Inputs
The main input is the expected annual public pension if benefits start at age 65. The interface asks for annual amounts in units of 10,000 yen. For example, if the annual estimate is 2,000,000 yen, enter 200.
Early claiming
If benefits start from age 60 to 64, the simulator applies a 0.4% reduction for each month earlier than age 65. Starting at age 60 is 60 months early, so the reduction is 24%.
Deferred claiming
If benefits start at age 66 or later, the simulator applies a 0.7% increase for each month later than age 65. Starting at age 70 is 60 months late, so the increase is 42%. Starting at age 75 is 120 months late, so the increase is 84%.
Cumulative benefits
For each claiming age, the simulator totals benefits from the claiming age through the year before life expectancy. It does not count payments in the life-expectancy year itself, matching the convention used by Japan Pension Service trial calculations. The number of payment years is life expectancy - claiming age. For example, age 65 to life expectancy 90 counts 25 years; age 70 to life expectancy 90 counts 20 years.
Break-even age
Break-even age is calculated by comparing monthly cumulative benefits against the age-65 baseline. The simulator solves the age where the cumulative amount equals the baseline and displays it in years and months. For example, with a 2,000,000 yen annual pension, claiming at age 60 breaks even against age 65 at about age 80 years and 10 months.
Rule set
The 0.4% monthly early-claiming reduction and 0.7% monthly deferral increase reflect the post-April 2022 rules. These rules apply to people born on or after April 2, 1962. People born on or before April 1, 1962 may be subject to older rules, including a 0.5% monthly early-claiming reduction.
Not included yet
This free tool does not yet include taxes, social insurance premiums, dependent pension add-ons, transfer additions, spouse pension benefits, earnings-tested pension reductions, or inflation indexation. Real retirement decisions should place those items in the same cash-flow model as severance pay, iDeCo, NISA, and living costs.
Sources
The 0.4% early-claiming reduction, 0.7% deferral increase, and deferral ceiling through age 75 are based on public information from Japan Pension Service.