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Retirement for Expats in Japan

Author: Jason Zhou
Submitted: June 2014

Visas

Japan has long been regarded as a fantastic destination for tourists. Its history, beautiful scenery, tea ceremony, animation and well development modern cities attracts tourists from all over the world. Unfortunately Japan is not a great retirement destination. This is due to the high living cost and the lack of long term resident visas. Japan does not offer a retirement visa or anything similar and there are limited ways to receive a permanent resident visa. Generally, permanent visas can only be achieved over time using long term stay visas, which can take over 6 years and requires fluency in Japanese, or through marriage to a Japanese citizen. A permanent residency visa through marriage may take a period of five years. You can get further advice from your nearest Japanese Embassy, details of which can be found here: https://www.mofa.go.jp/about/emb_cons/mofaserv.html.

Health Care and Pensions

Any residents, who have the right to live in Japan for over one year, should enroll themselves for either the National Health Insurance (NHI) or Employees' Health Insurance (EHI). Members of the NHI or EHI only need to pay 30% of their medical expenses, for those who do not have health insurance costs can become very high. With insurance you should expect to pay between JPY5,000 to JPY10,00 (about US$50-US$100) for a consultation, including minor tests and treatment, in a medical clinic and higher for a consultation in a hospital. Many people also choose to have private health insurance for diseases or illnesses not covered by the national schemes.

National pensions are available for citizens and foreign nationals. The pension age is 65 years old but you currently need a minimum of 25 years contribution.

Tax

Tax is always a big part of life, no matter where you live. Permanent residents (i.e. residents who have resided in Japan for more than five years) are subject to tax on worldwide income regardless of remittances to Japan. Non-permanent residents (i.e. residents who are not Japanese citizens, have no intention of residing in Japan permanently and have had residence or domicile in Japan uninterruptedly for less than five years in the previous 10 years) are subject to tax only on their total income derived from sources within Japan and on their income from other sources paid in Japan or remitted to Japan from abroad. Therefore, it is always recommended that you should consider the tax consequences before you retire to Japan as a long term resident.

Finances

Most people would like to keep their living standard similar to what they experienced before retirement. However, many studies have shown that most retirement savings run out much earlier than expected. It is recommended that you should establish a detailed retirement plan and start saving as soon as possible, regardless of your age. A retirement plan should include; your expected retirement age, the lifestyle you would like to have during retirement, the cost of living you would expect, the source of income, the level of risk included in your source of income and a strategy to meet your goals.

 

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