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rxk22
Joined: 19 May 2010 Posts: 1629
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Posted: Mon Feb 29, 2016 10:38 pm Post subject: Why don't you invest? |
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I watched this video, and taking the little bit it had to say, I applied it to my current situation. I am an American living in Japan. I invest on my own, as I don't believe that the pension system will be enough to live on when I retire(the video talks about how pension schemes in Europe and Japan are probably not safe).
I have read multiple times how Americans don't have enough saved up for retirement, and that's with 401ks being widely available. Here in Japan, I don't think any of my foreign co workers has any real meaningful amount saved up in investments.
Basically the longer you own stocks, the less risky they are, as the gains average out, and you end up with a historical 8% or so annual gain. This is with data from 1875 btw. Everyone should sock away some money, but a savings account isn't a viable investment, esp as of late. You really need stocks, and a few bonds. Buy some S&P Index Funds and forget about it.
I only say this, as so many of us here live in a bubble We have few people telling us life advice, as we can get by without anyone saying anything negative about our lifestyles. Be it diet, money usage, food/drinks.
I implore you, save up, and invest. Sooner or later you will be old, and if you have no investments, you may never be able to retire. I can't remember but the Japanese pension system doesn't pay well now, wait 20 years and it'll be worse. The US Social Security only pays an avg of $16,000, really not enough to live off of.
Food for thought. Wish you all the best |
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Rooster.
Joined: 13 Mar 2012 Posts: 247
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Posted: Mon Feb 29, 2016 11:16 pm Post subject: |
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Does anyone know what the Japanese pension pays a year? |
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izmigari
Joined: 04 Feb 2016 Posts: 197 Location: Rubbing shoulders with the 8-Ball in the top left pocket
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Posted: Tue Mar 01, 2016 1:11 am Post subject: |
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The US Social Security only pays an avg of $16,000, really not enough to live off of. |
While rxk22's plea to save is valid and, I believe, genuine, his number crunching does the OP and readers of this blog a disservice. In other words, it's too simplistic and, in so, misleading.
The OP should have noted that, first, you need to put in 40 "quarters" (10 years) to even vest in SSI. Then OP failed to mention that you can "retire" early (at 62...this would be opted by parasites such as Nancy Reagan) or retire late (at 70) as most of us would...but the good news is the longer you pay, the larger your pension. At the ripe age of 57, at the moment, I'll get USD 15,024 & 17,060. While this may seem in line with the OP's suggestion, I should add that I didn't pay a dime into the system for most of the years between 1985 - 2010 and the most I ever earned annually before that was USD 9000. So what we have is well below the poverty-line before 1985 and nearly nil between then and 2010, some 25 years. I'm more fortunate than most as I'll have my government pension and government-managed Thrift Saving Plan to supplement that...I'm guessing USD 60 - 75K when I retire at 70 (Inshal'lah!)
So, yes, get to saving (you'll save much more in the ME where you can still get those intangibles such as airfare, housing, kiddies' tuition, etc.) while you can and, if American & plan to return pay into SSI:
https://www.ssa.gov/international/Agreement_Pamphlets/japan.html
It's never too late!
Kudos to rxk22 for starting this important thread! My apologies to die-hard Republicans for referring to the former First Lady to what she actually is. |
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kzjohn
Joined: 30 Apr 2014 Posts: 277
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Posted: Tue Mar 01, 2016 6:39 am Post subject: |
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izmigari--thanks for that link! The particular point for me is:
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You do not have to do anything to have your credits in one country counted by the other country. ... If Japan needs to count your U.S. credits to help you qualify for a Japanese benefit, Japan will get a copy of your U.S. record directly from the Social Security Administration when you apply for the Japanese benefit. |
I had been thinking there would be lots of paperwork and hoops to jump through, and while there might be some, this makes it look easier. (I don't need the credits to qualify, but maybe my few SS credits will boost my payout a thousand yen, or more.) |
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rxk22
Joined: 19 May 2010 Posts: 1629
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rxk22
Joined: 19 May 2010 Posts: 1629
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Posted: Tue Mar 01, 2016 6:50 am Post subject: |
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Rooster. wrote: |
Does anyone know what the Japanese pension pays a year? |
Good question https://www.nenkin.go.jp/international/english/nationalpension/nationalpension.html has a weird formula.
I saw on TV a while ago, the Avg was around 70,000 yen a month, and the better pensions were 210,000 or so. Really not enough to live off of, even if you have your house paid for. I know people with Condo fees that are 30,000 a month, so 70k isn't much.
Gotta save and invest those yen/pennies
edit hee it is The full basic pension for 2012 was JPY 786 500 per year, corresponding to 16% of
average worker earnings. The basic pension is price indexed.
http://www.oecd.org/els/public-pensions/PAG2013-profile-Japan.pdf |
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RustyShackleford
Joined: 13 May 2013 Posts: 449
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Posted: Tue Mar 01, 2016 8:45 am Post subject: |
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[quote="izmigari"]
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So, yes, get to saving (you'll save much more in the ME where you can still get those intangibles such as airfare, housing, kiddies' tuition, etc.) |
So true.
Managed to squirrel my way into a position without rent, utilities and still a fairly good salary and the company is gonna pay for my flight to Tokyo this year and my flight back to the states the next inshallah. |
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kzjohn
Joined: 30 Apr 2014 Posts: 277
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Posted: Tue Mar 01, 2016 1:02 pm Post subject: |
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I was thinking max was 66,000/month, so that 786 sounds spot on. |
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rxk22
Joined: 19 May 2010 Posts: 1629
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Posted: Tue Mar 01, 2016 10:31 pm Post subject: |
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[quote="kzjohn"]
rxk22 wrote: |
I was thinking max was 66,000/month, so that 786 sounds spot on. |
That is still basically nothing, that would leave you impoverished.
