Early Retirement Checklist

[Moneymatters]

So.. I saw an opportunity and proposed my own role for corporate restructuring..
If accepted, it's a year earlier than when I was hoping to quit but the additional payout will more than cover the accelerated timeline.
Expect I'll hear if successful or not very soon then will have x months to transition. The assumption is I won't be looking for other full time work.

Here's my pre-retirement checklist:-
1. Request to stay under company insurance scheme for 1 year?
I understand this is typically advantageous. Any resources about this?
(Specifically the paperwork side as my employer is best described as neutral chaotic in all matters regarding employment admin..)
Any reason to stay on company insurance for a second year?

2. Set aside funds for however much Resident tax is still owed.

3. Ensure I'm registered to start paying kokumin Nenkin.

4. Change iDeCo plan from employee to self employed (Class 1?)

5. I have two credit cards (SMBC Prestia and SMBC Trust) with high limits but is it worth me getting another card just in case?

6. I won't be eligible for unemployment insurance allowances so hope to negotiate an additional payment of some sort instead.

So what else am I missing? (Please assume I've put insufficient thought into this.)
PR holder. I'm not using my work email for any private accounts/recovery emails.
(Well. Linkedin but that would be deleted the moment this is confirmed.)

[TokyoWart]

If your company is paying for your tax preparation services you might ask that that continue at least for the final year that includes some income related to your employment. I think the most difficult thing I will face when I leave my employer is extracting all of my email contacts or communications which go to my work email address but should instead be going to my personal email.

[RetireJapan]

1. Request to stay under company insurance scheme for 1 year?
I understand this is typically advantageous. Any resources about this?
(Specifically the paperwork side as my employer is best described as neutral chaotic in all matters regarding employment admin..)
Any reason to stay on company insurance for a second year?

I did this. It was about 20% cheaper to stay on employer health insurance, even when having to pay the employee AND employer contribution.

From the second year had much lower income so kokumin kenko hoken was cheaper.

Not sure about paperwork. Our HR handled it (it's incredibly common so they knew what to do).

[captainspoke]

...it's incredibly common so they knew what to do...

Not only a good deal, it's the easy path, so one less thing to think about when everything else seems to be changing.

Someone gave me a copy of this when I was at that point: https://www.amazon.com/Turning-Sixty-Fi ... 450&sr=8-1

It's rated well, and while gave it a go, I ended up just skimming thru it.

[Nancy]

With the insurance though, if you have any dependents, two years is better. That way the dependent can have free insurance for the second year also. Your last pay check (or most of it anyway) goes to paying the local tax bill and the first half year or your health insurance. It was quite a shock to me.

[Moneymatters]

With the insurance though, if you have any dependents, two years is better. That way the dependent can have free insurance for the second year also.

thanks. I'll keep that in mind.

...it's incredibly common so they knew what to do...

Not only a good deal, it's the easy path, so one less thing to think about when everything else seems to be changing.

Someone gave me a copy of this when I was at that point: https://www.amazon.com/Turning-Sixty-Fi ... 450&sr=8-1

It's rated well, and while gave it a go, I ended up just skimming thru it.

thanks. Good to know this is a normal request..
It seems 健康保険の任意継続 is the term I was looking for.
https://www.financialdo.co.jp/reverse-m ... og/020024/

Thanks for the book recommendation.

[Tkydon]

1. Request to stay under company insurance scheme for 1 year?
I understand this is typically advantageous. Any resources about this?
(Specifically the paperwork side as my employer is best described as neutral chaotic in all matters regarding employment admin..)
Any reason to stay on company insurance for a second year?

I did this. It was about 20% cheaper to stay on employer health insurance, even when having to pay the employee AND employer contribution.

From the second year had much lower income so kokumin kenko hoken was cheaper.

Not sure about paperwork. Our HR handled it (it's incredibly common so they knew what to do).

Most people will have to make the choice and submit the paperwork to their Health Insurance Provider on their own WITHIN 20 DAYS of leaving the company. If you miss this deadline, you will no longer have the opportunity to continue coverage, and will have to switch to Kokumin Kenkou Hoken National Health Insurance immediately.

