Working & Retiring in Japan: Traditions, Transitions, and New Possibilities
Once upon a time, retirement marked the end of the road— a quiet time to rest before the end of life.
But today, it can last decades!! And during those years, new challenges emerge: high blood pressure, aching joints, and yes, even declining memory.
Of course, health conditions vary, but another challenge often gets overlooked: mental flexibility. It can become harder to adapt to change or relate to younger generations, like Gen Z, who are now shaping the future.
We often hear, “You need to prepare for retirement.” But when you're overwhelmed with work, it’s tempting to think, “As long as my finances are covered, I’ll be fine.”
But is that really true?
Can you fill ten or twenty years with books, fishing, and the occasional lunch with friends? Perhaps. And if that brings you happiness, that’s more than enough!
For those who still have energy, curiosity, or a desire to contribute, there’s often a quiet longing for a deeper sense of purpose—and you don’t necessarily have to wait until retirement to pursue it. Retirement is about much more than just finances.
In my last blog post, I explored the safety of daily life in Japan.
In this one, we’ll take a look at New Working–Retiring Streams in Japan.
In this blog:
1. Retirement in Japan: Rules, Realities, and Resistance
2. New Working–Retiring Streams
3. Retirement as a Relaunch: Transitions, and Career Reboots
4. Wrap up - New Possibilities and Your Thing
1. Retirement in Japan: Rules, Realities, and Resistance
In Japan, retirement is not usually a personal decision—it’s largely determined by company policy. Most employees retire based on their company’s Rules of Employment (ROE), which are standardized and regulated.
Under Japanese law, if a company sets a retirement age, it must be at least 60, according to Article 8 of the Act on Stabilization of Employment of Elderly Persons. MHLW reference
That said, a shift is underway. As of April 2025, companies is legally required to ensure employment opportunities until age 65. This does not mean the retirement age must be raised to 65—but companies must offer some system to let employees continue working if they wish.
As of 2022, 72% of Japanese companies still set the official retirement age at 60. Source: Ministry of Health, Labor and Welfare (2022)
To comply with the new requirement, companies are choosing from these options:
a. Raise the official retirement age to 65.
b. Implement a continued employment system (継続雇用制度):
Reemployment contracts (再雇用制度): The employee officially retires at 60 and is re-hired under a fixed-term or part-time contract (e.g., 嘱託社員 or 契約社員).
Employment extension (勤務延長): The employee stays on without retiring, but often with reduced duties or pay.
Most companies have already chosen one of these approaches. While there’s talk of pushing retirement to age 70, no regulation has yet been enacted.
In addition, many companies enforce “役職定年” (yakushoku teinen)—a practice where employees step down from managerial roles around age 55–58, though they may continue in a non-leadership role.
Exceptions and the “Rougai” Phenomenon: However, these rules don’t apply to everyone. ROE doesn't apply to board members, so some directors remain in their positions well into their 80s. While longevity in itself isn’t the issue—many individuals continue to perform well regardless of age—the real concern arises when senior leaders fail to adapt, mislead the company, or oversee prolonged declines in company performance.
Such figures are often (not so affectionately) referred to as “老害” (Rougai)—a slang term for older leaders who overstay their influence despite declining performance or outdated compliance mind set.
The Pension Gap: Japan’s kosei nenkin (厚生年金)—the public pension for salaried workers—starts payouts at age 65. That creates a gap: if you retire at 60, you could face five years without pension income.
The government encourages employers to bridge this by extending employment until 65.
The Aging Workforce and Labor Shortage: Japan is facing a serious labor shortage (人材不足), driven by its aging population and low birthrate. This has improved job opportunities for older workers. More companies are open to hiring seniors, either as re-hires or new employees.
However, ageism remains real. Unless you have in-demand skills, experience, or certifications, available jobs are often limited to elderly care, nursing role, Construction, janitorial work.
While these jobs provide a lifeline, they are often physically demanding and offer limited pay.
FSA Alert (2019):
The Financial Services Agency of Japan published a report estimating that an average retired couple would need ¥20 million in savings to maintain post-retirement life.
The report caused public uproar. Surveys show that around 32.4% of 60’s have that level of savings. Many feel financially and emotionally unprepared.
Real Story:
When I reported to my boss in Singapore, she was surprised to learn that Japan mandates retirement ages in company policies. “Isn’t that age discrimination?” she asked. In Japan, retirement is such a culturally accepted milestone that few question its fairness.
By contrast, in the U.S., retirement is much more individualized. Employees often choose when and how to step away.
I still remember Tim, a 67-year-old engineer in our Chicago office. One day, he walked in smiling and said, “I’ve decided to retire.” He and his wife had been planning it for years. They were returning to Texas, where he grew up, to help care for horses/cows on a family ranch.
In that same office, we also had a 72-year-old administrator still working happily. That, too, felt very American — retirement isn’t mandatory. It’s a choice.
2. New Working–Retiring Streams
Like I mentioned, retirement today can last decades—so it’s no longer just a time to relax. That’s why more people in Japan are exploring new paths well before retirement.
Whether you plan to step away at a traditional age or launch a lifelong venture earlier in life, many of these transitions now look more like career changes than retirement.
And that’s exactly the point: retirement can be a relaunch—and the earlier you start preparing, the easier the pivot.