I still haven't met a foreign teacher here, who is/was a teacher who invests. It's scary, as we EFLers here age poorly. Most jobs don't want someone in their 50's yet you hit 60, 65 and you'll never get a job.
If you haven't invested, you may find yourself without many good options.
BTW, with oil prices crashing, is the ME still a good place to teach? Saudi Arabia, and others having been cashing out their sovereign wealth funds. I bet a lot of benefits are or will be cut very shortly. |
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izmigari
Joined: 04 Feb 2016 Posts: 197 Location: Rubbing shoulders with the 8-Ball in the top left pocket
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Posted: Tue Mar 01, 2016 11:13 pm Post subject: |
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rxk22 wrote: |
Well Izi, that is a weird reply. |
Sir! I am humbled by your praise!
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I didn't say that you would retire off of SS. I said that even with SS, you would not make enough to live comfortably. |
You implied it. IT in fact, is the only thing that you attached a monetary value to.
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Anyhow, you have a nice politicalized and odd post. Thank you........? |
Written like a true Trump supporter!
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Wish you all the best |
I, too, wish you all the rest!
Last edited by izmigari on Wed Mar 02, 2016 12:25 am; edited 1 time in total |
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kzjohn
Joined: 30 Apr 2014 Posts: 277
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Posted: Wed Mar 02, 2016 12:09 am Post subject: |
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One other thing in the background of any pension talk is 退職金. Of course this severance allowance can vary widely, but it still is a factor. This is taxed favorably within Japan, tho as unearned income for US filers (so no foreign earned income exclusion). |
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Rooster.
Joined: 13 Mar 2012 Posts: 247
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Posted: Wed Mar 02, 2016 12:36 am Post subject: |
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That's paltry. You can't do anything with that. |
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rxk22
Joined: 19 May 2010 Posts: 1629
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Posted: Wed Mar 02, 2016 9:12 am Post subject: |
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kzjohn wrote: |
One other thing in the background of any pension talk is 退職金. Of course this severance allowance can vary widely, but it still is a factor. This is taxed favorably within Japan, tho as unearned income for US filers (so no foreign earned income exclusion). |
How many EFLers here get a retirement/severance? I bet not even 1% do. I get it from my current job but that's a rarity.
You gotta save and plan to live off your own money. Otherwise you may never be able to retire. Frightening |
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kzjohn
Joined: 30 Apr 2014 Posts: 277
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Posted: Wed Mar 02, 2016 11:01 am Post subject: |
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rxk22 wrote: |
kzjohn wrote: |
One other thing in the background of any pension talk is 退職金. Of course this severance allowance can vary widely, but it still is a factor. This is taxed favorably within Japan, tho as unearned income for US filers (so no foreign earned income exclusion). |
How many EFLers here get a retirement/severance? I bet not even 1% do. I get it from my current job but that's a rarity.
You gotta save and plan to live off your own money. Otherwise you may never be able to retire. Frightening |
Sure, no problem with that, and generally I agree--you need to do it on your own and plan to live off your own money to be assured about your future. It would be foolish to do otherwise.
I think we live in different demographics. Most teachers I know (private uni) do have an added pension (私学共済) besides just the public one, if they have enough years to qualify (SS history/credits in the states can help with this). Most of them are saving, in addition to that.
Tho the final numbers could vary, I think I'll be getting about 16万/month (between the two systems, detailed elsewhere here), which pretty much covers my monthly expenses.
No, I won't be living large (not like MATesol, whoever that was), but it will let me get by.
Kids are raised and (almost) gone, uni expenses for them in the rearview mirror (one more year for the younger one). (and public uni here is an amazing deal, tuition-wise)
Rather than 1% of EFL-ers getting severance, in my demographic it's more like 60% or so. There are a lot of full-timers who never set foot on a board like this (they don't have to), so the sample here is skewed. Most people I know are saving/investing, and have been doing so for years. ((I'm not sure you'd call it an investment, but most own houses.))
So yeah, to be safe, you have to save and invest and do it on your own. That's common sense.
***
Separately, one thing I would advise investors against is any of the many "offshore" plans/schemes that you may come across. Whatever they may be selling you on--"portability" or "tax efficiency", these folks are scammers pure and simple.
Huge fees and many restrictions/headaches. Buyer beware! |
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rxk22
Joined: 19 May 2010 Posts: 1629
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Posted: Wed Mar 02, 2016 10:34 pm Post subject: |
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I work at a private school, and I have the same pension, and I get the severance package. I haven't ever met anyone else that gets that. I never talk to college profs, outside of here. I also don't run into too many private school teachers.
ALTs, and Eikiawa workers don't get a severance, heck most don't even get benefits of any kind. I do believe that the college and private schools teachers get severance, but I think that ALTs and the such are here in a much larger number. They also are the most vulnerable. Less money means less ability to save..
I wouldn't call owning a house investing. Esp in Japan, as the house it's self loses value rapidly. It is more like owning an asset, like a car. When compared to renting, saves money in the long run.
Oh yeah. NEVER offshore your money. That is asking for problems. I read a while back when they were talking about Mitt Romney offshoring his money. It is worth doing, but not unless you have tax lawyers and and millions of dollars. Otherwise at best you have a massive headache. Or as you said, walk into a scam. |
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