see a redefinition of what a "developed country" means in the next few decades. Maybe we'll see a bunch of new indices produced by different people with completely new categories, for example.
Obviously I have no idea or what will happen, nor how that will affect life in Japan, but it does feel a bit like we are on the edge of a shift on the status quo of world powers, and basically all of the investment landscape seems to be grounded in that.
Re: What do you think will happen in the next 20 - 30 years? (Pension, Retirement Homes, etc)
Posted: Fri Jun 02, 2023 2:40 am
by eyeswideshut
adamu wrote: ↑Thu Jun 01, 2023 12:56 pm
Was thinking about posting this in the New NISA thread, but it's a bit off topic so posting here instead.
Since I started learning about investing it was always taken as a given the US Treasuries were as sound an investment you could make, there was no chance of a default.
After the UK turning inwards since Brexit, and now the US seriously discussing whether to default on their responsibilities, I think we might see a redefinition of what a "developed country" means in the next few decades. Maybe we'll see a bunch of new indices produced by different people with completely new categories, for example.
Obviously I have no idea or what will happen, nor how that will affect life in Japan, but it does feel a bit like we are on the edge of a shift on the status quo of world powers, and basically all of the investment landscape seems to be grounded in that.
There is no realistic alternative to the USD as the global reserve currency so I would still argue that USTs are about as safe an investment as you can get. That doesn't mean the USD will stay as strong as it is now and I would not be surprised if it decreased in value vis-a-vis the JPY in the coming years. Nonetheless I will always keep a large part of my cash in USD as I think it is safer than the JPY in the long run (I also keep GBP and CAD (and gold - don't call me a crank) for what it is worth).