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.
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