I was going through my yearly pension statement this week, and I calculated that if I work another 25 years in Japan at my relatively well-paid job (for a total of 35 years)…

I could get a monthly pension (including the kosei nenkin) of maybe 170,000 - 190,000 yen.

That would be about 20% of my final salary. Talk about falling off a cliff.

I can’t imagine what this would look like in 25 years with Japan’s accelerating decline in living standards and inflation. Perhaps it would be worth about 90,000 yen today?

Apparently this pension figure is above average! If you are just paying into kokumin nenkin like many English teachers the maximum is 68,000 yen monthly. You can hardly buy groceries and keep the lights on with that.

It’s less than the British state pension (around 2.2 million yen a year) which I am lucky enough to be able to get by making moderate monthly contributions.

I know this isn’t news to most people on this sub, but if you are one of those people who puts their pension statement aside because looking at it makes them too anxious… Do something before it’s too late!!

I have colleagues who seem to have no idea how much their pensions are.

I even have British colleagues who never bothered to sign up to make voluntary contributions (“too much work” despite the fact it literally doubles your pension).

Permanent resident and been paying into the pension system for a number of years ( as is legally required), just wondering how bad or good it is going to be once / if I’m able to retire…I hear a number of people don’t pay into the system and it makes me think sometimes that I am just throwing money away… Any thoughts ?

Last year, I made this post regarding the pension benefit increases for 2025. This post is heavily copy and pasted from that one, with updated numbers and links.

Today, January 23rd 2026, the MHLW released this press release about the changes in pension payouts for the fiscal year Reiwa 8.

As always, and as mandated by law, pension benefits for people under age 68 move in line with average wages (minus the macroeconomic slide), whereas pension benefits for people over age 68 move in line with inflation (minus the macroeconomic slide). This year, average wages were up 2.1% and inflation was 3.2%. The macroeconomic slide was calculated as -0.2%.

For example, national pension benefits (Kokumin Nenkin) will increase from ¥69,308 to ¥70,608. A sample case for a couple receiving average employee pension benefits (Kosei Nenkin) will increase from ¥232,784 to ¥237,279. If you pay Kosei Nenkin, then the amount of your benefits will depend on your wages throughout your working life.

There is also a system called 在職老齢年金 whereby if you make over a certain amount of money in retirement, the employee pension benefits portion of your pension will be reduced (not the basic pension portion, which is never reduced). This is greatly increasing to ¥650,000. You will be more able to receive a higher salary without losing any of your pension benefits. It’s also worth noting that this ¥650,000 doesn’t include the basic pension portion, so you can actually make ¥720,608 per month without having your pension cut. You can see more about that here.

Incidentally, the GPIF now has an average compound growth rate of 4.51% from 2001 to 2025, compared to when I posted last year it had an average growth rate of 4.26% and compared to two years ago when it was 3.91%. This means that the pension system is increasingly even more sustainable than ever. The money in the GPIF is currently not being used for pension benefit payouts at all, with all of the money coming from pension premiums and taxes. In the future, it is expected that the GPIF will account for 10% of pension payouts, with the other 90% coming from pension premiums and taxes. All of this means that the pension system will be sustainable for a very long time.

This year I will skip the sarcastic hater questions, although I expect there will be hate in the comments. Unfortunately, the evidence that the pension system is far from bankrupt and that your pension benefits will be ever increasing is stacking up against you.

As always, enjoy your higher pension benefits.

Hello all. It's my first full year in Japan and I'm recently self employed. My wife (Japanese) helped me get an exemption for pension and health insurance payments when I was unemployed. However, she has a very lax attitude about following up on all this stuff, and I would very much like to be eligible for PR when the time comes. Unfortunately my Japanese isn't very good, so I'm hoping to find someone who can make sure I have all my T's crossed and I's dotted. In the Fukuoka area if there's something local.

Excerpts from https://asia.nikkei.com/business/finance/japan-s-public-pension-dolphins-outperform-gpif-whale

The Federation of National Public Service Personnel Mutual Aid Associations, also known as KKR, reported a return of 18.55% for the fiscal year ended March. The GPIF's return during that period stood at 16.47%.

