Nearly 90% of salaried workers in Japan choose to continue working after retiring at age 60. However, after the age of 60, many people worry that they will not be able to maintain their motivation. One of the reasons for this is that wages drop sharply at age 60, and how much does the salary of office workers decrease around age 60?
The retirement age is an opportunity for salaried workers to face a significant drop in wages
With the advancement of "super-aging" in Japanese society, companies are working to create an environment where they can work for a long time. According to the Employment Stability Law for the Elderly enacted in 2013, companies are obliged to ensure employment until the age of 65 from April 25, and the revision of the law also requires efforts to ensure employment until the age of 70.
An increasing number of wage earners are continuing to work after retirement at age 60, such as continuing to work as temporary or contract employees at their former workplaces, or re-entering the labour market, in part because of these improvements in working conditions.
Although there are various backgrounds, such as "I feel a sense of purpose in life in the work itself" or "I want to earn an income until the age of 65 and pension benefits begin", many people choose to "work while they can work" because they often hear bad rumors about pensions.
According to the "Employment Status Report for the Elderly" issued by the Ministry of Health, Labour and Welfare, 87.1% of the 379,120 employees who reached retirement age in the past year (June 21~May 22) were 60 years old.
However, after retiring at the age of 60, it is not easy to face work as positively as before. Salaries will be drastically reduced after retirement, and loss of motivation is inevitable.
So, how much will salaried earners actually decrease when they retire? The average salary of Japanese university graduates and male office workers (full-time employees) is 235,800 yen (about 11,505 yuan) per month in their early 20s, and the estimated annual salary is 3.48 million yen (about 169,796 yuan). Wages increase with age, and the monthly income of those in their 50s reaches 525,700 yen (about 25,649 yuan), and the estimated annual income is 8.57 million yen (about 418,147 yuan).
However, when you reach your 60s and are no longer a full-time employee, your monthly salary is 323,499 yen (about 15,000 yuan), and your estimated annual salary is 4.9 million yen (about 239,080 yuan), which suddenly drops to the salary level of your early 30s. If faced with such a salary cut, it is no wonder that the motivation to work is lost.
Motivation after age 60
Retirement at age 60 faces a big pay cut, and it is acceptable to be able to afford it, but in some cases, the salary drop is more than expected, and life becomes difficult. It is quite painful to worry about the cost of living for five years in a row before starting to receive a pension.
In this case, although it is possible to rely on the "Pension for Continued Employment of the Elderly", that is, the Japanese employment continuation allowance system for the elderly: general insured persons between the ages of 60 and 65 who have been employed as insured persons for employment insurance for more than 5 years are allowed to receive benefits if they work at less than 75% of their wages at the age of 60. Benefits are divided into two categories: Basic Allowance for Continued Employment of the Elderly - paid to those who do not receive the basic allowance of employment insurance; The other is the Old Age Re-employment Allowance – for those who receive the basic benefits of employment insurance and are re-employed.
If the monthly salary of 60 to 65 years old drops to less than 61% of the salary of 60 years old, it is equivalent to 15% of the monthly salary, and according to the proportion of salary decline of 61~75%, it is equivalent to 0.44~14.35% of the monthly salary. If a person with a salary of 300,000 yen (about 14,000 yuan) at the age of 60 receives 180,000 yen (about 8,700 yuan) in the month he is eligible to pay, the reduction rate is 60%, and he will receive benefits of 27,000 yen (about 1,300 yuan), which is 15% of the individual's salary.
Some revisions such as Japan's Law on Stable Employment of the Elderly have decided to reduce the upper limit of the welfare rate from 15% to 10% from April 1, 2025. Currently, if an individual's monthly salary exceeds 370,452 yen (about 18,000 yuan), he or she will not be able to receive the corresponding benefit.
The lifestyle after retirement varies from person to person, and if you choose to continue working, the ideal situation is to be able to work the same as before retirement; Choosing the "continuous employment benefit for the elderly" system may alleviate the impact of "salary cuts", which is one of the reasons for the decline in work motivation caused by retirement age. #I'm going to make headlines ##retirement##日本#