Changing Japanese View of Retirement

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Deciding to retire early, just before I turned 50, certainly makes me a bit counter-cultural in terms of expectations for how long one works.  I have estimated before that only about 1 in 20 workers (5%) in the United States retire at 50, and the average age of retirement is sixty five. 

Since we are traveling right now in Japan (I am writing this on a 200 MPH train between Tokyo & Kyoto), I was interested in sharing this Bloomberg article published yesterday in the the International Japan Times titled “Sixty Seen As Too Young To Retire In Aging Japan”.

The article starts by telling the story of Hiroshi Suzuki, who initially retired at age 65, went back to work almost immediately (he’s now 72) and thinks that ““People in their 70s can still work” and that “there’s no need to think about retiring until you turn 80.”  The article  goes on to say that “Japan’s demographic reality is so extreme that even though it has the highest proportion of working seniors among developed countries, it’s not nearly enough to stem the labor shortage.” 

The outlook over the next 20 years is even worse with another with another 5% of workers aging past 65.  “To avoid such a shortage, the country needs to come up with more innovative policies to pull seniors into the workforce.”

Since the Japanese have one of the longest lifespans of any developed country, perhaps this attitude isn’t surprising.  “People in Japan have long, healthy lives, and laws and company policies in the country have not kept up in terms of making use of their longevity,” says a professor quoted in the article ,“Age 60 is still very, very young in Japan. If you want to tackle this issue you can’t just have people work longer, you need to rethink the whole HR system in Japan.”

About 81 percent of Japanese companies still set the retirement age at 60.  Because raises are often tied to seniority, companies historically have encouraged people to retire at that age.  Curiously, in April 2013 the Japanese government changed employment rules “to require employers to keep on all workers who want to stay until age 65” but under a policy that allows them to pay a lower wage — “often a much lower wage.”  On average, 27% less!

Isn’t that a bit strange to read?  That Japanese companies are permitted (even encouraged) to actively discriminate against older workers by paying them less?  Isn’t it strange that the society would accept the idea that your wages should be less when you are between ages 60-65?  World travel always challenges your thinking about what is right and wrong in this world, but frankly I am a bit shocked at these Japanese government labor policies.  They really run against the grain of what people would think is acceptable in the United States.

One of the most interesting aspects of world travel is how it challenges your notions about how society ‘should’ operate. In learning about other countries and the choices they make, using different cultural, economic, and legal frameworks, you open your mind to new ways of thinking.  The differences highlighted in this article – that it is good to work into your late 70s because society needs you, but it is OK to pay older workers less – aren’t differences I would particularly subscribe to, but were interesting to read about.

What cross-cultural differences about early retirement have you seen (or read about) in different parts of the world?

Image Credit: Pixabay

20 thoughts on “Changing Japanese View of Retirement

  1. That is really interesting and unfortunately I don’t have any experience to share from other cultures. It is one I will look out for as we begin our travels next year. It would be interesting for you to talk with some older folks in Japan to find out their thoughts on this. Maybe they are OK with the pay decrease because they earned more during their most “expensive” years with kids? (No idea there – just a guess!)


    1. World travel opens your eyes. Few of the older Japanese we have encountered seem to speak English. I do see a lot of older folks working in restaurants, as taxi drivers, etc.

      Liked by 1 person

  2. Definitely reads as strange to me that they would view older workers that way. I read that in China, retirement age for women is 52.5 and men was 55 (if I remember correctly), and the Chinese friends I’ve met who are my age always seem to have retired parents. Of course, their economy is quite different than ours and a far higher percentage of women work after having children (I think 80 or 85%), for financial reasons. The retired grandparents often care for the grandchildren. I’m sure there are many exceptions but this is the picture I’ve gathered from reading stats and talking with friends.

    Liked by 1 person

    1. In China it is almost always “GrandCHILD” not Grandchildren”. You are right that they often help out, while Mom goes back to work. According to Wikipedia: “The retirement age in China currently is 60 for men and 55 for female civil servants and 50 for female workers.”


