Argentum Pension calculator.

[Bubblegun]

Hi,
Sorry if this post is already answered in other places but i haven't been able to find anything to help me, and I am having lot of doubts now.

Situation.

I just went looking to see if there was a Japanese pension calculator online. And I came across Argentum Wealth Management. I plugged in a few numbers and I have to admit it worried/scared the bejesus out of me. After plugging in a few numbers it is littery telling me that I would have to save nearly 180,000+ yen a month into a pension fund to be get anything close to "surviving".

The math.
We have an IDECO and NISA so I thought I'd plug in an annual income of 2,000,000 yen
We have already saved up 20 million so far, and we have another 7 or 8 years to go and we plugged in 5% growth.
We pay as much as we can but with a couple of kids putting in 60,000 is a struggle but we do it.
We put 30,000 into the IDECO/NISA, and we put the other 30,000 into a post office scheme that will guarantee a payout of 8 million,even if the market tanks.(according the better half). So I thought OK thats a bit balanced. ( Sometimes we do things to please the better half if we wish to remain married LOL) On top of that we pay into the Japanese pension system and I pay into the UK pension system too.

After looking at that Argentums calculator,(and saving like crazy for years) I am beginning to think was it worth it after giving up on things and focusing on paying my future self. Its litterally feels like giving up todays fun things, to actually still be in the same boat at 63, 64, and still not have any fun things, and still be busting my bahookie.

Any advice.

[adamu]

Using the 4% rule, if you want an annual income from investments of ¥2M, you need ¥50M of savings.

Going with your numbers of ¥20M, assuming you will also get the ¥8M from the post office, that gives a target of ¥42M. Keeping your 5% interest rate assumption, according to https://www.investor.gov/financial-tool ... calculator you'd need to save ~¥110,000/mo to reach that goal in 8 years (note that this assumes you will invest the ¥8M when it pays out. Otherwise you need to save the full ¥50M, which requires ¥180k/mo at 5%)

If you got 7% interest instead, you'd only need to save ¥62k/mo (still over twice your current rate), but if you got 10%, you'll hit the target without saving any more money.

I am beginning to think was it worth it after giving up on things and focusing on paying my future self. Its litterally feels like giving up todays fun things, to actually still be in the same boat at 63, 64, and still not have any fun things, and still be busting my bahookie.

Any advice.

I think you have four choices:

1. Save more now to be more likely to achieve the goal.
2. Lower the target, accepting a lower income later.
3. Keep going as-is and hope for 10%+ returns...
4. Try to increase your income to allow you to save more without spending less.

[Deep Blue]

5. Work for a longer period and retire later.
6. Bolster your passive retirement income with part time work

[RetireJapan]

After plugging in a few numbers it is littery telling me that I would have to save nearly 180,000+ yen a month into a pension fund to be get anything close to "surviving".

The math.
We have an IDECO and NISA so I thought I'd plug in an annual income of 2,000,000 yen
We have already saved up 20 million so far, and we have another 7 or 8 years to go and we plugged in 5% growth.
We pay as much as we can but with a couple of kids putting in 60,000 is a struggle but we do it.
We put 30,000 into the IDECO/NISA, and we put the other 30,000 into a post office scheme that will guarantee a payout of 8 million,even if the market tanks.(according the better half). So I thought OK thats a bit balanced. ( Sometimes we do things to please the better half if we wish to remain married LOL) On top of that we pay into the Japanese pension system and I pay into the UK pension system too.

I find the best way to look at this is to figure out how much you want in retirement (a), then calculate how much you will get from nenkin and other pensions (b), then figure out the shortfall (a - b = c).

If you have 25x c invested you should be more or less okay for 30 years (very rough estimate).

If 25x c is impossible, you then have to try some of the other things suggested above (work longer, do part-time work after retiring, spend less, etc.).

Burying your head in the sand and ignoring the situation is going to make it much worse later on, so I don't recommend doing that

[Bubblegun]

After plugging in a few numbers it is littery telling me that I would have to save nearly 180,000+ yen a month into a pension fund to be get anything close to "surviving".

The math.
We have an IDECO and NISA so I thought I'd plug in an annual income of 2,000,000 yen
We have already saved up 20 million so far, and we have another 7 or 8 years to go and we plugged in 5% growth.
We pay as much as we can but with a couple of kids putting in 60,000 is a struggle but we do it.
We put 30,000 into the IDECO/NISA, and we put the other 30,000 into a post office scheme that will guarantee a payout of 8 million,even if the market tanks.(according the better half). So I thought OK thats a bit balanced. ( Sometimes we do things to please the better half if we wish to remain married LOL) On top of that we pay into the Japanese pension system and I pay into the UK pension system too.

I

Burying your head in the sand and ignoring the situation is going to make it much worse later on, so I don't recommend doing that

Fortunately or unfortunately that is something I have not done. I know a lot of people sleepwalking into a life of difficulty, but it was not something I have done.

