So as un-christmasy as this sounds, I’ve come to the conclusion that I’d like to return to my home country in order to retrain myself for a different career with the intention of coming back to the Japan in the future after possibly 1-2 years away.
My question is this: What should I do regarding Japanese pension? I know it’s possible to claim a full refund, but if I intend to come back later am I better off leaving it? Or better off claiming the money back?
Has anyone else here done this before? And is there any advice you can give?
3 comments
Are you financially disciplined, aggressively saving for retirement with a portfolio of diversified index funds that you never ever touch under any circumstances?
If so, assuming you’re young-ish, you can probably get a big enough return from cashing out your JP pension contributions and investing them, then buying an annuity (as necessary) when you’re old, to justify taking the money out. You’d definitely be taking on some added risk by giving up a government-guaranteed annuity, though.
Otherwise, don’t mess with it. Definitely don’t take it out if you’d just treat the money as more disposable income now.
First of all, it is very bold and IMHO a great idea to leave to retrain yourself.
I left for over 3 years and didn’t cash out. I’ve been back for nearly 10 years and have around 18 years in the system. It was absolutely no problem at all. Make sure you keep your little blue book.
If you already have 10 years of payments, leave it. You can start receiving payments when you turn 65, regardless if you’re in, or out of japan.
You can make the lump-sum withdrawal within two years of leaving Japan, so it’s not something that you need to decide right away.
That said, I would think about how sure are you that you will return someday. Your total coverage period needs to be 10 years (or more) to receive the ‘basic old-age pension’ from age 65.
So, if you’re ever sure that you’re not coming back, and do not have 10 years of coverage, then it could be wiser to withdraw the funds lump-sum.
If you’re certain that you will be back, and that you will to contribute a total of 10 years of payments (or more), then it could be worthwhile to leave it.