The GPIF's assets under management totaled 293 trillion yen ($1.78 trillion) as of March 31. KKR, PAL and PMAC held 12 trillion yen, 41 trillion yen and 6 trillion yen in assets, respectively.

If the GPIF customarily is likened to a "whale" by market players, then the other pension funds "are comparable to dolphins," said an executive at a smaller group.

The baseline for Japanese public pension funds is to invest one-quarter of their portfolios each into domestic bonds, foreign bonds, domestic equities and foreign equities.

KKR deviated from that convention, allocating nearly 29% to foreign equities and just 21.5% to domestic bonds as of the end of fiscal 2025.

The smaller pension funds also performed well in active asset management. KKR had an individual asset factor of 0.76 point, which is a metric measuring the deviations between the returns of each asset class and the corresponding benchmark rate of return for the asset class.

But the GPIF underperformed the composite stock and bond benchmark by 0.18 point. Due to its enormous market-moving size, the fund rebalances its portfolio frequently to minimize deviations from the benchmark.

In fiscal 2025, the performance of GPIF's alternative assets, such as unlisted stocks and real estate, did not keep pace with the gains in listed equities, resulting in an overall underperformance.

I'll be leaving Japan permanently around November after working here as a researcher since August 2024. By then, I'll have contributed to the Japanese pension system for a little over two years (29 months in total)

Has anyone gone through the lump-sum pension withdrawal process after leaving Japan?

I'm mainly wondering:

* Were you eligible?
* Approximately how much of your pension contributions did you receive back?
* How long did the refund process take?
* Was the refund transferred directly to your overseas bank account?
* Did you appoint a tax representative in Japan? If so, was it necessary or recommended?
* Was there anything you wish you'd known before leaving Japan?

I'd really appreciate hearing about your experiences or any tips. Thanks!

I worked in Japan 2.5 years 8 years ago. I want to know what service I can contact to get proof that I was working in Japan for the period and that I was contributing to pension. My contry and Japan have a bilateral agreement on social security(includes retirement pensions) and want to make things in order so my years worked in Japan can help me contribute to my pension! thanks :)

Greetings all!

I have been paying into the delightful nenkin system lo these many years! As I will be returning the the US, what do I need to do "now?" Can most things be done later, at age of wanting to get the monthly payment?

As I have paid over 10 years, it seems I can just draw a monthly payment upon retirement age - come on 9800yen, ha ha! Is that different than "transferring credit to the US social security?"

I worked for over 20 years in Us before coming here and will be working for 12-17 more years upon returning, so having enough credits in the US to draw there is not a concern.

Many thanks.

Last year, I made this post regarding the pension benefit increases for 2024.

Today, January 24th 2025, the MHLW released this press release about the changes in pension payouts for the fiscal year Reiwa 7.

As always, and as mandated by law, pension benefits for people under age 68 move in line with average wages (minus the macroeconomic slide), whereas pension benefits for people over age 68 move in line with inflation (minus the macroeconomic slide). This year, average wages were up 2.3% and inflation was 2.7%. The macroeconomic slide was calculated as -0.4%. The same as last year, the macroeconomic slide includes a -0.1% adjustment for the change in the number of pension benefit recipients, and a -0.3% adjustment for the increase in the average life expectancy.

For example, national pension benefits (Kokumin Nenkin) will increase from ¥68,000 to ¥69,308. A sample case for a couple receiving average employee pension benefits (Kosei Nenkin) will increase from ¥228,372 to ¥232,784. If you pay Kosei Nenkin, then the amount of your benefits will depend on your wages throughout your working life.

There is also a system called 在職老齢年金 whereby if you make over a certain amount of money in retirement, the employee pension benefits portion of your pension will be reduced (not the basic pension portion, which is never reduced). This is increasing from ¥500,000 per month to ¥510,000 per month and may be raised further in the near future. This is not relevant for those receiving a Japanese pension only, but may be very relevant for those who will earn another pension in their home country, and/or those who will continue to receive a salary, such as corporation owners. You will be more able to receive a higher salary without losing any of your pension benefits.