I find the best way to look at this is to figure out how much you want in retirement (a), then calculate how much you will get from nenkin and other pensions (b), then figure out the shortfall (a - b = c).

I guess when I take into account the U.K pension, Japanese pension, work pension, plus the savings it won't be too bad. I have always intended to do some light work.

NISA is ticking along and should be ok for a draw down of 4%, Maybe 5% but am happy to do a dynamic drawdown. I have no intentions of buying boats camper vans, or travelling the world.

U.K pension should give us atleast 2,million a year.
U.K company pension will be about 570,000.yen a year extra.
Income from the U.K 1,500,000 yen a year.
I will have a small Japanese pension with about 20 years worth of contributions.Along with the silly low priced Fuka nankin.
Nisa. That's the one that keeps me up at night. There is no way in this world I expect it to grow at 10% per annum. And due to the historical miselling I experienced I work on 4%. I always remember those ridiculous salesmen giving me those three return rates and they were always wrong. But that is another story.

I guess, maybe i am panicking, maybe midlife crisis.LOL. Or maybe,I'm a tad tired of not doing something I want to enjoy or feeling guilty for spending something 100,000 on something. If I have that sense now, How the heck will i be able to switch that off, and say, bugger it? let's do that short trip? Let's go to that concert.

Using the 4% rule, if you want an annual income from investments of ¥2M, you need ¥50M of savings.

Going with your numbers of ¥20M, assuming you will also get the ¥8M from the post office, that gives a target of ¥42M. Keeping your 5% interest rate assumption, according to https://www.investor.gov/financial-tool ... calculator you'd need to save ~¥110,000/mo to reach that goal in 8 years (note that this assumes you will invest the ¥8M when it pays out. Otherwise you need to save the full ¥50M, which requires ¥180k/mo at 5%)

If you got 7% interest instead, you'd only need to save ¥62k/mo (still over twice your current rate), but if you got 10%, you'll hit the target without saving any more money.

I think you have four choices:

1. Save more now to be more likely to achieve the goal.
2. Lower the target, accepting a lower income later.
3. Keep going as-is and hope for 10%+ returns...
4. Try to increase your income to allow you to save more without spending less.

Thanks Adam for your reply.
I am under NO delusions of ever getting 10% return each year. I am extremely sceptical about 7% returns. So I generally prefer to stick to 4 or 5% returns.

The 8 million will almost certainly be invested into the NISA.

I guess as an expat/immigrant my costs and thoughts are anchored in pounds/dollars, and seeing yen, just doesn't give me that fixed financial reference point. Especially when in Japan we still have to pay for health care.
I guess how little is too little?

10 years might seem far away to some, but for us, planning to retire in Japan, it will go by faster than a bullet train, and before you know it, we're pulling into the station. So I guess with 10 years till full retirement, I want to slow down a bit. Ease off the accelerator a bit and do something.

5. Work for a longer period and retire later.
6. Bolster your passive retirement income with part-time work

Thanks, Deep Blue.

Maybe a semi retirement is what I'm after.

[adamu]

How the heck will i be able to switch that off, and say, bugger it? let's do that short trip? Let's go to that concert.

To be annoyingly exhaustive...

So there's two issues there: one is the psychological problem people who are used to saving experience when it comes to actually spending their savings. The other is finding the balance between living the lifestyle you want now and supporting the lifestyle you want for yourself for the future.

For the former, you can solve that by reassuring yourself that you have enough savings to cover your lifestyle and now it's time to put all the effort to good use.

For the latter, if you can't do the things you want to do now *and* save for the things you want to do in the future, the options are to spend less now, spend less in the future, or make more money.

[gaijin86]

Keep in mind that these "financial advisors" try to make you invest as much as possible and they show unrealistedly high return rates. I recall one "advisor" doing a simulation for me years ago, with average of 11% return per year (if I gave them all my money to "invest"). It became clear they pulled that figure of 11% out of nowhere.

[beanhead]

You probably need to have a think about what your spending in retirement will be.
Hopefully you won't have child raising/education costs, mortgage costs, so life will usually be cheaper than when you are working and raising a family.

The other thing which may be missing here is education costs for the children, depending on their ages. Don't underestimate this.
Much cheaper in Japan than in the UK, for sure, but it is a cost that you should plan for (if you haven't done so already).

Can you raise your income in the next 7 or 8 years and therefore increase the amount you invest? Part-time work for Mrs Bubble, if she is not already working? Even a little extra income could go a long way towards making the future a bit easier.

Your situation is not dire. The pensions will bring you 4 million yen or more a year, which is a great base to have. It is just how much extra you will have to lead the life you really want. As others have said, working a bit longer may help to get you there.

[Beaglehound]

It's not clear to me exactly how much pension income you are on course for, all things being equal, but as Beanhead says, your position does not seem dire when savings are added.

One thing to consider, in fact something I have been considering lately, is how the pension income is split between you and your missus, are any pensions heritable or do they disappear along with the recipient? It sounds like you have three pensions on the go, but is your wife as well provided for?