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Is Japan's pension system headed for oblivion?

Is Japan's pension system headed for oblivion?

Old Jul 21, 2017, 7:21 am
  #1  
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Is Japan's pension system headed for oblivion?

Originally Posted by mjm
My understanding based on a discussion of how it works for Canadians here (I went to the Nenkin Jimusho with a Canadian colleague) is that with proof of having paid into the system in Canada and then finishing out your career in japan for example you would add the say, 15 years in Japan (not enough to meet the minimum 25 years paying into the system)
From next month, the minimum in Japan will be reduced from 25 years to 10. Some 640,000 people who weren't eligible under the old system will now become eligible for a small pension, even though the promised income tax rise to accommodate it has yet to materialise, putting further strain on this already creaking system.
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Old Jul 22, 2017, 7:43 pm
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Originally Posted by hailstorm
From next month, the minimum in Japan will be reduced from 25 years to 10. Some 640,000 people who weren't eligible under the old system will now become eligible for a small pension, even though the promised income tax rise to accommodate it has yet to materialise, putting further strain on this already creaking system.
Thank you for this update. I knew it was in the works but had not heard a date. Going to be a lot of very happy people for sure. This has been way overdue.
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Old Jul 22, 2017, 9:07 pm
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Originally Posted by mjm
Thank you for this update. I knew it was in the works but had not heard a date. Going to be a lot of very happy people for sure. This has been way overdue.
As I am well on my way to 25 years, and it's not clear how they're going to pay for all these new benefit receivers, I am not happy in the least.
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Old Jul 22, 2017, 10:19 pm
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Originally Posted by evergrn
With regards to salary, though, my understanding is that the pay for my field in Jpn is generally less than half of what it is in US.
I have never understood this view. Salary is important for where you live, not someplace you don't. I earn a great salary in Prague. I live extremely well. But my salary in the US would be terrible. Why is that US salary relevant when I live in Prague and earn kroner?
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Old Jul 22, 2017, 11:46 pm
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Originally Posted by hailstorm
As I am well on my way to 25 years, and it's not clear how they're going to pay for all these new benefit receivers, I am not happy in the least.
I am in that boat with you.

I think that whether this had passed or not debt was going to be the only answer.
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Old Jul 23, 2017, 12:27 am
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Originally Posted by mjm
I am in that boat with you.

I think that whether this had passed or not debt was going to be the only answer.
It was originally tied to the sales tax increasing from 8% to 10%.
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Old Jul 23, 2017, 7:02 am
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Originally Posted by hailstorm
It was originally tied to the sales tax increasing from 8% to 10%.
Yeah. Finance is not the gov't.'s string suit though. Stimulus for spending and then taxing works if people spend. So many savers out there these days.
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Old Jul 23, 2017, 5:31 pm
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Is Japan's pension system headed for oblivion?

Just a question here for old timers and new people alike ?

How many of you think we have within the next 15 - 20 years got a pension time bomb on our hands with the 国民年金 system?.

The governments repeated lack of effort to tackle de-population and bulging older generation ( and repeatedly not wanting to discuss the idea of immigration due to not wanting to piss off voters ) at least to me stinks of an almighty collapse sooner rather than later.

It kinda makes sense that young people don't want to pay in to a system where they are likely to not get out a decent pension when they're older or at least a LOT less than they paid in?

Wondering what other ex-pats thoughts were on this ?.

-mrploddy
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Old Jul 23, 2017, 7:52 pm
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Originally Posted by mrploddy
Just a question here for old timers and new people alike ?

How many of you think we have within the next 15 - 20 years got a pension time bomb on our hands with the 国民年金 system?.

The governments repeated lack of effort to tackle de-population and bulging older generation ( and repeatedly not wanting to discuss the idea of immigration due to not wanting to piss off voters ) at least to me stinks of an almighty collapse sooner rather than later.

It kinda makes sense that young people don't want to pay in to a system where they are likely to not get out a decent pension when they're older or at least a LOT less than they paid in?

Wondering what other ex-pats thoughts were on this ?.

-mrploddy

It will be fine. There are myriad ways to finance it or at least make it appear to be financed.

