Japanese Pension

I don't think I can ever be happy with my paycheck after taxes and such. Knowing the fact that it could've been higher just makes it more depressing. ToT Oh wells, I still have money. ^o^

Get seriously depressed after seeing paycheck after Federal Tax/State Tax/ Social Security/401K/Health Insurance/Dental Insurance... Makes a grown man want to cry? Guess it's about 35% of my pay each week. Though it's probably the average around here.

Here in denmark taxes are quite high around 40% for a standard person + some health care and ohter stuff so like 45%, but as you start earning more money i can go as high as 65-75% or so i heard.

I do not mind though and i am very happy with the way society is build and what comes from the money that are payed in tax and most danes are, most people like em the way they are now, but some want them bigger (few) some want em lower (still low) and most want them just to stay they way they are, me including.

W00t no comments?
I'd rather have my pension done privately so at least I can sue the company if they mess up the money.

While I do agree that this is very very bad, specially in a country were so many people will be affected by that, it's nowhere near as bad as Brazil politics.

The list of problems about taxation, "disapearing" money, tax money spent the worst ways possible, and other stuff is just too damn long.

Corruption and distortions on taxes are so common in Brazil that even when people find out about this, people has got so brainwashed (given that it's not too hard to brainwash a country were the vast majority is composed by dumb uneducated and alienated people), that they won't take action even when the corruption is evident.

So, at least this is happening on Japan. People are aware enough to demand some action on this. Something that wouldn't happen on Brazil, unfortunately.

While we "have" Social Security to fall back on when we retire, it's more than likely not going to be there (or at least help very much) within a decade. You probably answered this in you Sole Proprietorship article, but if you have a work visa from an employer in Japan, can you legally setup a Sole Proprietorship at the same time?

Leo,
I confirmed with immigration and the tax office and the official answer was "yes."

But letting your employer know that you are doing other activities may not go down well with them - depends on how much of an open mind your employer has.
I always encourage my employees to do as much as they can outside of work to broaden their knowledge and horizons.

Here there is illegitimate way to deduct tax, and that's for real.

I haven't been working though so I've only heard it from my parents.

Social security here that will be useless when I grow old lol, need to invest in high yield investments or get some other method of income to help me when I'm old. I don't know if my kids will take care of me lol, maybe stick me in a home or something ;p.

The equivalent thing in Singapore is called a central provident fund....I suppose it's somewhat better than the Japanese system where you(could^_^") get nothing, but the disadvantage of CPF is that some of the money is impossible to take out, and is extreme;y restricted in usage. I like to think of it as the government getting a cheap loan from citizens.(Since the interest they pay you sucks)

Same thing. Our pension is slowing heading to the lands of no return

Thanks for the confirmation Danny.

I'm not quite clear on the tax rate in the United States, barely being employed at all, but I'd have to admit, it's depressing to see your pay stub and see the "before" column compared to the "after" column.

At the rate things are going I don't think my generation or some of the ones following will have Social Security. Meaning I can't sit on my lazy ass at 70 and play games/watch anime *cry*.
Oh well just means I really have to land a good job once I'm out of college.

from my personal experience, there's a tax for everything. i think we should all just move to antarctica, no one owns that right?

CPF is the bane of all Singaporeans. theres no garuantee that you'll live to the required age to get your $$$ back.

we will never get filthy rich short of robbing a bank here...

oh crap ... all the pay and pay in singapore is just as bad

In France, it is a bit like Japan: Retirement Pension is managed by Governement & Labors and financed by taxes on your monthly pay. To ensure a full retierement pension (let's say the average of the last 25 years), you have to work around 40 years. You will be elligible only after 60 to 65 (depending of your work) and governements try to lengthen the working time frame.

But there again, there are lots of exeptions, the so-called special status for civil servants, train/bus drivers etc ... where you can go in retirement much earlier and your pension is only calculated upon the last 6 month etc ... So when the governement tries to cancel those privileges and make it even for everybody (and spare the money to finance that), there are strikes. (Heard about strikes in France ? it happens sometimes ^^)

However, since there are more and more old people and less and less young working people (due to demography and babyboom in the 50s-60s) the pensions are currently paid now, by the working people. Since it will only get worst, you cannot be sure there will be enough working people to pay your pension in the futur when it will be your turn !
That is why I think the only solution is, in complement, to save money by your own with savings accounts or life insurrances...

For Singapore, ~20% of your salary is frozen for pension purpose or buying flat. It's called Central Provision Fund CPF. But there was recently a reform there again to lengthen the time frame and the reduce elligibility. As far as I know, lot of people are not very happy about it but no strikes in Singapore !
For me, since I am a foreigner, no CPF and no french pension T_T

Another American who is paying into SS but will never see a penny of it back. But it could be worse I could work for a union and be paying them dues on top of SS and still never see a penny of that either. Also I could have been working for some company like Enron and have been stiffed by my company after the heads ran off with all the money leaving me holding the bag.

