Hi everyone.
I am 30M living in Tokyo. My company has two options regarding 退職金 (Severence pay).
Option1: split the Severnece pay into two categories; one category which they would save some to pay me when I retire as lump-sum with 3% annual addition to it. + Another categry which they would invest into their Company DC plan. (I don’t know the ratio between the two categories.)
Option2: Split it into 12 every year, and get it paid monthly. This way, I wouldn’t get 一時退職金 (one-time Lump-sum Severence pay) + I would not enroll for the Company DC plan.
I know with Option 1, I would get a lot of tax benefits. But the downside is I would only get it #1.when I retire (for the lump-sum severance pay) and #2. when I reach 60 (for the Company DC plan).
With Option 2, I would get about 20% taxed for the monthly payment. But overall, my salary “looks like” it is about 10% higher than the case which I go with Option 1.
For now, I am doing Option #2 but I can change it to Option #1 as I want.
The current company is good but I hopefully might get a better chance to move to another company in Tokyo in the future. ( I am a software developer )
If I get a better chance at another company, I am thinking the current salary might be considered by HR at my potential next job when negotiating for the salary. It is important to make my salary look as big as possible so that is why I decided to go with option #2 when I joined the current company.
Also, I have been quite lucky and doing well with my personal investments with NISA (not the tsumitate one) for the last 3\~4 years as well. (overall went up about 80\~90%) I don’t know how long it would last but my intention is to keep investing with NISA every year. (investing 240 Man yen yearly)
With my 3\~4 year experience, I think I could invest better and more flexibly than the Company DC for now. ( Idk. I would change my mind in the future but hopefully not. haha )
I would appreciate if anyone could give me any advice.
by Significant_River_53