Plus given that after 25 years of paying in anywhere from 11,000 to 70,000 per month (upper end is based on end of career middle management salary) and then getting 160-220,000 per month back, it is not too bad a deal.
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Old Jul 26, 2017, 12:53 am
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Originally Posted by JamesBigglesworth
I have never understood this view. Salary is important for where you live, not someplace you don't. I earn a great salary in Prague. I live extremely well. But my salary in the US would be terrible. Why is that US salary relevant when I live in Prague and earn kroner?
What you're saying is true in some instances and only to an extent.
Cost of living is highly variable in Jpn. But if I were to live in a suburb of Tokyo, I would imagine it'd be roughly similar to Seattle (Tokyo = lower rent, lower dining, higher utility, higher grocery, etc). So you can't possibly have the same standard of life in Tokyo for <1/2 salary in Seattle. I've a friend in high-tech who moved back to the US from Tokyo a couple years ago, and he attests to this.

These days, Niseko Hilton is >80,000yen per night for a standard room during peak ski seasons. It's the reason why about the only leisure travelers who can afford to stay there during peak seasons these days are foreigners, even though the hotel is in Jpn.
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Old Jul 26, 2017, 1:02 am
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Originally Posted by hailstorm
From next month, the minimum in Japan will be reduced from 25 years to 10. Some 640,000 people who weren't eligible under the old system will now become eligible for a small pension, even though the promised income tax rise to accommodate it has yet to materialise, putting further strain on this already creaking system.
Well, this is good news for me.

Does anyone know the answer to this question?
- Let's say you have 15 yrs from US, 10 yrs from Jpn. You live in Jpn, so you start claiming nenkin in Jpn. Then down the road, you decide to move to the US. Can you then seamlessly transition from nenkin to Social Security from that point forward?
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Old Jul 26, 2017, 1:16 am
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Originally Posted by mjm
Plus given that after 25 years of paying in anywhere from 11,000 to 70,000 per month (upper end is based on end of career middle management salary) and then getting 160-220,000 per month back, it is not too bad a deal.
Where are you getting this figure? Anyways, that's still not much and one will most certainly need quite a bit of personal savings on top of that. The thing is, I'm not sure that many people (at least those in Tokyo) have the budget to be able to save much these days, asides from paying into pension.

The whole nenkin thing is extremely difficult to assess. I'm hearing mixed things. Some TV shows paint very bleak pictures, and I've read similarly pessimistic articles. My parents think everything will be fine (but then again they're now in their 70's).

I was actually interviewed randomly about this very topic a few days ago outside a train station in Tokyo. Sadly, I just kept saying I don't know. I'm certain they will not use my clip in their feature.
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Old Jul 26, 2017, 1:39 am
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Originally Posted by evergrn
Well, this is good news for me.

Does anyone know the answer to this question?
- Let's say you have 15 yrs from US, 10 yrs from Jpn. You live in Jpn, so you start claiming nenkin in Jpn. Then down the road, you decide to move to the US. Can you then seamlessly transition from nenkin to Social Security from that point forward?
What's the reason for doing this? Both Nenkin and Social Security can send payment overseas.
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Old Jul 26, 2017, 8:08 am
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Originally Posted by evergrn
Where are you getting this figure? Anyways, that's still not much and one will most certainly need quite a bit of personal savings on top of that. The thing is, I'm not sure that many people (at least those in Tokyo) have the budget to be able to save much these days, asides from paying into pension.

The whole nenkin thing is extremely difficult to assess. I'm hearing mixed things. Some TV shows paint very bleak pictures, and I've read similarly pessimistic articles. My parents think everything will be fine (but then again they're now in their 70's).

I was actually interviewed randomly about this very topic a few days ago outside a train station in Tokyo. Sadly, I just kept saying I don't know. I'm certain they will not use my clip in their feature.
Where did I get which figure?
The taxes? I pay them. 27 years of returns to look at.
The payout? The nenkinjimusho. I recommend English speakers go to the Shinbashi one if they want to interact in English. You get a black and white printout from them that shows paid in and to be paid out. It's all very easy to access and the people there are very good.

Saving money in central Tokyo is easy. Most Japanese have zero clue about personal finance though. I live very centrally, do not hold an expat job, and find if all very ridiculous how many of my similarly set up peers cannot figure it out.
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Old Jul 26, 2017, 8:13 am
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Originally Posted by hailstorm
What's the reason for doing this? Both Nenkin and Social Security can send payment overseas.
This.

Clsim both and have it sent where you wish. Personally I would hold local accounts in each country and spend such that exchange rates were always favorable.

NB: Canadians for sure and likely others can combine the years paid in for a larger total in either or.
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