RetireJapan

Hey! I wanted to see if people have thoughts on some questions I have. Whether you know the answers to the questions or know who I should reach out to, any help is appreciated!

I work for an American non-profit in Tokyo, on a team with 10 other Americans. We’ve been in Japan for 2 years so far. I’m wanting to find out information for all of us.

Our organization sent us to Japan on 4 year contracts but some have intentions of re-committing and staying in Japan longer. I see on the US social security website that 5 years is the point of focus on whether you pay to Japan or US. Below are some questions I’m trying to get answered.

Are we required to pay into the Japanese National Pension?

If not, do we have to show certificate of coverage from America?

What if we are sent to Japan for 4 years and then decide to stay longer than originally planned?

If we start paying Japanese National Pension now, will we be back-charged for not paying the last couple of years?

What if I know I’m going be in Japan for a long time but I’d prefer to continue to pay US social security instead of Japanese National Pension, can I leave for 6 months every 5 years?

According to the totalization agreement, if I’ve already reached 40 credits in America but only pay into Japan’s National Pension for say 6 years, can I have my American credits counted towards Japan’s Social Security to reach the 10 year Japan minimum vesting length? Can I get benefits from both countries when I retire?

If I opt out of social security in America does that affect Japanese National Pension?

Kevin

I think Ben is very knowledgeable about the rules for Japanese national pension. You may also benefit from this explanation of the totalization agreement between the US and Japan:

https://www.ssa.gov/international/Agree ... japan.html

As I read that document, the agreement allows us to avoid double taxation and qualify based on time in the two systems, but it doesn't increase the payments received because those payments are based on how much we've actually paid into the pension systems (and there is an extra penalty from the WEP that will apply to your US SS benefits).

My general comment in comparing the systems is that the US social security system results in much higher payments to you than does Japan even though the maximum employee contributions are pretty close (both right around the equivalent of $8000/year in employee contributions). There also appear to be more ways the Japanese system penalizes work during the collection period. As an example, the maximum US benefit for someone who starts claiming in 2020 at age 70 is $45,480. I don't see any numbers reported here in Japan that come close to that for the government portion of the pension. To the extent possible you would rather fall under the US system.