A Tale of Retiring in Japan
Challenges of Receiving Both U.S. and Japanese Pensions
After working in Japan for many years, I retired and live here now. Fortunately, I worked in the U.S. for some years, including four years teaching at a university in the United States.
Now I am receiving my pensions: the Japanese national pension and the Japanese private teacher’s pension as well as U.S. social security pension and a U.S. teachers’ annuity. Sounds great, but, of course, I receive an amount based on the number of months working in each country.
I would like to talk about my challenges getting my pensions/annuities in the two countries.
Japanese National Pension
The Japanese national pension is very straightforward. Everyone receives the same amount depending on the number of years they have worked in Japan. For 2022, the monthly contribution for everyone was 16,500 yen per month. ($125/month at 132 yen/$1) If you worked full-time, this was taken out of your salary so you never really saw it.
At 65, if you started receiving your pension after 40 years of work, you would get 777,800 yen a year ($5892) or about 64,817 yen per month ($491). If you worked less, there is a simple way to calculate what you would receive.
After working for 40 years, you cannot increase this value. However, if you worked less than 40 years there are ways to increase the amount. (国民年金（こくみんねんきん）／National Pension System｜日本年金機構 (nenkin.go.jp))
A fault with the national pension is that when you pass away, so does the pension. Your spouse gets no part of your national pension. For example, my wife, who is Japanese, would have to depend on her national pension, a reduced amount of my Japanese private teachers’ pension, and my U.S. Social Security for survivor benefits.
Japanese Private Teachers’ Pension
The Japanese Private Teacher’s Pension is more complicated. I never really knew how much I would receive until a few years before I turned 65. At my Japanese university, 65 is the retirement age, though I know that other universities have different retirement ages. However, once I received the estimate, I knew it would increase until the age of 70 if I could continue working. Fortunately, the president asked me to continue teaching.
Unfortunately, after turning 65, my salary was cut by about 40%, as my university, like other organizations, assumes you have worked for 40 years and can supplement your income with your Japanese national pension.
Another rule states that if you continue working after 65, your private pension will be reduced depending on your salary. If you make over 480,000 yen a month ($3636/month) you receive no Private Teachers’ pension. I made a little over that, so at one time my salary was cut, and I didn’t receive a private pension.
I did receive a Japanese national pension, based on 18 years of work in Japan. From that they took out about half of it for long-term care insurance, to support the elderly. As a result, I was making much less, but working the same, or in my case, more than before I turned 65.
Another gripe with the Japanese pension system, national and private, is the timing. When I worked at a Japanese university, they sent my salary to my bank account on the same day every month. It was very easy to pay bills and budget expenses every month.
Both the Japanese and national pensions arrive every two months on the 15th of the month. Every two months. So, you turn 65 or so, and the pensions coming every other month complicate life, especially paying bills.
I keep searching for why it is not every month, but I have not discovered the reason. Since the money from both pensions goes directly to my bank account, it is automatic. I am assuming that it is a good way for the national pension and private teachers’ pension funds to make more money off the interest for an extra month. With millions of people receiving pensions, that would be a fair amount of money.
US Social Security
For Social Security in the U.S., I can go to my Social Security online account to see how much I would receive at retirement. This is very easy to understand. Rather, it is easy for anyone who has worked full-time only in the U.S. and not in another country.
According to the Social Security webpage, in 2023, the maximum monthly benefit at retirement is $3627, and at 70 years old, it would reach $4555. (https://www.ssa.gov/)
If you live overseas, things get complicated when you want to start collecting your Social Security pension. First, I cannot visit a local social security office, so I had to contact Federal Benefits Services at the US Embassy in Tokyo, and I had a telephone interview with the office to arrange payment of my social security pension to my Japanese bank. That was fairly easy.
Then there is the Windfall Elimination Provision. The online social security website has information, but it is very difficult to understand. It basically says that if you live overseas and have a pension from that country, then the U.S. can reduce your social security pension payments by an amount that they have some formula to figure out. I have never figured it out.
U.S. University Annuity
I worked at a university for four years in the U.S., so I paid into a U.S. university annuity plan. After moving to teach in Japan I could no longer add to this account. I have access to my account online, so I can keep track of the amount. After retiring in Japan, I decided to withdraw the money monthly over several years.
A downside of living overseas is that most communication for transactions has to be done over the telephone. If I worked in the U.S., I could arrange this with the local pension plan representative.
Thus, an adventure started with about 10 phone calls and three online notary signatures. After about eight months, I did start receiving the funds.
Conclusion
Though it was challenging to arrange the pensions, I am receiving the four pensions now. Yet, I still hope that someday, the Japanese national pension and the Japanese Private Teachers’ Pension decide to pay out the pensions every month instead of every other month. That would make life so much easier.
Note: I used an exchange rate of $1/132 yen
Informative Websites
Japanese national pension website: https://www.nenkin.go.jp/international/japanese-system/nationalpension/nationalpension.html
U.S. social security webpage: https://www.ssa.gov/
Social security explained: Social Security Explained: How It Works, Types of Benefits (investopedia.com)
