As you know, the Land of the Rising Sun ranks first in terms of the number of pensioners on the planet. Pension in Japan is an important social problem, and at the same time a feature of the country’s economic system. Life expectancy in the eastern power is growing from year to year and is now superior to any other state. Since 2007, the number of pensioners has been increasing, as people born during the baby boom of 1947-49 are retiring.
Japanese pensioners
Features of the Japanese pension system
The complexity of Japan's social and economic system is that the state assumes obligations to provide for the elderly, but the number of those in need is steadily growing. There are more and more pensioners, and the birth rate has been falling for decades. The percentage of people over 65 years of age in the Land of the Rising Sun, compared to the share of working age, is lower than in other countries. In 2010, the share of those who experienced old age was 38%; by 2030 this will be 57%.
The pension system of the Land of the Rising Sun was formed taking into account humanistic ideas about caring for the older generation, international expectations from a power with a high level of development, but also when analyzing the real possibilities of the budget. Although public duty dictates that elderly people be provided with comfortable living conditions, one of the key priorities of financial policy is to reduce spending on social needs, including those related to the age of citizens. Currently, up to 55% of budget expenditures go to ensuring the quality of life of pensioners (including medical care and social care). Conditions for economic survival require a reduction in the budget deficit; the best way is to rationalize expenses. It also affects social payments.
Japan has the longest life expectancy
Is the Japanese pension system reliable?
Now in the Land of the Rising Sun, every citizen can count on government care and guardianship. For an individual Japanese, the system is reliable and gives him guarantees of a comfortable life in his twilight years. From a government point of view, there is a serious problem and reform is needed. If radical changes are delayed, the age imbalance will worsen. Since taxes are mainly paid by able-bodied middle-aged people, the situation will become critical.
Economists suggest that one way out for the country is to raise the age of well-deserved retirement in old age. This way, older citizens will participate longer in the work system, pay taxes, raising the level of income and consumption in general. The second way is to balance the budget. Every older citizen should receive enough money for a decent life, but the pension system, which at the same time acts as an instrument for the redistribution of money in the country, should save the budget, and not just insure society.
Japanese society is aging
Types of old-age pensions in Japan
When planning to live in the Land of the Rising Sun at the end of your life, you need to know in advance about a pension in Japan: to whom, at what age, in what amount. The amounts are calculated individually and determined by the number of years worked, money received for it, and contributions paid.
The minimum amount (also known as the first level) is available to every citizen who has paid contributions for 25 years or more. The amounts are calculated based on the amount of contributions and how many years they have been received from the citizen. If the payment period is 40 years or more, the citizen receives a full national pension - 66 thousand yen. This value is about 15% of the average salary. The amount is regularly increased to take into account inflation.
A person who has worked for 40 years can receive up to 180 thousand yen in old age. This does not apply to the self-employed. Typically, women earn half as much because they rarely work after having a child.
Another pension option is an individual, corporate plan. This is the name given to a one-time pre-agreed payment that a citizen receives upon becoming a pensioner. For someone who has worked for 20 years, this is 10-12 payments per year (about 25 million yen). Up to 85% of employers prefer this pension scheme.
There are several pension payment schemes
Pension Fund
As already mentioned, the pension fund in Japan is quite large. However, the question remains open: why, having the same number of working population, cannot other developed countries create the same pension system as in Japan? Experts say there are two main reasons for this:
- The process of accumulating reserves has not yet been completed. And in the case of economic growth, the growth of the fund will not keep pace with the increase in social welfare.
- Countries do not change the system of automatic accrual of pension payments. Simply put, insurance premiums are automatically transferred as pension payments. Accordingly, the government has no reason to create a reserve savings fund.
Pensions in Japan are one of the highest in the world and all thanks to the savings fund, but it is also important to understand how the Japanese generally relate to money.
Retirement age in Japan
In the Land of the Rising Sun, a citizen can become a pensioner at the age of 60.
Japanese citizens have the right to full old-age benefits from the age of 65.
Raising the age limit is currently being discussed. If citizens retire later, the risk of economic collapse due to an aging society will be reduced. Now, on average, a Japanese man lives almost 81 years, a Japanese woman – 87 years. Upon retirement, a person can count on a third of a quiet, prosperous life, not busy with everyday work. This period is called the “second life”, the time that a person devotes only to himself and what he sincerely loves. However, about 7.7 million Japanese pensioners continue to work, mainly on a contract basis, in order to choose a schedule that suits them.
Many Japanese retirees continue to work
Age
About 8 million Japanese choose to continue working after age 60. Although, from this age some pension payments are already available. Social size Old age payments are received in full by people over 65 years of age.
Legislation has approved that residents of Japan can retire at 65 years old. It is possible to exit 5 years earlier.
Early retirement is available to employees if they:
- were involved in hazardous industries;
- have special differences;
- suffered traumatic injuries at work.
The Japanese population is considered to be long-lived, and they have few children. Thus, the pension threshold for “retirement” can be increased to 71 years.
Those who wish to continue working can continue to work - no one prohibits it; on the contrary, it is economically beneficial for the state.
Pension size in Japan
There is no standard single pension payment in the Land of the Rising Sun. The pension is determined by contributions, the period for depositing funds, and the age of the citizen. So, if a Japanese person paid 16,490 yen monthly and worked for 40 years or more, then from the age of 65 he receives 65,000 yen monthly.
The second level of pensions is calculated from employer contributions (18.3% of wages). This amount is paid until the citizen retires. Payments under the system are available to citizens over 65 years of age. On average, a Japanese person receives 154,000 yen every month.
Housewives who do not pay contributions every month can receive a pension. For those who have reached 65 years of age, the state has provided a payment of 65,000 yen. If a housewife's husband dies, she will receive his benefits based on her salary.
