Retirement Anxiety in Japan: The Super-Aged Society's ¥20 Million Problem

From Tokyo's corporate towers to Osaka's entrepreneurial streets — how the world's oldest society confronts retirement

December 2025 · 10 min read

Japan is the world's most aged society: 29% of citizens are 65 or older, rising to 35% by 2040. A 2019 government report suggesting couples need ¥20 million ($130,000) beyond pensions for a comfortable retirement — quickly withdrawn after public outcry — crystallized Japan's retirement anxiety. The pension system, designed when life expectancy was 65, now supports retirements of 25-30 years.

Japan's Pension System

Japan has two main pension pillars: Kokumin Nenkin (National Pension) for all residents and Kōsei Nenkin (Employees' Pension Insurance) for employees. The national pension provides a flat-rate benefit of approximately ¥65,000/month for full contribution periods; the employees' pension provides earnings-related benefits on top. Corporate pension plans (DB and DC) supplement for many workers.

The iDeCo Revolution

Japan's individual defined contribution pension scheme (iDeCo, 個人型確定拠出年金) has grown significantly, allowing workers to contribute up to ¥68,000/month pre-tax. iDeCo assets grow tax-free and can be converted to annuity income at retirement. The scheme is seen as crucial for Japan's 'self-sufficient retirement' agenda.

NISA and the Retail Investment Push

Japan's New NISA (introduced 2024) significantly expanded tax-free investment allowances to ¥3.6 million/year in growth investments and ¥1.2 million/year in regular investments. The government is actively encouraging Japanese households — who hold enormous cash savings in low-yield accounts — to invest for retirement through NISA.