How Much Can Japanese People Get in Retirement?

Japan's pension system is a multi-tiered structure, and the amount people receive after retirement varies greatly depending on their occupation and income. This mainly depends on which pension plan you've joined, as well as the length and amount of your contributions.

1. National Pension: Basic Coverage for Everyone

All Japanese residents aged 20 to 60 must join the National Pension (国民年金). This acts as a basic pension, with a relatively fixed amount. If a person has contributed for a full 40 years, they can receive a basic pension of about 68,000 JPY per month (approximately 3,000 CNY) starting from April 2024. This amount is for self-employed individuals, students, freelancers, and temporary workers who are not enrolled in the Employees' Pension Insurance. The amount will be reduced if the contribution period is less than 40 years.

2. Employees' Pension Insurance: A Perk for Salaried Workers

For full-time employees and civil servants working at companies or in the government, they must join the Employees' Pension Insurance (厚生年金) in addition to the National Pension. The amount of this pension is directly linked to an individual's salary level and contribution period, following the principle of "the more you pay, the more you get."

• Average Amount: According to data from Japan's Ministry of Health, Labour and Welfare, the average monthly amount for those receiving the Employees' Pension Insurance in 2024 is about 149,000 JPY (approximately 6,700 CNY). This amount includes both the National Pension and the Employees' Pension Insurance.

• Gender Differences: Since women's salary levels and years of service are generally lower than men's, the average amount they receive is also lower, at about 93,000 JPY per month.

• Severance Pay: In addition, many full-time employees at large companies and civil servants can also receive a substantial lump-sum severance payment upon retirement, which is separate from their pension. For example, the average severance pay for a civil servant is over 20 million JPY.

3. Temporary and Part-time Workers: Improving Treatment

In the past, many temporary and part-time workers were not eligible to join the Employees' Pension Insurance and had to rely solely on the National Pension, resulting in very small retirement benefits. However, the Japanese government has been expanding the coverage of the Employees' Pension Insurance in recent years, requiring temporary workers who meet certain conditions to also join. Despite this, due to lower salaries and unstable work, the pension amount they ultimately receive is usually still lower than that of full-time employees.

What to Do If Your Pension Isn't Enough?

For those whose pensions are not enough to maintain a basic standard of living, Japanese society offers various support measures:

• Public Assistance System (生活保護制度): This is a social welfare system similar to a basic living allowance. If a person's income and assets are below the local minimum living standard, they can apply for it. The government will provide funds to make up the difference, ensuring basic living expenses are covered.

• Corporate Pension Plans (企業年金): Some large and medium-sized companies establish separate supplementary pension plans for their employees, which are paid out in addition to the regular pension upon retirement.

• Personal Pension Plans: Individuals can voluntarily join personal pension plans like iDeCo (Individual-type Defined Contribution Pension). This is a long-term savings method that offers tax benefits, providing people with an additional source of income after retirement.