Newbie Question

[CiceroMan]

Hi everyone.
This is the formula for Japan pension I saw at https://www.nenkin.go.jp/international/ ... nsion.html
Yen816,000* x ( (1) + (2) + (3) + (4) + (5) ) / 40 years ** × 12 months
If this is the correct formula, then someone who has worked ten years would receive the annual pension of 2,448,000 yen.

1. Does this look correct (plausible?)
2. Doesn't it also take into account salary?

So, let's say average salary is 5 million yen annually, does that annual pension of 2,448,000 yen look about right?

--Thanks

[TunaSki]

Hi everyone.
This is the formula for Japan pension I saw at https://www.nenkin.go.jp/international/ ... nsion.html
Yen816,000* x ( (1) + (2) + (3) + (4) + (5) ) / 40 years ** × 12 months
If this is the correct formula, then someone who has worked ten years would receive the annual pension of 2,448,000 yen.

1. Does this look correct (plausible?)
2. Doesn't it also take into account salary?

So, let's say average salary is 5 million yen annually, does that annual pension of 2,448,000 yen look about right?

--Thanks

No. This is just for national pension part. So for 10 years contributions (without any partial or full exemptions) to national pension you’d get ¥816,600 x 120 / 480 which is about ¥204,150 per year (about ¥17,012 per month)

But if you’re earning a salary of ¥5 million then you’re probably an employee enrolled in Shakai Hoken, so you’re also contributing to employee pension insurance too. But that employee pension insurance part is more complex to calculate.


You should check Nenkin Net to run the figure in there for a forecast with your national pension and employee pension combined https://www.nenkin.go.jp/n_net/

[captainspoke]

That ¥816,000 is the max yearly payout for someone who has made the full 40yrs of contributions. So on a monthly basis the max possible is ¥68,000 (even tho it's paid every other month, so you get two months' worth at a time). And once that gets going, 介護保険 will be subtracted as an auto deduction.

That's not much, so plan accordingly. Tho quite a few are left with only that 国民年金, many regular workers also have an added pension via the 厚生年金 system--which is not included/detailed on the page that you linked to.

[CiceroMan]

Tunasky thanks so much for this explanation. I figured it couldn't be that much, but was hopeful because my original calculation result was similar to 10 years working in USA and the amount I will receive from social security.

Really appreciate your time in responding.

Hi everyone.
This is the formula for Japan pension I saw at https://www.nenkin.go.jp/international/ ... nsion.html
Yen816,000* x ( (1) + (2) + (3) + (4) + (5) ) / 40 years ** × 12 months
If this is the correct formula, then someone who has worked ten years would receive the annual pension of 2,448,000 yen.

1. Does this look correct (plausible?)
2. Doesn't it also take into account salary?

So, let's say average salary is 5 million yen annually, does that annual pension of 2,448,000 yen look about right?

--Thanks

No. This is just for national pension part. So for 10 years contributions (without any partial or full exemptions) to national pension you’d get ¥816,600 x 120 / 480 which is about ¥204,150 per year (about ¥17,012 per month)

But if you’re earning a salary of ¥5 million then you’re probably an employee enrolled in Shakai Hoken, so you’re also contributing to employee pension insurance too. But that employee pension insurance part is more complex to calculate.


You should check Nenkin Net to run the figure in there for a forecast with your national pension and employee pension combined https://www.nenkin.go.jp/n_net/

[CiceroMan]

Captainspoke,
this is very helpful info. Thanks for you time responding. It helps me make the right decisions.

That ¥816,000 is the max yearly payout for someone who has made the full 40yrs of contributions. So on a monthly basis the max possible is ¥68,000 (even tho it's paid every other month, so you get two months' worth at a time). And once that gets going, 介護保険 will be subtracted as an auto deduction.

That's not much, so plan accordingly. Tho quite a few are left with only that 国民年金, many regular workers also have an added pension via the 厚生年金 system--which is not included/detailed on the page that you linked to.

[Tkydon]

https://www.nenkin.go.jp/international/ ... nsion.html

This page refers to the Basic Japanese Pension if you are not employed, student, self-employed, etc..

If you are employed, you are covered by the National Employees' Pension Insurance - Kousei Nenkin

https://www.nenkin.go.jp/international/ ... loyee.html

Employer would pay 50% of the contributions...

See the Benefits Section.


or there are separate systems for Public Educators & Government Employees, Private Educators or Seamen...

And, then on top of that you may be covered by additional Pension systems.

Depending on which of the above you are covered by, will also determine contributions and benefits, and the extent to which you could contribute to iDeCo...

[TunaSki]

https://www.nenkin.go.jp/international/ ... nsion.html

This page refers to the Basic Japanese Pension if you are not employed, student, self-employed, etc..

If you are employed, you are covered by the National Employees' Pension Insurance - Kousei Nenkin

https://www.nenkin.go.jp/international/ ... loyee.html

Employer would pay 50% of the contributions...