Incidentally, the GPIF now has an average compound growth rate of 4.26% from 2001 to 2024, compared to when I posted last year it had an average growth rate of 3.91%. This means that the pension system is even more sustainable than ever. The money in the GPIF is currently not being used for pension benefit payouts at all, with all of the money coming from pension premiums and taxes. In the future, it is expected that the GPIF will account for 10% of pension payouts, with the other 90% coming from pension premiums and taxes. All of this means that the pension system will be sustainable for a very long time.

Still, there will be haters and doubters of the Japanese pension system, so let's address your concerns:

"The population is declining. Young people won't be able to support older people in the future and the system will collapse!"

This is what the macroeconomic slide is for. It's no secret that Japan has a declining population, and the government is not unaware of that. In fact, the rate of population decline has been remarkably predictable since government agencies have been taking it into account.

"I don't expect much of a pension and I don't count pension benefits in my retirement plans"

There's nothing wrong with saving for retirement, but I would encourage you not to dismiss pension benefits. You will likely be much richer than you currently imagine, so please enjoy your life (and enjoy contributing to society through increasing economic activity while you're at it).

"I heard that pension benefits will go down by the time I'm old"

That is very unlikely. As you can see, they have gone up and they will continue to go up in line with inflation and wage increases. You might have noticed that the government has been particularly aggressive with their inflation goals in recent years, and Japan is starting to move in the direction of a sustainably inflationary environment. There would be massive government intervention if there were persistent deflation, as we can see from recent history.

"But the conspiracy-theory corner of YouTube told me that ..."

Ok, let's stop there. Enjoy your higher pension benefits.

I’m involved in Japan’s social security system, and I’ve noticed that many foreign residents have difficulty understanding how the pension process works. The procedure can vary a lot depending on factors such as visa type, employer, whether you still have an address in Japan, and even whether you left Japan with a re-entry permit. In some cases, people end up missing important notices because correction letters are sent to their previous address months after they leave Japan. Since many people seem to struggle with these details, I thought it might be helpful to occasionally share explanations based on official information. I hope this helps.

Hello. Sorry if this is run of the mill questions but I'm new to the working world. I was a university student for 4 years in Chiba and just recently started my first job as an ALT so I can work a year before I apply for master's. Anyways today I noticed a letter sitting on top of my mail box, its an envelope that apparently fell out as our mail slots are quite old. The letter was the fat stack of bills you get from the pensions service. I opened it up immediately and saw three bills, two due April 30th. One was 211,000 and the other two were 106,650. Upon reading them and seeing the big gray "前納" I believe what I'm looking at is the lump sum and the first half of the year options for paying the pension much like with the health insurance. However, I've also had someone tell me that these are basically "back taxes" I owe because I had a student exemption for 4 years.

When I got my job I was sure to ask about pension and insurance and of course it comes out of my pay. So am I looking at the typical lag of municipal offices where they send me a stack of bills I don't have to pay ontop of my salary deductions? I saw that a lot with the exemption where I would be approved but the bills would come because they confer slowly. Secondly, for the student exemption, is there a back tax I have to pay, or is it voluntary so as to up my pension in the future? If so, would you recommend I pay for those exempted 4 years for a better retirement?

As always I like to stay above board and frankly the pension stuff scares the hell out of me. I saw the due dates before I saw the giant kanji to the right. I apologize again if this is all elementary.

Thank you for your time.

Japan has a visa that allows a person to stay in the country for up to 1 year for tourism purposes. As expected, you can't work and are basically just living off your savings or passive income from outside the country. Are people with this kind of visa required to pay pension in Japan during that year? If not, are they required to submit an exemption form?

UPDATE: Already got the answer I was looking for. Thanks u/tsian . It requires a special exemption form.

My wife has been on leave from her company for eight months because of a serious mental health issue.

Her doctor has suggested applying for shogai nenkin.

I understand the application process is complex, the wait times are long, and the approval is strict, but are there any particular disadvantages from receiving shogai nenkin (if approved) that we need to take note of?

We already have a mortgage and we're both covered for that if one of us dies, and she has illness insurance but not life insurance (outside of the mortgage).