  3. In Europe the retirement system is centralized and … is at 67 years old. There are still a lot of people that reached an early financial freedom , that are working several hours daily, or are doing volunteering. My idea is to have my own company with an passive source of money to pay me for periods where I have no contracts (and as me there are thinking several people).
    Or people that just rent their houses in London and moved to Spain (and with the Brexit they might be forced to … restart to work 😀 )

    I think even in China we can find a solution. Just to want this 😉

    Statistics see:


  4. It will be fascinating to see how their well regarded universal health care system copes with an ageing population and economic headwinds facing Japan.


    1. Yes – healthcare is critical as folks get older. I’ve seen a great number of older Japanese in relatively physically demanding jobs when we’ve been here.


  5. Older people already have it pretty hard – they don’t get taken seriously, dismissed almost like children.. Considering how 60 is now no longer “elderly” in most places that is utterly shocking that the Japanese government did that, it’d be interesting to know how old all the CEOs and politicians are – in Australia they are often pushing 60 themselves.

    In general we need to give older people more credit, they were once the “us” of their generation – and when we get to that age we all want to be respected and still seen as worthy humanbeings.


    Liked by 1 person

    1. Yes, I agree Jasmin – the technology and high standard of living we all enjoy today is a result of the work of older folks throughout their careers.


  6. The “it is good to work until” is actually consistent with US beliefs. Work is perceived as being a contributing member of society. Not working, when you are capable of it, is looked down upon. I’ve gotten some of that belief with my early retirement….the “you’re too young to be retired” impling that you should still be working & contributing. But the legalizing of lower wages, and in Japan where age is more revered, is shocking! I wonder how retirement savings is doing in Japan? How many of those older workers actually still need the financial compensation? While among the FIRE community, where every one is actively thinking about savings, this is not the norm. It frightens me at times how many people (even friends and family) do not have retirement savings, and will be either continuing to work for many years or curtailing their lifestyle severely in the future.


    1. The economy in Japan has been tough for quite a few years, so I would guess that some Japanese have had even a harder time saving for retirement. Over the last 10 years the S&P 500 is up 65%, but the Japanese N225 is only up 3%.

      Liked by 1 person

  7. Enjoy Japan, I absolutely going to that country. Have been quite a number of times for vacation as well as work travel.

    A lot of Japanese people still have the old traditional mentality of working for the same company for their entire working career. Through my work, I have met quite a number of Japanese people that worked for 20 years or more in the same company. To them it’s honourable to “serve” the same company for a long time. It’s interesting to read that companies pay older workers less to effectively force them to retire. I’ve also heard that many Japanese companies often hire young graduates for a specific job and when the graduates accepted the job, they were told that the position is really a temporary position with less pay and long work hour. Many of them are forced to take these low pay long work hour jobs so they can get a foot in the industry. Pretty messed up if you ask me.


    1. That would be an awful way to start your career – with a bait & switch. We were surprised how many office workers appeared to be heading to & from work late at night or on the weekend.


      1. I know a few Japanese ppl that work in high tech that have the following work hours: get to work around 9 AM, leave work around 11:40 PM to catch the last train. I’m not kidding!


      2. We looked up “average hours worked by country” and Japan was actually below the US and the OECD average. I was surprised. They must take longer vacations. Beautiful country though.


      3. Interesting, maybe as a whole they work less than the US but certainly in high tech they work very long hours.


  8. Fascinating example of “age discrimination” in practice, though I imagine that could actually keep more people in the workplace. It’s frowned upon to say it out loud in the US, but most employers probably do find that a sharp 50-year-old is more valuable than a more experienced 65-year-old, if only because of differences in skills and energy level.

    As you said, traveling can be such an eye-opener about all sorts of things. The behaviors and customs we’ve been trained to see as normal or appropriate are definitely not universal!


    1. The Japanese economy has struggled for a long time. They need people working and people are challenged to retire with low-growth investments.


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