Want to save taxes in Japan? Then you can save tax with iDeCo.


Do you hate having to pay a lot of taxes even though you have worked hard and earned a lot?  I hate it.  In this article, I will introduce the recommended method for those who want to reduce taxes in Japan as much as possible.

If you find this article useful, I like it!  I hope you can spread it to your friends.

What is iDeCo?

iDeCo(イデコ) is a Japanese system to reduce taxes and enrich life in old age by continuously accumulating money until the age of 60. People under the age of 60 who live in Japan, including foreigners, can join. At iDeCo, you can invest your own reserve amount and receive the investment profit and reserve amount after the age of 60.  Generally, 20% tax is levied on the return on investment, but no tax is levied on the profit earned by iDeCo.  In addition, the accumulated amount (investment amount) will be fully deducted from income and the tax in Japan will be reduced.

The features of iDeCo are summarized in the following three. It’s all about tax savings.

  1. The premium will be fully deducted from your income.
    All iDeCo premiums are tax deductible each year and are deducted from your taxable income to reduce your income tax and residence tax.
  2. The investment profit of the accumulated investment (stake) is tax exempt.
    Normally, the investment profit of financial products is taxable (20.315% of the investment profit), but all the profits obtained from iDeCo are tax exempt.
  3. You can get an income deduction when you receive the benefits after the age of 60.
    When you reach the receiving age, you can receive the total of the principal and the investment profit by choosing one of the two methods.  The first is a method called “retirement income deduction” that you receive in a lump sum.  It is like a retirement allowance received from the company after working until retirement age.  The second method is called “public pension deduction”, in which you receive the same amount every month.  This is a pension.  Regardless of which way you receive it, a tax-saving system called a profitable income deduction will be applied.

How much tax can you save?

I hope you get that this system is better than saving money, but how much tax can you actually save?  Let’s calculate!

  • Annual income … 2.5 million yen, 30 years old, have accumulated 5,000 yen every month (the accumulation period is 30 years)
    ●Total amount of reserve : 1.8 million yen
    ●Total tax savings : 270,000 yen

    The investment profit is added to the total tax saving amount.
  • Annual income … 5 million yen, 30 years old, have accumulated 20000 yen every month
    ●Total amount of reserve : 7.2 million yen
    ●Total tax savings : 1.44 million yen
      Ⅼ Income tax : 720,000 yen
      Ⅼ Resident tax : 720,000 yen

    The investment profit is added to the total tax saving amount.

If you have 8.64 million yen, which is the total amount of savings and total tax savings, when you turn 60, you can live with peace of mind in old age.

Let’s calculate with your annual income.

This site is written in simple Japanese, but if you don’t understand Japanese, try using the translation function of Google chrome.

How to apply for iDeCo

Launch Chrome

Please start Chrome to use the translation function of your browser.

Tap the menu to activate the translation function
Please proceed with the input according to the item
You will receive the application documents by mail within one week
Please take out the following documents and the reply envelope from the envelope you received.
Please fill in the part of the image below ①
Please fill in the part of the image below ②
Fill in the stake distribution

Select No.13 “eMAXIS Slim 米国株式 S & P500 / (US Equity) “.

Submit the documents you filled out in step 7 and the documents in the image below in the envelope to the general affairs section of the company, and ask the people in the company to fill in the necessary items.
Return the required documents

Put the documents from Step 7 to 11 together in the return envelope.

You don’t have to put a stamp on the return envelope.


What should I select?

There are about 30 products to choose from, but let’s choose one or two of them. The first is “All US stocks” / 全米株式(ぜんべいかぶしき)インデックスファンド and the second is “Global stocks” / 全世界株式(ぜんせかいかぶしき)インデックスファンド.  “US stocks” means investing in the US stock market.  “Global stocks” means investing in a diversified investment target in the global stock market.


I feel suspicious when it comes to investment.  Is iDeCo a suspicious mechanism?


I’m not suspicious.  It is a safe system that the government also supports.

< iDeCo official website >

Because the government supports it, a tax-saving system is set up only for those who are doing iDeCo.

How much can I save?


A Depending on your profession, the amount of money you can save each month will vary. 

For example, if you are an office worker, you can save up to 23,000 yen every month.  If you are a civil servant, it is 12,000 yen every month.  Housewives pay 23,000 yen a month, but those who do not have income do not pay taxes, so there is no tax saving effect. The minimum amount that can be saved is 5,000 yen every month, and you can decide by yourself in units of 1,000 yen.

★ Enter the reserve table for each occupation here

When can I withdraw the reserve amount?


You can receive it after 60 years old. 

The accumulated money cannot be refunded or withdrawn from the account until the age of 60, so iDeCo is not recommended for those who quit living in Japan and return to their home country before that.

Is it possible to change the reserve amount?


Yes.  You can change the reserve amount once a year.  Therefore, it can be easily accumulated according to your income.

How many Japanese people are doing iDeCo?


As of September 2021, approximately 2.1 million Japanese are doing iDeCo. 

Of course, I also do iDeCo.  Due to its high tax-saving effect, people with high annual income tend to do a lot of iDeCo, but even if their annual income is low, it is well worth doing.

What should I choose for iDeCo?


Choose All US stocks or Global stocks. 

The US stock market has been growing for a long time, and we can expect a return on investment.  This is not my opinion, but what Jicchama / じっちゃま, who had a career at an investment bank in the United States, tells me.  He tweets in Japanese, but he is reliable, so please follow him to study Japanese.  * You must have at least 10 followers to follow.

Do I have to save money when I lose my job?


You can cancel your savings at any time, not just unemployment.  Until the age of 60, you simply cannot withdraw your deposit from your account.

Where can I check the performance of assets under management?


You can check it on the account page of SBI SECURITIES.

Support this blog

This blog is run with your donations. If this article helps you, I would be grateful if you could support this blog in the form of a cup of coffee. Credit card and Paypal is available.

There aren’t many Japanese people doing iDeCo, and I think most foreigners don’t.  The reason is that the system is a little complicated. However, you can spend a financially stable old age in Japan with a little effort, so please try to apply for Sebi iDeCo, thinking that you are studying Japanese.  If you have any questions, please contact me and I can help!

I’m busy at work, so it may be late to reply, but I’ll always reply so please feel free to contact me.


Rozanne Tiscareno

An impressive share, I just given this onto a colleague who was doing a little analysis on this. And he in fact bought me breakfast because I found it for him.. smile. So let me reword that: Thnx for the treat! But yeah Thnkx for spending the time to discuss this, I feel strongly about it and love reading more on this topic. If possible, as you become expertise, would you mind updating your blog with more details? It is highly helpful for me. Big thumb up for this blog post!


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