Japan Today

Retiring in Japan: What’s the best strategy?

By Ben Tanaka

More and more of us have come to Japan and are choosing to stay. In the summer of 2000, I arrived here expecting to do two years on the Japan Exchange and Teaching (JET) Program, then go onto bigger and better things. More than 20 years later, I am still living in Sendai, just down the road from my first apartment. Oops, it looks like I’m a lifer.

Suppose you do end up staying in Japan (and even if you don’t), “old you” will thank yourself for getting your finances in order as soon as possible. This is not difficult, but it is hard. Kind of like exercising and keeping yourself healthy—it’s more about habits than knowledge.

I meet many people who say something like, “I haven’t made plans to retire, so I will just work until I die,” which is fine until you realize that you may not be willing or able to do that. There aren’t many jobs for 70-year olds, and you might end up living several decades past that.

Why not save and invest just in case, then? If you choose to keep working, you can do so from a position of strength and do it because you want to and not because you have to.

The basic strategy


In Japan, traditional retirement is funded by an employee’s contributions (and employer matching) to nenkin, the national government pension system, or literally “year money,” possibly a retirement bonus as well as any personal savings and investments.

A government panel issued a report in 2019 stating that the average married couple would need ¥20 million in savings to supplement their nenkin in retirement. 

Saving up ¥20 million is a formidable task. Fortunately, we can invest the money to speed things up a little—and Japan has several tax-advantaged accounts to help people invest for retirement.

Click here to read more.

© GaijinPot

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Saving up ¥20 million is a formidable task.

I don't think that's a formidable task at all..I mean you have many years to do that before you hit retirement age.

Just wonder what others think

1 ( +5 / -4 )

NISA and Ideco are great tax-free, hassle free products. The problem are the tax rules for foreigners. Even many of the specialists don't know. The company in Canada that issued my synthetic ETFs doesn't have a clue whether non-residents are allowed to own them, and so I must rely on hearsay on internet forums.

In addition, Canadian brokerages dont issue tax slips until late March onward, which means it's effectively impossible for me to report my investment income to Japanese authorities, whose reporting deadline is a ridiculously early March 15. My brokerage also put a buying block on my account a few years back for committing the heinous act of residing in Japan. No other mainstream brokerages accept me as a client.

The fact is, overall it's getting harder and harder - sometimes impossible - for us who want to invest for retirement. Global finance and globalization serve the massive powerful banks and super wealthy. The globalization trend It's aimed at punishing us regular folks with the recent tax, investment and other financial laws. Beware, it's a dangerous game. The smaller you are, the more the authorities will want to hurt you.

-1 ( +2 / -3 )

Article is about investing, not much about retiring, maybe he will do a part two about where how to live etc ideas on those aspects & others

4 ( +4 / -0 )

The link to the blog doesn't work.

The "you need 20 million yen extra" Japanese report was highly flawed and in reality most people will need much larger savings to achieve the spending assumptions in the report. It assumes more and higher shakai hoken contributions that most people have paid.

Rather than needing more savings for the spending levels in the report, I suspect more people will simply have to be more frugal when they are old.

3 ( +3 / -0 )

Until mid 90s, one breadwinner in the family of 4 was enough to survive in a good way. Now all of them have to work if they're all over 16 and with child benefits if under.

The retirement was at around 60 at that time. Now eveything has changed and retirement age has pushed to age 80.

But if you have 30,000,000 yen worth of savings, you can retire right away.

-3 ( +1 / -4 )

Invest in crypto, that's what I have been doing anyway - made 3x on BTC and currently almost 2x up on ETH. There's another 6-8 months to go on this current bull cycle before we enter another bear market (for a couple years probably) but its these bull markets where you can literally make 10x on your investment.

Or you can just stick in a bank and watch it depreciate due to inflation.

-10 ( +2 / -12 )

20 million savings may be not enough.

According to 2019 data, the average monthly pension in Japan is 15man yen (150,000 yen, about 1350 USD).


Really a low monthly pension, also considering the costs of Japanese expenses (food, medical service, electricity/gas/water/phone….).

In the future, the pensions are expected to decrease, due to the aging of the Japanese population, low birthrate, low immigration from outside.

From 2040, the Japanese pension system may be near to collapse. According to the data and the trends, in 1980 there were about 7 workers (persons in their working age) supporting with their taxes the monthly pension of 1 Japanese. In 2018 it became 2 workers supporting 1 Japanese retired. In 2040, 1 worker will support 2 retired, therefore the Japanese system will enter a dangerous state. Consequently, the monthly pension will probably become lower in the future.


Therefore, 20 million savings will be probably not enough. Moreover, 20 million savings may be impossible for many families with children, considering the very high expenses for educations in this country.

13 ( +13 / -0 )

Move to Okinawa, where the COL is more manageable.

3 ( +4 / -1 )

The real point is: Who wants to retire in Japan? Seriously, in few decades this island will become a big nursing home full of elderly, it is constantly lashed by earthquakes and typhoons, extremely expensive for everything........way better to retire in a more affordable country.

Generally speaking, you can endure the inconveniences related to earthquakes and typhoons while you are strong and young. You can live in this materialist and highly expensive country when you have a salary, surely higher than the pension. What about when you are old, weak, and with a low pension?

17 ( +19 / -2 )


Standard living? Where? In the town? City? Tokyo? Well, If you can adjust countrylife style even in developing countries, it's luxurious.

1 ( +1 / -0 )

Retiring in Japan is a snap if:

A. You have no mortgage or other credit expenses...and you own your own place.

B. You and a spouse are the only dependents.

C. You take in about ¥300,000 from pensions or other sources every month guaranteed.

D. You have about ¥25,000,000 in cash to play with.

Very easy to retire here.

E. Don't own a car...in my opinion. Life is so easy with trains here and if you need a car, just rent one for the specific purpose.

-3 ( +2 / -5 )

apparently their are alot of anti crypto people here...

-1 ( +2 / -3 )

Remember reading an article long time ago about how much money one would need to have to lead a comfortable life and it was around $870,000.

But again everyone has different objectives, expectations and more importantly lifespans.

Unless I sell off my condo and retire to the countryside, don’t that 20 million will be anywhere close enough.....

0 ( +1 / -1 )

Or you could be born into the family of a famous baker and have an exceedingly good trust fund set up for you... :)

3 ( +3 / -0 )

20 million yen seems pretty little to me. Can you really live on that in retirement?

1 ( +2 / -1 )

Or you could be born into the family of a famous baker and have an exceedingly good trust fund set up for you... :)

None of the bakers I know have trust fund for their kids.

Maybe these guys are baking the wrong stuff!!!

1 ( +1 / -0 )

20 million is just a hopeful guess at the shortfall for a couple with lots of pension contributions, i.e., how much extra one hypothetical model case would need. It got headlines for being "a lot" but most people will probably need more. 70% of people earn below Japan's average income, so their pension pots will be below an average model case.

The saviour for quite a few will be inheritances. There are 36 million over 65s and that age group is Japan's wealthiest. 19 million of them are already over 75.

0 ( +0 / -0 )

Or you could be born into the family of a famous baker and have an exceedingly good trust fund set up for you... :)

French Fancy That

0 ( +0 / -0 )

The 20 mill yen figure is based covering the shortfall for a couple getting 240,000 a month in pensions but spending 280,000+ just to have a simple retirement. Forget any overseas travel. These calculations were based on current life expectancy so in future, 20 mill certainly won’t cut it.

I am happily retired but wouldn’t be that way if I only got 240,000 monthly with 20 mill cash. Your choice: Save more or be miserable.

0 ( +0 / -0 )

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