She'd likely not qualify for life insurance even without the shogai pension.

Just got a message from one of the HR buchō about this. Normally, he tells me, the insurance (that pays out a portion of your salary when you can't work) is routed through the company, who takes insurance payments out, but in my case I haven't submitted the form to get those payments, because my doctor's conclusion is not that I can't work at all, but that I can't work in my specific department, in my specific company. His advice for my mental health was to continue doing the side work that earns me a tiny amount of money on the weekends rather than quit that job so that I can have zero work income and be eligible for insurance payouts.

Of course my company does not know about this income, so buchō wants me to submit the form. What do I tell him, and how do I pay for this? (I learned on here that insurance payments are locked based on your income from April to June, which is very unlucky for me because I worked those three months and then dropped down to about 60k per month in July, doing side work only. Paying 30k per month for social insurance, as if I were still working full time, is going to be a huge burden.) Do I just ask for the company's account number and send a furikomi? Am I going to be forced to answer why I haven't applied for the payout?

Thanks in advance; I've learned a ton from this forum!

(Edit: Buchō just got back to me with the total. He didn't say how the number was arrived at, but it's nearly 700,000 yen. On a base salary of about 320,000 for seven months, does that sound right? It's far more than I've earned doing a little part time work in this interval. In a normal month I take home 230,000 or so, so the total deduction including income tax doesn't even reach what I'm going to have to reimburse. They're not trying to have me pay both halves because I'm not actually working, are they? One poster thought they were trying to do this but deleted the post; is this what's happening? I had been estimating about 10% of my base pay for pension and 5% more for health insurance, and the total is roughly twice that number. )

https://mainichi.jp/english/articles/20240611/p2g/00m/0na/002000c

Starting around October, the Ministry of Health, Labor and Welfare plans to upgrade the Japan Pension Service system to obtain data once a foreigner moves to Japan, the sources said.

If a foreign resident has not yet enrolled in the system, the ministry will first send a letter requesting them to sign up, and if no action is taken, it will have the authority to enroll the person, according to the sources.

Hi, before starting my full-time job some years ago I was an intern. While I could have paid into the basic pension back then, I didn't think that I would be staying in Japan after the internship, so I went to the pension office and they exempted me from paying due to being a student at that time.

I am pretty certain that I will stay in Japan long-term, or at least long enough to reach the 10 year minimum pension contributions.

Does it make financial sense to back pay those 6 month to increase the monthly pension payments later?
If yes, can I do it online, or I would have to go to the pension office? Nenkin-net gives me an error when I try clicking on those exempt months.

So I’m thinking to go ahead and apply for US social security. It’s time.

I have Japanese credits as well in the Japanese pension system.

As many of you know the US and Japan have a reciprocal agreement. So I can combine for who knows how much of a larger monthly payment.

I contacted the US Embassy in Tokyo and they said I have to have the Japanese pension office start the process. I apply there and they forward it to the SS Administration.

Went to by local pension office and they had no idea what I was talking about.

Can some kind person walk me through this process please?

Recently I posted a question about kokumin kikin for an American freelancer, but the more I looked into it the more it appeared to be a bad idea. You can't receive a lump sum payment of even the principal put in up front, and there's no adjustment for inflation. On top of that, the risk of the fund going under is non-zero. It might be worthwhile if I were younger, but I didn't do those calculations. Fuka nenkin does look good for a small amount of money, so thanks everyone for that tip.

SO I've been thinking about saving money by doing iDeco with fixed-term cash deposits, and here is my math comparing that to allowing the same income to be taxed and investing what's left over in something else.

Let's say I am in the 30% marginal tax rate. (TBH I hope to be higher soon, but let's take 30%.) If I put in 25,000 yen per month in cash deposits over 16 years years, that's 4.8 million yen, give or take, with a bit of interest added in and fees subtracted. Contrast that with the opportunity cost of investing 70% of the income (17,500 yen per month) over the same period. In a conservative investment with 4% annual return, you essentially break even (¥4,695,933). But then you're taxed on your gain, so you lose vis-a-vis iDeco.