[Tkydon]

With the insurance though, if you have any dependents, two years is better. That way the dependent can have free insurance for the second year also. Your last pay check (or most of it anyway) goes to paying the local tax bill and the first half year or your health insurance. It was quite a shock to me.

If another Household member can get Health Insurance through their work, and add you to their Health Insurance, that may be the cheapest option.
It would effectively be free IF the Premiums for that person are already maxed out, but will incur additional cost if the premiums are not already at their maximum.

If you can continue with your own company's Health Insurance, the premium for the Household will be set at the premium on Exit, and remain the same for 2 years. This will probably be cheaper than the Kokumin Kenkou Hoken for the first year, and in many cases more expensive in the second year.

You have to remember:

1. The National Health Insurance - Kokumin Kenkou Hoken - Premium is payable in 10 Installments, NOT 12, and is payable from May to February with 2 months installment free. Private Health insurance is payable in 12 Installments... Remember that when comparing apples to apples...

2. The National Health Insurance - Kokumin Kenkou Hoken - Premium consists of Three Segments, which in turn each consist of Three Components. Each Segment has an Absolute Maximum Premium Limit.

a) Basic Health Insurance - Payable for All Household Members - Household Max. Y650,000

b) Latter Term Care for the Elderly - Payable for All Household Members - Household Max. Y220,000

c) Long-Term Nursing Insurance - Kaigo Hoken - Payable for All Household Members between 40 and 64 - This is included in the premium up until 64, but is then charged separately from age 65 and up... Household Max. Y170,000

Depending on where you live, each Segment consists of two or three components, which seem to be different by City, Ward, Town or Village...

i) Per Household Fee

ii) Per Person Fee (in the case of c) per covered person over 40. for the others, per covered person.)

iii) Percentage of the Previous year's Household Income.
This is based on the Total Taxable Income for the previous Tax / Calendar Year as reported in your Year End True-Up - Nenmatsu Chousei, or Tax Filing - Kakutei Shinkoku and is applied from May of the following year to February of the year after that. (Total Taxable Income divided by 10 installments, and the percentages applied (around 12% in total...)

https://www.kyoukaikenpo.or.jp/g7/cat330/sb3130/

Note the small print at the bottom. The percentages shown are for a) and b) combined.
※40歳から64歳までの方（介護保険第2号被保険者）は、これに全国一律の介護保険料率（1.60％）が加わります。
For 2024, the National Standard 1.6% Long-Term Nursing Insurance - Kaigo Hoken will be added per covered person aged 40 to 64.

It doesn't say, but it was confirmed in another thread, that the Long-Term Nursing Insurance - Kaigo Hoken will be charged separately per covered person aged 65 and over.

3. The Private Health Insurance Premium will be set based on your Income at Exit, and set for the 2 year term, whereas the National Health Insurance - Kokumin Kenkou Hoken - Premium will be reset every May to reflect the previous year's (final employment year's) income.

This means if you leave employment at the end of December 2023, your National Health Insurance Premium would still based on your Household's Total Taxable Income for 2022 for 2 months (Jan - Feb 2024), then based on your household's Total Taxable Income for 2023 for 10 months (May 2024 - Feb 2025), so you would expect to see the premiums drop significantly in May 2025 to reflect your reduced Household Income in 2024...

If you left employment earlier in the year, your Household's Total Taxable 2022 Income for the remaining months to Feb 2024 will not change, but your household's Total Taxable 2023 Income will be lower than if you worked the whole year, so depending on your household's situation, it will be cheaper, and it may be cheaper to switch to Kokumin Kenkou Hoken sooner or later...

You would have to do the calculations to determine the threshold for your household's situation.

And as Nancy said, you will still have to pay outstanding Residents' Taxes for the year Prior to leaving employment, as they are charged 18 months in arrears; for 2022 Income payable from July 2023 to June 2024, and for 2023 income payable from July 2024 to June 2025
If in employment, payable in 12 installments from payroll, but once no longer in employment, payable either in one Lump Sum, or in four quarterly payments (Jul, Oct, Jan, Apr). (These are also payable if you decide to leave Japan.)