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Stop paying nenkin for more Social Security(US)... Calling all GaijinPot Masters..

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  • Stop paying nenkin for more Social Security(US)... Calling all GaijinPot Masters..

    First some background: I am a 31 year old American with a J-wife, we have a one-year-old and another child on the way. I have paid about 10 years into SS in the US, two years of Shakai Hoken here and a year in the Kokumin Hoken /Nenkin system with my current part-time BOE job for which I plan on working for another three years. I will be taking the family back to the US in early 2015, permanently.At 34, I will have a good 30 years more to pay into Social Security. From what little I understand of the Totalization agreement between the US and Japan, if I try to collect my (small) pension from Japan upon retirement, my Social Security payments will be greatly diminished. To me, it seems like a bad move.

    I am assuming I should not try to collect my J-pension in order to receive full Social Security benefits.

    My questions are:

    1) Is the above incorrect in any way?

    2) Assuming the above is accurate, what happens if I stop paying my nenkin now?

    3) Should I stop paying nenkin now?

    4) I have paid about 540000Y into the nenkin system as of today and three more years means another 540000Y. To qualify for the "Cash-out-when-you-leave" option, must I pay until I leave the country?

    5) Does not paying nenkin affect my US taxes or Social Security in any way?

    Thank you dearly to anyone who responds as I am hopeless when it comes to these matters and the wife is worse than I.

  • Plats
    replied
    Originally posted by Since1990 View Post
    For me, although I was born and bred in New Zealand, I have never worked there and have only worked in Japan with 15 years of Nenkin payments under my belt, so to speak. I sometimes wonder if I'd be eligible for the pension in New Zealand should I ever decide to retire there (which I don't intend to).
    If New Zealand is similar to the US, then you might be able to be vested in the system, but your monthly payment would be zero. The key in the USA is that you would also be entitled to Medicare, worth more than many are getting in cash payments from SS.

    Leave a comment:


  • Plats
    replied
    Originally posted by Wonky View Post
    I called the US social security office today and this is what I was told. Totalization is designed for people who spend large portions of their careers in different countries, not long enough to be vested anywhere. To be vested in the US you need only ten years but to be FULLY vested and receive full benefits, you need 35 years of contributions. If you work more than 35 years they average out the 35 highest-income years.

    Personally, I already have well over 10 years in the US and over twenty to go before retirement, so the five years in Japan really wouldn't make much difference. Regarding the lump-sum from Japan, the person I spoke with recommended I "take the money and run."

    I did not ask about WEP and it did not come up--I am assuming it does not apply to me and the above quoted statement is correct.
    Totalization also is used to get benefits from another country if you are already vested in one.

    If "FULLY vested" means getting the maximum monthly payments, then you'll need 35 years of max. contributions, which this year would be based on an income of $110,000. If you do the math you'll find that spreading the 10 years of contributions over 35 years gives you a much higher return on your contributions due to the progressive nature of SS payments.

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  • Since1990
    replied
    For me, although I was born and bred in New Zealand, I have never worked there and have only worked in Japan with 15 years of Nenkin payments under my belt, so to speak. I sometimes wonder if I'd be eligible for the pension in New Zealand should I ever decide to retire there (which I don't intend to).

    Leave a comment:


  • Wonky
    replied
    Originally posted by Plats View Post
    1/95 means January 1995.

    WEP applies only if you are vested in both systems without needing totalization. That is, you have over 10 years in the US and 25 (soon, perhaps, to be 10) years in Japan.
    I called the US social security office today and this is what I was told. Totalization is designed for people who spend large portions of their careers in different countries, not long enough to be vested anywhere. To be vested in the US you need only ten years but to be FULLY vested and receive full benefits, you need 35 years of contributions. If you work more than 35 years they average out the 35 highest-income years.

    Personally, I already have well over 10 years in the US and over twenty to go before retirement, so the five years in Japan really wouldn't make much difference. Regarding the lump-sum from Japan, the person I spoke with recommended I "take the money and run."