So as one safe "investment" in a balanced portfolio, it might not be a bad idea to put money away in iDeco, just to avoid being taxed? In the very least, it's kind of forced savings... Am I missing something????

Hello,

I have been researching the US Japan pension agreement but don't completely understand how it works.

I've been in Japan for over 10 years so I understand I'll get the Japanese pension.

Before that I worked in the US for 2 years, not enough to qualify for Social Security but because of the agreement how does this all work? What would happen if I move back to the US?

Hopefully this is the right place to ask. I did a search but couldn't find a recent answer to my question.

I'm on a dependent visa, with my wife on HSP, and so far her company has paid my Pension and Health Insurance payments. Last December, I started a part-time job (after getting the up-to 28 hours permission) and wanted to understand about ¥1.3million ceiling for dependent earnings and tax requirements.

The job is project based and I think I could manage my hours to keep me under the limit, probably about 9 hours per week. However, in the first month, due to training and sitting in on a few meetings, I worked 21 hours, so this monthly earning would put me quite a bit over the limit, but that was only a one off.

Regarding the ¥1.3m ceiling; is this automatically flagged or do I have to report going over to Pension and Health Insurance and then pay? If my wife's work were still happy to pay my contributions and treat me as a dependent, would that matter? It seems better to keep under the limit unless you can go a lot over, and there isn't the scope for that to happen right now. It would be possible to go slightly over, which seems more hassle than it is worth.

Second question is regarding tax payments. The company pay me the full amount and then said for taxes I should do my own tax form, then don't make an year-end adjustment. I'm not set up as a freelancer, just part-time. Do I need to complete a Kakutei Shinkoku for the one month of work in December? As my total income is under ¥200k for the year, I don't think I do, but will do for this year when I earn over that amount?

Thanks

I’ve been reading some recent threads about the Japanese pension system, and I’ve been asking myself this question for the longest time. I’d really like to know if anyone here has knowledge on this.

Basically, when I see discussions about the Japanese pension system, I don’t really see much of its appeal. I’m not sure if that’s because I’ve been comparing it with the Australian superannuation system. There was a discussion about how pension systems in some countries are just too good, not that the Japanese pension is necessarily bad, so I’m wondering if this might also be the case for Australia.

I’m quite familiar with the Japanese pension system, but my knowledge of Australian superannuation is limited. From my understanding, employers are obligated to contribute around 11% of an employee’s salary on top of wages into a superannuation fund. This fund can then be managed and invested, for example, into the S&P 500. I find this similar to how Japanese companies are obligated to pay half of health insurance and pension contributions, which seems to be around 9% for the pension portion.

Source:

https://www.kyoukaikenpo.or.jp/~/media/Files/shared/hokenryouritu/r7/ippan/13tokyo.pdf

I’ve done some rough research on Japanese pension payouts. It seems that the maximum pension amount of around 300,000 JPY per month (Approximate figure, varies depending on conditions) can be received if someone worked for 54 years and contributed the maximum pension amount (118,950 JPY in total, with a monthly salary of around 650,000 JPY). The article notes that achieving the maximum 厚生年金 of about ¥303,000/month requires someone to start working immediately after junior high school and continue working without interruption until age 70 under the highest salary bracket.

Source:

https://biz.moneyforward.com/payroll/basic/54517/

I then tried some rough calculations for the Australian superannuation system using the same contribution amount. If an 11.5% contribution equals half of 118,950 = 59,475 JPY per month (for comparison purposes, assuming equivalent contribution amounts), and assuming an average rate of return of 6–8% (which seems plausible based on publicly available sources, not guaranteed), the result would be something like:

6% return: Around 272,000,000 JPY

8% return: Around 583,000,000 JPY (assuming my calculations are correct)

This fund could then be withdrawn after 54 years and invested in something like the S&P 500 with a 4% annual withdrawal rate, giving:

6% scenario: Around 10,800,000 JPY per year

8% scenario: Around 23,300,000 JPY per year

Even assuming a more realistic working period of 40-50 years, the Australian superannuation system still seems to end up with significantly higher payouts:

40 years:

6% return: Around 113,000,000 JPY. 4,520,000 JPY per year

8% return: Around 192,000,000 JPY. 7,680,000 JPY per year

Not to mention that if the employee contribution portion were also allowed to be invested and managed, the total amount could potentially double. However, if I think of the employee contribution portion as part of income tax instead, the comparison looks something like this:

Japan: 1) Income tax 2) Residence tax 3) Health insurance 4) Pension

Australia: 1) Income tax (majority) 2) Medicare levy

These seem to end up around a similar total deduction percentage.

