The lump-sum retirement allowance, iDeCo, corporate DC plans, the public pension — the years around mandatory retirement are when you receive more money than at any other time in your life. And simply by designing the order and timing in which you receive it, your take-home amount can change by several hundred thousand to over a million yen. Yet the decisions are scattered across separate systems: how to take your retirement allowance, the ordering rules for iDeCo, early or deferred pension claiming, the choice of health insurance, and unemployment benefits. This article is a hub for "money around retirement" that rearranges all of them into a timeline map from age 55 to 70. Each topic links to a detailed article on this site.
The full map: what to decide and when, from age 55 to 70
| Timing | What to decide and do | Detailed guide |
|---|---|---|
| Age 55–59 | Check the projected amount of your retirement allowance and your company's payment rules, and design the order in which you will receive iDeCo, corporate DC, and the retirement allowance (this is the most important step — some designs become impossible if you wait until just before 60) | The order for receiving iDeCo and the retirement allowance |
| Age 60 | Your right to receive iDeCo begins. Determine whether "take the iDeCo lump sum first, then the retirement allowance 10 years later" works for you. If you keep working, continuing iDeCo contributions is also an option (the December 2026 revision expands the eligible age for contributions) | The December 2026 iDeCo revision |
| At retirement | Decide whether to take the retirement allowance as a lump sum or in installments (annuity form). Be sure to submit the "Declaration Concerning Receipt of Retirement Income." Prepare for the deferred residence tax bill and the drop in take-home pay in your final paycheck | Taxes on the retirement allowance / Take-home quick-reference table / Taxes and procedures when leaving a job |
| Right after retirement | Choose your health insurance from three options (voluntary continuation, National Health Insurance, or a family member's dependent coverage). Complete the procedures at Hello Work for unemployment benefits (the basic allowance if under 65; the lump-sum benefit for older job seekers if 65 or over) | The three health insurance options after retirement / How to receive unemployment benefits |
| Age 64–65 | The pension claim form arrives. Decide whether to start receiving at 65 or defer for a larger amount (deferral adds +0.7% per month, up to +84% at age 75; early claiming reduces it by 0.4% per month). Before 65, also watch out for the adjustment between unemployment benefits and the pension when both are payable | Early and deferred pension claiming |
| Age 65–70 | If you keep working, check the earnings threshold at which the working-age pension (zaishoku pension) is partially suspended. Check every year whether your pension requires a tax return. The deadline for receiving iDeCo is age 75 | Pension taxes and the tax return |
Why the order matters: the rule against double-counting the retirement income deduction
Both the retirement allowance and the iDeCo lump sum can be received as "retirement income," which carries a very light tax burden. However, there is a rule that if you receive both within a short interval, the years of service counted for the deduction are reduced by the overlapping portion. The key points about the interval are three.
- Receive iDeCo first, then the retirement allowance: leave a gap of 10 years (extended from 5 years by the 2026 revision)
- Receive the retirement allowance first, then the iDeCo lump sum: a gap of 20 years is required, so in practice it is hard to avoid the overlap of deductions
- If the gap is too short, the retirement income deduction is reduced — there are worked examples showing a difference of roughly 700,000 yen from the receiving method alone
Basic strategy: take iDeCo (or corporate DC) as a lump sum first around age 60, and receive the retirement allowance 10 years later — that is the ideal shape. However, since the timing of the retirement allowance is often fixed by the company and cannot be moved, design your plan on the premise that the iDeCo side is the one you can move, including combinations with the annuity form. For the details of the rules and worked figures, see the article on the receiving order.
The cross-cutting view people miss: not only taxes but insurance premiums move
- A lump sum (retirement income) is taxed separately: it is not combined with other income, and it is not counted when calculating National Health Insurance or long-term care insurance premiums
- The annuity form (miscellaneous income) is taxed comprehensively: because it pushes up your income every year, in addition to income tax and residence tax, National Health Insurance and long-term care premiums, and even your out-of-pocket share of medical costs can rise in a chain reaction. The standard rule of thumb is "lump sum first as the default; use the annuity form in consultation with your deduction allowances"
- Pension deferral carries the same trap: the increased pension raises your income every year, affecting taxes, insurance premiums, and your cost-sharing bracket at the counter. Do not decide on the increase rate alone — compare on a take-home basis
- Residence tax in the year after retirement: because residence tax is levied on the previous year's income, a high bill arrives in the year after retirement, when your income has dropped. It is safest to set aside funds for this from your retirement allowance
What to do today
What to do today
- Write out on a single sheet the projected amount of your retirement allowance (company rules and estimates), your iDeCo and corporate DC balances, and the dates from which you can receive each
- Lay the events out on a timeline and check whether "iDeCo first, retirement allowance 10 years later" is compatible with your planned retirement date
- Check your projected pension at 65 on your nenkin teikibin (annual pension statement) or Nenkin Net, and consider the increase from deferral and how you would bridge your living costs
FAQ
Q. From what age should I start preparing?
A. Around age 55 is a good benchmark. The design of "receive iDeCo first and the retirement allowance 10 years later" can only be put together while you still have room to move both your retirement date and the start date of your iDeCo benefits. Just before 60, your options shrink considerably.
Q. I have both a corporate DC plan and iDeCo. Is the thinking the same?
A. Basically yes. For both, a lump sum is retirement income and the annuity form is miscellaneous income. The rule against double-counting the retirement income deduction applies in the same way, so design the receiving dates of all three — the retirement allowance, corporate DC, and iDeCo — together on one timeline.
Q. Is deferring the pension always the better deal?
A. Not necessarily. Deferral adds 0.7% per month (up to an 84% increase at age 75), but the larger pension also affects your annual taxes, National Health Insurance and long-term care premiums, and your cost-sharing bracket for medical expenses. The answer depends on whether you can treat it as insurance against longevity risk and whether you have living funds to bridge the gap.
Q. Is taking the retirement allowance in annuity form a bad deal?
A. Not necessarily. A lump sum is tax-free and advantageous as long as it stays within the retirement income deduction, but if the amount greatly exceeds the deduction, a combination that shifts the excess to the annuity form and uses the public pension deduction allowance can come out ahead. Check the take-home comparison in the retirement allowance quick-reference table.
References (sources)
Note: This article is general information. Which receiving method is advantageous varies greatly with the amount of your retirement allowance, years of service, and other income. Before acting, consult the tax office, a licensed social insurance consultant (sharoushi), a tax accountant (zeirishi), or another professional.