    I did not ask about WEP and it did not come up--I am assuming it does not apply to me and the above quoted statement is correct.

    Leave a comment:


  • Plats
    replied
    Originally posted by TJrandom View Post
    Sorry, I don't know - but I believe that if you went to a SS office - and asked them to produce a benefits estimate - that they might be able to tell you. My understanding was that they simply used the (5) years contributed to Japan's Ninkin - and thus "upped" the number of years factor for your SS. (So your 10 years SS becomes 15 years). But I could be wrong on this.
    My take: They will up the number of US SS years if you don't have the required 10. On the other end, Japan will add your US 10 years to your 5 years, leaving you still 10 years short for a JPN pension. This may change soon after reform.

    Leave a comment:


  • Plats
    replied
    Originally posted by Wonky View Post
    Good discussion, I just got back to the US (I am assuming permanently) about a month ago and was looking over the paperwork from the Japan Pension Service. I was wondering about the "Totalization of Benefits" myself and whether or not I should take the lump sum. I worked in Japan and paid the nenkin for 5 years.

    http://www.nenkin.go.jp/main/individ...ai/english.pdf

    What does the above-quoted "1/95" mean?

    I've already worked the required 10 years in the US to collect SS in the future. Are they saying WEP only doesn't apply when you need to use what you paid into BOTH the US and Japan systems to qualify for the benefit?
    1/95 means January 1995.

    WEP applies only if you are vested in both systems without needing totalization. That is, you have over 10 years in the US and 25 (soon, perhaps, to be 10) years in Japan.

    Leave a comment:


  • Wonky
    replied
    Originally posted by TJrandom View Post
    Sorry, I don't know - but I believe that if you went to a SS office - and asked them to produce a benefits estimate - that they might be able to tell you. My understanding was that they simply used the (5) years contributed to Japan's Ninkin - and thus "upped" the number of years factor for your SS. (So your 10 years SS becomes 15 years). But I could be wrong on this.
    This is pretty much what my company's HR office said when I asked too...I will try and get more info and post it here.

    Leave a comment:


  • TJrandom
    replied
    Originally posted by Wonky View Post
    I see. I have vesting in the US but not Japan, and will be in the US for the foreseeable future. Do you know how the 5 years in Japan will affect my US SS if I opted for the totalization?
    Sorry, I don't know - but I believe that if you went to a SS office - and asked them to produce a benefits estimate - that they might be able to tell you. My understanding was that they simply used the (5) years contributed to Japan's Ninkin - and thus "upped" the number of years factor for your SS. (So your 10 years SS becomes 15 years). But I could be wrong on this.

    Leave a comment:


  • Wonky
    replied
    Originally posted by TJrandom View Post
    If I read the above posts correctly, and from what I had previously researched - my understanding is that WEP kicks in if you are qualified to obtain two pensions without needing the totalisation to do so.

    There are people (like me) - who are separately vested in two (US-SS and Japan Ninkin) - having worked the requisite number of years under each program. So WEP would affect me.

    If you already have US vesting - and you continue to contribute to Japan's Ninkin and thus become vested - after 25 years of contribution, you too would be affected by WEP. (I have also heard that Japan Ninkin vesting may be changed to just 10 years - so WEP might affect you sooner).
    I see. I have vesting in the US but not Japan, and will be in the US for the foreseeable future. Do you know how the 5 years in Japan will affect my US SS if I opted for the totalization?

    Leave a comment:


  • TJrandom
    replied
    Originally posted by Wonky View Post
    ... I've already worked the required 10 years in the US to collect SS in the future. Are they saying WEP only doesn't apply when you need to use what you paid into BOTH the US and Japan systems to qualify for the benefit?
    If I read the above posts correctly, and from what I had previously researched - my understanding is that WEP kicks in if you are qualified to obtain two pensions without needing the totalisation to do so.

    There are people (like me) - who are separately vested in two (US-SS and Japan Ninkin) - having worked the requisite number of years under each program. So WEP would affect me.

