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What pension plan is suitable for expats living in Japan?

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  • What pension plan is suitable for expats living in Japan?

    I am a foreigner living in Japan, who will be getting married soon, and may be spending a long time over here. I may even end up retiring here, so I was wondering what kind of pension plans are suitable for foreigners living over here? Are there any plans that will pay out in both Japan and the UK? I am not sure which country I might end up retiring in, but I want to try and get some kind of financial plan in place. Is the Japanese national pension (the one that you get for paying Shakai-hoken) likely to be quite small, or even non-exoistent in 30 years time? Thanks in advance for any tips and advice.

  • #2
    Originally posted by c233sz View Post
    I am a foreigner living in Japan, who will be getting married soon, and may be spending a long time over here. I may even end up retiring here, so I was wondering what kind of pension plans are suitable for foreigners living over here? Are there any plans that will pay out in both Japan and the UK? I am not sure which country I might end up retiring in, but I want to try and get some kind of financial plan in place. Is the Japanese national pension (the one that you get for paying Shakai-hoken) likely to be quite small, or even non-exoistent in 30 years time? Thanks in advance for any tips and advice.
    My best advice would be to contact a financial planner (mine was Banner in Tokyo) and they can set you up with savings plans that pay towards pensions, childrens college funds, health insurance etc. Once the policy matures it can be paid anywhere in the world.

    Personally I would not rely on the Japanese pension fund to support you post-retirement.

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    • #3
      Originally posted by c233sz View Post
      plan in place. Is the Japanese national pension (the one that you get for paying Shakai-hoken) likely to be quite small, or even non-exoistent in 30 years time? Thanks in advance for any tips and advice.
      You may be compelled to join the J pension system at some stage (when/if you work for a company here, or in some other way). After paying for at least 25 years, it pays out wherever you are, although it might be necessary to keep a Japanese bank account active to receive the money. The amount may decrease in the future (so might the UK pension!) or the receiving age may be above 65.

      "Investment/Pension funds" offered by financial "advisers" might go up or down -- beware of committing yourself to a foreign pension plan for many years, which may have stiff cancelling fees, if you decide to encash early.

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      • #4
        Originally posted by minamon View Post
        You may be compelled to join the J pension system at some stage (when/if you work for a company here, or in some other way). After paying for at least 25 years, ...
        Just for clarity.... the law here is that all residents must join and contribute - not just job holders. And there is discussion on lowering the vesting number of years to 10 from the current 25.

        My advice would be to join and contribute - but also ensure that you have additional pension plans in place.

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        • #5
          In addition, you don't have to pay some company to save for your retirement. You can save and invest by yourself. If you don't know anything about investing I'd suggest starting with a primer, like Investing For Dummies, UK.

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          • #6
            I agree with Plats. You can often match (well some of us sure can) the returns of numerous funds by choosing yourself. Take some time, listen a lot, read a lot, reflect, and then start out small. I would say that if you are young under 30 or early 30s, you could spend a full year at least reading and listening.

            I would be leary of joining any pension program here and if at all possible I would do my best not to join. In my case, I am forced to belong to one.

            Recently, looking at the Nikkei news, I see these stories (there are plenty more):

            Toshiba Cuts NAND Flash Memory Production By 30%
            Sharp Faces Y100bn Net Loss For April-June
            Smaller Firms Abandoning Pension Plans
            16 Months Later, Truths Over Fukushima Disaster Still Elusive
            Jul 21 03:27 - Rash Of Small-Business Failures May End Up Costing Taxpayers
            Jul 19 05:04 - Japan Banks On Guard For Interest Rate Fraud
            Jul 19 11:13 - Japan's Failed Attempt To Create Nation Of Investors
            Jul 18 06:03 - Giant Pension Fund To Face Sharper Scrutiny
            Jul 20 04:44 - Accountant Group Mulls Stricter Oversight
            Jul 19 12:40 - 80% Of Pension Funds Entrusted To AIJ Underfunded: Ministry
            Jul 21 02:00 - Japanese Workforce May Shrink By 8.5mn Through '30: Govt
            DJ: Shirakawa To Keep Buying Assets Continuously Every Month

            These sorts of stories don't exactly build confidence in Japan, at least not with me, they don't. Admittedly, these are all cherry-picked and show bias and there are certainly success stories out there (new groundbreaking frontier technologies are being developed), but I think they are indicative of a large, continuing problem. If we consider Japan the country as Japan, Inc., it is not doing very well. We can see that Spain/Greece is like a company in receivership that is being forced to be kept afloat. If Japan goes the same way, I wonder what kind of returns Japan-based pensions plan would yield. In a word, I have more faith in my own investments than those of a typical pension here.

            As an example of a good, informative article, I append this one from today's Bloomberg News.
            http://www.bloomberg.com/news/2012-0...ds-nikkei.html
            Last edited by Super Grover; 2012-07-24, 11:43 AM. Reason: addition

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            • #7
              Originally posted by c233sz View Post
              I am a foreigner living in Japan, who will be getting married soon, and may be spending a long time over here. I may even end up retiring here, so I was wondering what kind of pension plans are suitable for foreigners living over here? Are there any plans that will pay out in both Japan and the UK? I am not sure which country I might end up retiring in, but I want to try and get some kind of financial plan in place. Is the Japanese national pension (the one that you get for paying Shakai-hoken) likely to be quite small, or even non-exoistent in 30 years time? Thanks in advance for any tips and advice.
              Congratulations on your marriage. You should be automatically enrolled in the governement's pension scheme, but due to the population decline, rather expect to get out less than you have paid in. So putting away extra funds would be recommended. A lot of people would buy a house/apartment, thus being able to live 'rent-free'. Another possibility would be an investment plan or a 'whole' life insurance (pension + death benefit), but charge high fees. You could also put aside some money by yourself and buy stocks/bonds, but needs discipline and a bit of research.

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              • #8
                Pension Scheme in Japan

                Hello members!

                We would like to introduce our company to foreigners who are concerned about their retirement in Japan.
                We can help foreign professionals living and working here in Japan who are concerned about Pension Scheme, Tax efficient savings, and portfolio management services.

                www.devere-group.com

                deVere Group Tokyo
                Azabu East Building, 4th Floor,
                1-25-5 Higashi Azabu, Minato-ku
                Tokyo, 106-0044,
                Japan
                03-3568-2597

                Please do not hesitate to contact us
                We can also arrange a meeting with one of our consultant in our office in Tokyo or at your office to answer any questions you may have.

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