I’m (25F) moving back to Japan as a graduate student this fall. I know I could waive my pension payments, but I’m curious how much cheaper it is to pay in advance. The websites vaguely say “we offer discounts for advance payments of multiple months.”
Is it significantly worth it? I do want to take advantage of the pension plan eventually, as soon as possible. I could get an extra job this summer if it’s worth it, or just wait to pay and catch up if it’s not.
3 comments
If paying 12 months at once then… If paying cash or credit card the discount is around 3,500.
If paying by withdrawal from bank account the discount is about 4,500 yen.
If you paid two years at once the discount is about 15,000 yen.
Setting up payment by credit card or withdrawal from bank account needs an application process.
To my understanding, exempted months have a 10 year grace period to pay (as opposed to the normal 2 year period to pay missed pension payments)
– National Pension premiums are a tax deductible.
– you will be a student with no income/very little income.
Meaning the best way to optimize this is pay the exempted months within the 10 years, but at sometime in the future when your earning full-time salary. That way you will reduce your future taxable income for the year you pay them in the future.
Meaning the income tax bill and resident tax bill for that year in the future will be significantly cheaper… likely cheap than the discount you will get from paying them all in advance. With the added bonus you can then invest the money between now and the point in the future you pay them.
About a month’s payment cheaper for 2 years in advance but it took us over 6 months to be able to do it so we ended up paying monthly until the next 6 month opportunity, then for 6 months (with the smaller discount), then for 2 years. It’s Japan so it’s a crazy system of course.