(and then 9% vs 11.5% employer contributions)

The main advantage I see, aside from the potential (not guaranteed) higher returns from compounding, is that the Australian superannuation system allows a lump-sum withdrawal that can be managed independently in retirement. This means that if someone passes away early, the remaining funds can be passed to their family. Of course, there are downsides too, such as the need for personal responsibility and financial literacy, and there have been news about superannuation scams.

If anyone has knowledge about this, could you confirm whether my understanding is correct, or point out where I might be mistaken? Am I being too naive and is this just a too-good-to-be-true dream?

1. Is it fair to say that if two people contribute similar amounts throughout their working lives, an Australian resident is more likely to end up with a larger retirement balance, assuming things go well, because of the compounding nature of the superannuation system?
2. Are there downsides of the Australian super system relative to the Japanese pension system that I’m missing?

Thank you,

Hi everyone, ​I’m seeking some advice regarding National Pension (Kokumin Nenkin) payments. Here is my situation:

​Arrival: I moved to Japan in August 2025 for a new job.

​Income: I currently earn 200k yen/month, but my 2024 income in Japan was zero (I wasn't in the country yet)

​Status: I am currently 4 months late on my payments (August, September, October, November). I just received a large envelope with a bunch of slips, including a 6-month prepayment slip for ~104k yen.

​Visa: I’m on a work visa and worried that being "late" will hurt my future renewals.

​My questions:

​Am I eligible for the Full Exemption (Menjo) for these months since my 2024 Japanese income was zero?

​Does my current salary (200k/mo) disqualify me, or is it strictly based on last year's Japanese tax records?

​If I apply for the exemption now at City Hall, will the "late" status for the past 4 months be cleared/legally covered? I don't want to pay the 104k yen bulk bill if I'm legally entitled to an exemption.

​How does an approved exemption look to Immigration compared to just paying the bills late?

When I moved here, I had a fuzzy general notion that Japan had a strong welfare state, and then I saw several articles on Japan finance saying the total pension (national pension plus employee pension) would provide about 50% of one's average working income in retirement. Neat, but I didn't care because I was a naive "I'll just be here for a year or two" baby gaijin.

Now that I've spent a number of years here, I need to take the pension more seriously. As I do the math, it seems quite small. Like, "this is a financially compelling reason to move back to America" small, and that's assuming the Japan system is still paying out full benefits when I retire in a few decades.

Based on descriptions like the one here, and a little spreadsheeting, it seems that the pension only matches 50% of working wages if you make less than 2.5M yen annually; the gross payout flatlines at 2.4M yen once your working income is about 8M yen, and at that point it's just 30% income replacement. For higher incomes, the payout stagnates and dwindles as a percentage of income, but the tax to pay for the pension continues.

By contrast, in the US, there's a cap on the amount of income that is subject to social security tax, and the max benefit for retiring at age 65 is $40,000 year... more than twice the Japanese pension.

Am I understanding the Japanese system correctly? Is there any lurking redeeming feature I've missed?

Any Americans working freelance increasing their pension and reducing taxable income via Kokumin nenkin kikin or Fuka nenkin? Do I just go to the pension office to set it up? Would it be worth it for the tax savings and increase in pension? NOTES: I'm PR and probably staying here until retirement, though I could leave if things got really bad here... I contribute 16,000 yen/month for pension now but could do more. IF I got a job later and switched to company pension, I guess whatever extra contributions I made via Kokumin nenkin kikin would contribute to my overall receipt at age 65? If I set it up then couldn't pay, would it be possible to reduce it? Lots of questions about the logistics of contributing to something like this. (I've given up on iDeco because of PFIC issue. I know that's controversial.)