    If you already have US vesting - and you continue to contribute to Japan's Ninkin and thus become vested - after 25 years of contribution, you too would be affected by WEP. (I have also heard that Japan Ninkin vesting may be changed to just 10 years - so WEP might affect you sooner).

    Leave a comment:


  • Wonky
    replied
    Originally posted by Plats View Post
    These policies apply to all benefits payable for 1/95 or later. Benefits for months before 1/95 may be subject to WEP.
    Good discussion, I just got back to the US (I am assuming permanently) about a month ago and was looking over the paperwork from the Japan Pension Service. I was wondering about the "Totalization of Benefits" myself and whether or not I should take the lump sum. I worked in Japan and paid the nenkin for 5 years.

    http://www.nenkin.go.jp/main/individ...ai/english.pdf

    What does the above-quoted "1/95" mean?

    I've already worked the required 10 years in the US to collect SS in the future. Are they saying WEP only doesn't apply when you need to use what you paid into BOTH the US and Japan systems to qualify for the benefit?
    Last edited by Wonky; 2012-03-06, 09:41 AM.

    Leave a comment:


  • Guest's Avatar
    Guest replied
    Originally posted by Plats View Post
    Here is the relevent section from that SS website:

    "WEP will not apply where the number holder is:

    a) entitled to a U.S. totalization benefit based on coverage in both the U.S. and a totalization country coverage, or

    b) entitled to a regular U.S. benefit, as well as a foreign benefit which is based on a totalization agreement with the U.S., and not receiving any other pension based on non-covered work.

    These policies apply to all benefits payable for 1/95 or later. Benefits for months before 1/95 may be subject to WEP.

    A recomputation of the WEP PIA can be done when the claimant submits either an award notice or a letter from the foreign country paying the benefit showing that the benefit is based on the totalization agreement between that country and the U.S."

    So it seems that WEP would kick in only if you were entitled to the JNP pension without totalization, and not with it.

    Personally I would probably take the lump sum and be finished with it.
    Thanks for that Plats,

    Yeah I guess I will take both lump sums upon leaving, and with the maximum lump sum from kokumin nenkin, it seems I should just stop paying altogether. That, or convince my employer(BOE) to enroll me in Shakai hoken...

    Leave a comment:


  • Plats
    replied
    Originally posted by kumachi View Post
    For some reason I can't access ssa from my computer. I have always heard the the WEP would reduce benefits by 1/3 or more...
    Here is the relevent section from that SS website:

    "WEP will not apply where the number holder is:

    a) entitled to a U.S. totalization benefit based on coverage in both the U.S. and a totalization country coverage, or

    b) entitled to a regular U.S. benefit, as well as a foreign benefit which is based on a totalization agreement with the U.S., and not receiving any other pension based on non-covered work.

    These policies apply to all benefits payable for 1/95 or later. Benefits for months before 1/95 may be subject to WEP.

    A recomputation of the WEP PIA can be done when the claimant submits either an award notice or a letter from the foreign country paying the benefit showing that the benefit is based on the totalization agreement between that country and the U.S."

    So it seems that WEP would kick in only if you were entitled to the JNP pension without totalization, and not with it.

    Personally I would probably take the lump sum and be finished with it.

    Leave a comment:


  • Guest's Avatar
    Guest replied
    Originally posted by Plats View Post

    1) I used to think your US SS would be reduced by WEP (Windfall Elimination Provision) with totalization, but according to https://secure.ssa.gov/poms.nsf/lnx/0300605386, and a tread I was involved with at Hoofin.com, it will not. .
    For some reason I can't access ssa from my computer. I have always heard the the WEP would reduce benefits by 1/3 or more... The wife also called the nenkin office today and they said that Kokumin nenkin and kosei nenkin are completely separate entities and that the maximum I could get back form kokumin nenkin(in which I am currently enrolled) is 270000Y and that I could also take my lump sum from kosei nenkin but, I don't know, something smells fishy...

    Leave a comment:

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