Work forever: Japan’s seniors brace for life without retirement (2024)

FAQs

Is retirement mandatory in Japan? ›

A 2022 survey by the Ministry of Health, Labor and Welfare found that 94% of Japanese companies had a retirement age. Of them, around 70% set the official cutoff at 60. But companies are required to keep the workers employed in some form until age 65 if the individuals wish.

The scale of social security benefits in Japan reached ¥121.3 trillion in fiscal year (FY) 2018 or 21.5 percent of GDP. The breakdown is about 50 percent for pensions, 30 percent for medical subsidies, and 20 percent for welfare, which includes long-term care for the elderly.

The main reason for this is that there is no specific provision for employment conditions in the case of continued-employment: if the mandatory retirement age is raised, the contract under which a worker is hired as a regular employee must be extended until that later mandatory retirement age.

According to figures released by the Ministry of Internal Affairs and Communications, the proportion of Japan's elderly, defined as age 65 and above, is also at a record high, comprising 29.1% of the population – the highest rate in the world.

There are no fines for people that pay late, even after the final notices. However, the Japan Pension Service has the authority to take money directly from bank accounts or seize property. So, you can't ignore their messages unless you are in for big surprises.

The public pension system has two tiers: a basic, flat- rate scheme and an earnings-related plan (employees' pension scheme). All people aged between 20 and 59 who live in Japan are covered by the basic pension scheme.

The annual pension amount of the Old-age Basic Pension is 777,800 yen (as of April 2022) if the premiums have been paid for 40 years from age 20 to age 60.

The pensionable age for the Old-age Basic Pension is 65 in principle. However, you may opt to receive pension at whatever age after 60.

“It is no secret ageism is very common in Japan, and while most just think hiring younger means cheaper—and, you can pull more work out of them—there can be valid reasons; mainly team communication and understanding of the product.”

Why is aging a problem in Japan? ›

High life expectancy

As Japan's overall population shrinks due to low fertility rates, the proportion of the elderly increases.

The average salary in Japan is 6,170,000 Japanese Yen (JPY) or 45,453 USD per year in 2023 (as per the exchange rate in May 2023). In this article, we'll explore further details surrounding the average salary in Japan and the factors that influence it.

In general, Japanese people are kind and courteous to older people, when speaking to an elderly person they add an extra element of respect by adding their “san” after their name they also use a certain way of communicating politely called “keigo”.

Under the Japanese Civil Code the minimum legal age of marriage is 18 years for boys and 16 years for girls. A person who is under 20 years of age cannot get married in Japan without parental approval.

The retirement age of 65 is adopted or being scheduled by most companies and public organizations. There is also a tendency to reemployment after the retirement at 60 years old.

Other than holiday, pension, health insurance, nursing care, unemployment benefits, and certain maternity and paternity benefits, all benefits are at the employer's discretion in Japan.

Pensions in Japan. To get a full basic state pension (老齢基礎年金, rorei kiso nenkin), you'll need to have made contributions for 40 years. That said, partial pensions are available to those who've contributed for at least 10 years. In 2023, the full basic pension totals ¥795,000 (equal to €5,112.47) a year.

The data on effective retirement age, which is most frequently quoted for an international comparison, show that the average effective retirement age for Japanese males is 69.5 years and for females is 66.5 years.