In America it's just better and safer to heavily invest in yourself with IRAs, CDs, Tbills and your own 401K fund.

we have CPF of 20% here and you're assured of getting it..... if you manage to live long enough...
In addition, the withdrawal date seems to keep increasing with time so I believe I'll get mine at say 120? if I'm still alive.

some call it the Coffin Provision Fund as that's all you're gonna buy with it :p

Thou shall not steal...The Government hates competition XDDD

there are only a few countries that i know that has almost no corruption at all and these are Singapore and Canada i think ^^;;

I'm actually quite happy with our system. The employer contributes 9% of superannuation to your salary. For every dollar you contribute after tax, the government will 1.5x it up to $1000. So i put in $1000 and the government gives me an extra $1500. Plus i tend to add investments to it on the side of my job. Where it starts to get complicated is when you have too much money because there are limits that you are allowed to take out. But of course there are ways to get the most of your pension money.

No really related to pension; but the whole idea of money deductions; wages, taxes and the government have been an issue in Canada once; though it was about a few years ago; when a bloke (and several others - all politicians) were pocketing the people's tax money and all the money that would be returned or the money used on services were not provided. Pension here is simple and easy to get though; since we have a service called RRSP (don't know the meaning off); people can put money into that account and what not; and until they reach 65 they won't be able to touch the money. For people that work for the government; they get extra bonus to their pension; since they government are saving for them too (or something like that). Anyhow; I'd have end by saying peoples minds are always weak and hard to control when it deals with money; thus these activities would always one way or another occur if ther part of the government.

A small side story...

Here in the US we have what is called the Occupational Privilege Tax (OPT). This is a tax that gets taken out of your first paycheck when you start working here. The tax is about 10 USD and maybe not a big deal...unless your first job is working at a fast food restaurant and your first pay check is worth beans. As far as I know it is only a one time withdraw from your check, but it is still annoying nonetheless. Sometimes I think the government just comes up with random taxes to get our money -_- .

Just thought I would share that little tidbit of information with you all.

Ours is CPF (Central Provision Funds) deductions and it'll be accounted for so after you retire you'll be able to get either abit of it out every month or get 50% out first.

I read about this on the bbc news website. You know that things look really bad when you have an article on the bbc site for it. Not quite on the same level as the collapse of Novagroup tho, but potentially very very bad. But at least they still have time to sort the mess out.

Reading about the japanese issues with pensions reminds me of our own pension system here in Sweden. Since the 60's there was the system known as ATP, where you'd get 80% of the average income of the ten best working years of your life. So you could basically be unemployed for all your life, earn a million a year for ten years and end up with 800k in pension. Alot of people realized even back when this system was introduced that it wasn't going to work, since it assumed that the amount of working people in the population would always increase, and these people would pay for the pensions of their parents generation. Anyway, in 1994 the system was replaced with a new system (after the government had withdrawn 700 billion SEK from the pension funds to help balance their budget), where you earn pension points depending on the year you work, and this will decide how high your pension is. This system is better, since it doesn't assume anything about future generations and you pay your own pension. The issue is that we now have people who have to pay for both their own and their parents pensions. The previous prime minister of Sweden even said that "I'm sure that twenty years from now when people realize what we've actually done they will hate us for it."

When (or perhaps if) I retire, I'd be surprised if I'll even get a dime out of the system, in the name of fairness I'm sure I'll just get to pay a ton of money into it and never get any of it back. Fairness, in the minds of most swedes, is that everyone ends up with the same amount of money. It doesn't matter what one has done (or hasn't done) to get said money, as long as someone has more than someone else it's unfair.

Here in Germany - where I currently live - tax and especially health/social insurance rates are quite high - up to 45% for an unmarried person. On the other hand the system does provide quite well, although every year a little more gets pruned back and I'm not very optimistic about the pensions situation.

Personally I do mainly freelance work (sole proprietor equivalent), which provides a certain room to maneuver when it comes to optimising one's tax liablities.

if that kind of thing happened in malaysia, a riot will occur everyday.

The Japanese government has already wasted a lot of that money, which is why there isnt much left for the hard working Japanese work-force.

On the other hand, check this out:

http://video.google.com/videoplay?docid=-3704527408635856046&q=benjamin+fulford&total=35&start=0&num=20&so=0&type=search&plindex=1

The same kind of thing is happening in the US. It was supposed to be "Social Security"... which is for retired people to be secure and have income to live. I have paid countless thousands into this Government managed fund, and it wont exist when I retire. Thats why I have a 401(k) and Roth and regular IRA's, Mutual funds, and stocks. The government can afford to take care of me when Im older.... so I get to pay for the prior generations blowing their money.. and I HAVE to be fiscally responsible.. Bastards.

I think the problem is the same everywhere. Screw to whoever thought about starting this kind of setup in the government. I'm just glad that the place I'm working for makes some adjustments into our monthly wages to significantly reduce the amount of deductions every amount. :D

I guess i need to depend on my 401 K instead of social security. Cant always depend on the gov to watch over you.

Tax in Malaysia is typically 28%, too much to pay for big company. Europe countries like Denmark have the highest tax as their pension will be release back to them when they reach retire age & the gorvenment take care of the jobless (Correct me if i wrong). I used to owned a Hong Kong company (18%, no tax for ovesea income), Berlis & BVI corporation to channel the funds back to Malaysia with tax exemption. Good to consult a legitimate CPA for good advices.

This is really a nice articel.