See the Benefits Section.


or there are separate systems for Public Educators, Private Educators or Seamen...

And, then on top of that you may be covered by additional Pension systems.

Depending on which of the above you are covered by, will also determine contributions and benefits, and the extent to which you could contribute to iDeCo...

People enrolled in employee pension insurance are also covered by the basic Japanese pension too. The premiums you pay for employee pension insurance every month include national pension too.

It’s just national pension annuity and employee pension annuities are calculated in different ways

[Tkydon]

https://www.nenkin.go.jp/international/ ... nsion.html

This page refers to the Basic Japanese Pension if you are not employed, student, self-employed, etc..

If you are employed, you are covered by the National Employees' Pension Insurance - Kousei Nenkin

https://www.nenkin.go.jp/international/ ... loyee.html

Employer would pay 50% of the contributions...

See the Benefits Section.


or there are separate systems for Public Educators, Private Educators or Seamen...

And, then on top of that you may be covered by additional Pension systems.

Depending on which of the above you are covered by, will also determine contributions and benefits, and the extent to which you could contribute to iDeCo...

People enrolled in employee pension insurance are also covered by the basic Japanese pension too. The premiums you pay for employee pension insurance every month include national pension too.

It’s just national pension annuity and employee pension annuities are calculated in different ways

The minimum Pension Contribution under the National Employees' Pension Insurance is (nearly) the same as and includes the Basic Pension Contribution, spit 50/50 between the employer and the employee... (Y16,104 vs Y16,920 in 2024)

https://www.nenkin.go.jp/service/kounen ... yogaku.pdf
https://www.nenkin.go.jp/service/kounen ... 00825.html

The income related portion of the pension is then included in the Kosei Nenkin Benefit Calculation

https://www.nenkin.go.jp/international/ ... loyee.html

[TunaSki]

https://www.nenkin.go.jp/international/ ... nsion.html

This page refers to the Basic Japanese Pension if you are not employed, student, self-employed, etc..

If you are employed, you are covered by the National Employees' Pension Insurance - Kousei Nenkin

https://www.nenkin.go.jp/international/ ... loyee.html

Employer would pay 50% of the contributions...

See the Benefits Section.


or there are separate systems for Public Educators, Private Educators or Seamen...

And, then on top of that you may be covered by additional Pension systems.

Depending on which of the above you are covered by, will also determine contributions and benefits, and the extent to which you could contribute to iDeCo...

People enrolled in employee pension insurance are also covered by the basic Japanese pension too. The premiums you pay for employee pension insurance every month include national pension too.

It’s just national pension annuity and employee pension annuities are calculated in different ways

Yes, The minimum Pension Contribution under the National Employees' Pension Insurance is (nearly) the same as and includes the Basic Pension Contribution, spit 50/50 between the employer and the employee... (Y16,104 vs Y16,920 in 2024)

https://www.nenkin.go.jp/service/kounen ... yogaku.pdf
https://www.nenkin.go.jp/service/kounen ... 00825.html

The income related portion of the pension is then included in the Kosei Nenkin Benefit Calculation

https://www.nenkin.go.jp/international/ ... loyee.html

Yea, so to calculate the annuity (what you get in retirement) for both national pension and employee separately and then add them together. Because every month you pay employee pension you’re paying national pension at the same

So in their case if they only ever contributed 120 months to employee pension with an average salary of around ¥5 million then their pension annuity based on current calculations in retirement would be:


National pension = ¥204,150 per year (¥17,012 per month)

Employee pension = about ¥289,000 per year (about ¥24,000 per month)

national pension + employee pension = about ¥493,000 per year (about ¥41,000 per month)

Which is still pretty low. But then they would have only contributed 120 months.

[Tkydon]

bYea, so to calculate the annuity (what you get in retirement) for both national pension and employee separately and then add them together. Because every month you pay employee pension you’re paying national pension at the same

So in their case if they only ever contributed 120 months to employee pension with an average salary of around ¥5 million then their pension annuity based on current calculations in retirement would be:


National pension = ¥204,150 per year (¥17,012 per month)

Employee pension = about ¥289,000 per year (about ¥24,000 per month)

national pension + employee pension = about ¥493,000 per year (about ¥41,000 per month)

Which is still pretty low. But then they would have only contributed 120 months.

No.

You can log in to NenkinNet to get a projection of their pension based on current contributions to age 60.

If they have not accumulated 480 months by age 60, they can opt to pay Voluntary Contributions up to age 65 to get the accumulated months another 60 months closer to the 480 months.

No-one should be relying on this alone, even if they plan to have their mortgage paid off by age 65.

Kosei Nenkin contributions are 9.15% of Gross Salary before Tax. (Half of 18.3% Gross Salary before Tax, matched by the employer.)

Everyone should aim to save and invest in excess of 15% of Gross Salary before Tax (or even 20%), for their entire working life, and utilize Tax Advantaged investment methods as much as possible in order to maximizing savings by minimizing taxes, to provide a comfortable life for themselves in retirement...