If many Americans leave to work there every year, it is not a conventional choice to retire in Japan. It must be said that it is not the most accessible destination: located more than 9,000 km from the US, requiring a mastery of its language, or else you will not be able to integrate. Reconciling retirement and expatriation is an extraordinary adventure.
But for those who manage to do so, it offers an enjoyable and reassuring living environment between tradition and modernity.
Retire in Japan: Less Advantageous Regime Than the US
Japan’s relationship with retirement is very different from what is known in the US. In this country, where the population is among the oldest in the world, taking care of and living with one’s elders is the norm.
This solidarity is essential because if a universal system of retirement by distribution composed of a basic plan and a compulsory complementary system (kokumin nenkin and kosei nenkin hoken) has existed since 1959 in the country, its pensions are much less advantageous than in the US. There are supplementary pensions, but many pensioners combine work and retirement.
This system is reformed every 5 years to adapt to the economic situation: as longevity increases, the Japanese are strongly encouraged to continue working until 70, which is culturally well-perceived.
Contributing to Your Retire in Japan When You Are an Expatriate
Expatriates in Japan contribute to the country’s compulsory old-age insurance system. In theory, an American-Japanese social security agreement exists and allows a cumulation of the years contributed in the US and Japan (totalization request).
But in reality, this can be pretty complicated to obtain, especially since the minimum contribution period for retiring in Japan is 10 years, a period that very few expatriates reach.
To limit this inconvenience, it is possible to get a refund of the contributions paid during the expatriation at the time of leaving the country or to apply for a contribution exemption upon presentation of proofs, which will avoid the reimbursement process at the time of departure.
Be careful, however: this reimbursement is a lump sum and does not always cover the total amount paid.
Expatriates who wish to contribute more efficiently to retire in Japan during their expatriation can join the voluntary old-age insurance. This way, they will avoid any loss of quarters.
However, this solution has a high cost that must be considered when subscribing.
Health Care for Expatriates Retired in Japan
The American-Japanese social security agreement does not provide for any measure allowing expatriates to be reimbursed for their health expenses if they retire in Japan. In order to benefit from coverage in Japan, it is, therefore, necessary to take out international health insurance with a company specializing in expatriation.
Of course, such coverage has a significant cost and will be more expensive the more protective it is. Still, it is an essential precaution, especially when you have reached retirement age, where follow-ups must be more regular, and care can be more frequent.
The main health insurance solution to retire in Japan is a subscription to insurance at the 1st dollar.
This type of insurance not only allows you to benefit from very interesting reimbursements for your health expenses:
- Routine care
- Repatriation insurance
- Coverage of health care during temporary stays in the US
Contracts are managed entirely in the US and offer benefits such as access to advisors and online assistance, partner healthcare networks, and free medical advice.
This type of coverage, far from being superfluous, is generally excellent value for money.
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