There are 2 payout levels
The size of the Japanese pension
To understand who gets paid and how much in Japan after retirement, you need to understand at least a little about the state’s pension system. Any of the social spheres of material support has its pitfalls and nuances, without knowing which you can remain in a foreign country with a small amount of income in old age.
The minimum pension in Japan in 2021 is about 40,000 in rubles and applies to the category of citizens of the country who received their basic old-age pension at the age of 65. Upon reaching retirement age, the state begins to pay exactly this amount if a person cannot confirm his official work activity during his life or does not have a funded/insurance part of the pension.
What is the average pension in Japan in 2021 for citizens depends on all three components - basic minimum payments from the state, professional savings and the size of a one-time payment, depending on the number of years of work experience and average salary. The majority of the elderly population in Japan receives on average 48,000 - 54,000 rubles per month in retirement.
The size of the professional accumulated part of the pension can increase the final amount of payments in the range of 30-100 percent. For example, a number of military personnel in Japan receive up to 40 percent of their historical monthly salaries after retirement. Thus, they can count on a pension of 80,000 - 120,000 rubles.
Despite such high numbers, not all Japanese can count on them. Based on the official statistics of the country’s Ministry of Labor and Employment, almost a third of all pensioners in the country, after retirement, continue to work in not the simplest industry - agriculture. Elderly people spend whole days in the fields and participate in the process of growing rice. The main goal that the Japanese pursue as they continue to work is to provide a full life for their grandchildren and children, to acquire property and personal transport for them.
Several hundred thousand Japanese have failed to make significant savings in their lifetimes. In this regard, 1/5 of the country's elderly population belongs to the poor and is below the poverty line. On the streets of Japan you can meet old people who live right there because they were left without housing or could not save up for it during their lives.
Japanese pension - big or small?
By Russian standards, the Japanese pension seems large even in the case of a lower pension under the state pension system. Still, this is almost half a million rubles a year!
Can the average Russian pensioner count on that kind of money? The answer, I think, is obvious.
But it would be a mistake to look at Japanese pensions from a Russian perspective. It is necessary to understand whether it is sufficient in Japan. To do this, you need to compare the pension with Japanese prices.
And people who made contributions only through the state pension system will have to live quite modestly in old age. 779,300 yen per year is approximately 65 thousand yen per month. In general, this money should be enough to pay for utilities and food, but it won’t be luxurious. And if you haven’t managed to buy your own home in your life, then you’ll have to forget about life in Tokyo, since in the capital renting even a tiny one-room apartment will cost at least 70-80 thousand yen per month (the purchase will cost tens of millions). In general, the chances are high that in old age you will have to enjoy a quiet village life.
The Social Security system will allow you to receive a much larger pension. But here everything depends on the success of your career. On average, the Japanese start their careers with 200 thousand yen per month, and by the end of their career, if everything goes well and they manage to achieve a leadership position, they can count on 500 thousand per month. Representatives of complex technical professions can receive this kind of money within 5-10 years after starting work. Such people will be able to receive an impressive pension, which will allow them not only to live freely in Japan, but also to travel around the world.
Life of Japanese pensioners
The Financial Services Agency has calculated that elderly spouses receive about 209,198 yen monthly and spend 263,718 yen. The difference is covered from the couple's savings, but some families do not have financial reserves. In addition, there may be situations where special care is required. State provision of pensions is becoming increasingly difficult, so economists threaten to make the situation worse. At the same time, statistics confirm that Japanese retirees consider themselves happy centenarians.
Now in Japan there are more than 40 thousand people over a century old. Every 5th pensioner is over 100 years old. Some analysts are confident that soon every 2nd pensioner will be over 100 years old. Having become a pensioner at 65, a person begins a new life, free from previous obligations. Of course, many work part-time to have more available funds, but in general, Japanese people who have their own real estate can afford a comfortable life and travel around the world.
Older Japanese people prefer to travel around Southeast Asia. Occasionally, wealthy citizens go to see Europe. Many are active, learn new things, engage in domestic tourism, master crafts, and communicate with people much more than during the period of active work. Most elderly Japanese keep their bodies in excellent shape by exercising regularly. Recently, the Internet has become a good way to spend time. The network is used as a means of communication, a source of new knowledge and news.
The life of Japanese pensioners is filled with events
Pension in Japan for a foreigner
Foreigners living and working in Japan are required to pay insurance premiums. Even a student at a language school must contribute funds according to the program established by law. A reduction in payments is available to the unemployed, disabled people who have submitted a special petition.
A foreign citizen is entitled to a basic national pension if he contributes to the social system every month. Even if a person did not have an official job (for example, he ran his own business), he receives basic payments.
If a foreigner leaves the Land of the Rising Sun, he can request a partial one-time refund. The application is submitted to the state insurance system. For citizens who have lived in the state for 3-9 years, the refund is made in 3 or less years. You can leave money in the fund to use it in the future. A foreigner who has lived in the country for more than a decade and paid all fees, worked officially, full time, cannot receive a refund upon departure. He has the option of transferring funds to a fund in his new country of residence (this is available in 18 countries) or waiting until retirement age to receive payments in Japan.
Social Security: Features
Pensions in Japan began to be paid in 1942. At that time it was called a public pension because only a third was paid from the state fund. The missing amount directly depended on contributions from entrepreneurs and the working population. At that time, pensions in Japan were not particularly stable. The situation changes in 1986, when the Social Insurance Fund was founded. Today, the assets of this organization amount to 170 trillion yen. In the USA alone, the pension fund is more than 186 trillion yen, but the population in this country is several times larger than the population of Japan.