I’ve always seen employment as a kind of structured collaboration—it gives you goals, routines, and steady paycheck. But it also involves office politics, personality conflict, and often, a fading sense of relevance.
In Japan, structure and security are generally valued. But I like to think of it differently.
Ramen noodle cart
Life as a Yatai (屋台) — A Personal Ramen noodle Cart
To me, working in an organization has always felt like pulling your own Yatai—a ramen noodle cart. (As a child, I remember seeing a ramen noodle vendor pulling his cart through town at new year’s eve.)
Even in a big company, you’re responsible for your own “Ramen noodle”—your skills, your reliability, your value. And you’re evaluated based on what you bring to the table.
You may be part of a team, but in truth, you’re already independent—a kind of self-employed person inside a structure.
Maybe it’s because I changed schools so often due to my father’s job transfers, but I learned early on to rely on myself. That mindset carried into my career.
For me, stepping away from an organization wasn’t a dramatic break—well, maybe a little. I had started thinking about what kind of ramen noodle I wanted to serve next, and where. The structure changes, but the autonomy was always mine.
3. Retirement as a Relaunch: Transitions, and Career Reboots
Here are some of the paths people are choosing today.
a. Start a Second Job Mid-Employment
Some people begin preparing their next business while still working full-time. Today, many companies in Japan allow employees to have second jobs or “parallel careers” (副業), although prior approval is usually required.
The company will typically review for conflicts of interest, the nature of responsibilities, and how it might affect your primary role.
If you're in good shape before reaching retirement age, it’s a great time to start laying the groundwork for your next stage.
A friend of mine launched her YouTube channel about business process effectiveness during the pandemic. It took off quickly! She went on to register her own company at her 40’s—while continuing her full-time job at her employer. When the time is right, she plans to leave the company.
b. Self-Employment or Startups
Starting a business, launching a consulting practice, or monetizing a personal hobby—these are increasingly popular options. This path offers flexibility and personal alignment, but it also comes with risk.
From what I’ve seen, many people begin by earning certifications or licenses—such as wine sommelier, licensed social insurance and labor consultant (社労士), or tax accountant (税理士)—and then go on to start their own practice.
In fact, one of my relatives took this route. While still employed, he studied for and passed the exams for both the Small and Medium Enterprise Management Consultant (中小企業診断士) and licensed social insurance and labor consultant (社労士).
He founded his own company in his mid-50s. Over 10 years later, he’s built a solid client base and a stable business. Along the way, he was diagnosed with cancer—but he fought through it and recovered. He says he plans to keep the business going until he’s 75!
c. FIRE—and Keep Working Anyway
People who reach financial independence often continue working. To FIRE, you need savings equal to 25 times your annual expenses. The ultimate goal is to find your thing (What you want to do) and do it in the way you like.
d. Early Retirement
Some companies offer generous severance packages during corporate restructuring or anytime required. In certain cases, if the departure is classified as company-reason, the waiting period to receive unemployment benefits can be shortened.
In fact, this kind of moment can be a valuable opportunity to re-evaluate your skills and expertise.
Take Jeff, for example. He decided to take a severance package at age 48 in Japan. Then he struggled to find a new job. So he turned to what he knew best—business management—and began writing about it. Today, at 70, he’s still happily writing. In his case, his wife was a nurse and was able to support the family financially during the transition.
Check my blog: Voluntary and Involuntary Termination in Japan: What to Expect
e. Semi-Retirement/Short Hour Working Arrangement/Contractor
Reduced hours, seasonal work, or part-time jobs can offer a healthy balance between professional commitments, family responsibilities, health, and staying engaged.If you're a regular employee, consider speaking with HR about the possibility of a reduced-hours arrangement.
For example, one of our IT employees resigned to become a freelancer, and we later rehired him on a contract basis to work just three days a week.
Alternatively, you can look for roles that already offer flexible or part-time work options.
f. Classic Retirement / Creative Explorer / Global Traveler
Travel the world, take classes, explore art or music—or simply take time to relax. This path prioritizes well-being and curiosity.
For many people—especially those still covering children's education costs or a mortgage—stable income through continued employment is deeply appreciated.
For those who’ve taken advantage of reemployment programs and built enough financial security, this may be the most traditional path.
g. Start-up Visa in Japan (For your reference)
Getting a job in Japan is an option, however, there’s a Start-up Visa
You can start a business in Japan, if you obtain a status of residence under the category of “business manager”. However, you have to meet certain requirements such as securing an office in Japan. When you take advantage of the “Startup Visa”, you can stay in Japan for up to one year and prepare for starting a business, before the requirements are met. In the meantime, municipalities firmly support you.
You apply to one of the municipalities approved by the Japanese government, with a business plan and other documents. If you pass an examination by the municipality and a subsequent immigration examination by the Immigration Services Agency, you can take advantage of the “Startup Visa”.
See the municipalities approved.
See the Work related visa list in the Freebie Shelf.
4. Wrap up - New Possibilities and Your Thing
No matter where you are in your life journey, people who live fulfilling lives are often those who took that first step—and accepted the risks that came with it.
Personally, I believe the real “winner” is the one who finds their thing—the purpose or path that gives life meaning.
My father retired after a lifelong career as a banker. Afterward, he had opportunities to work as a consultant or advisor, but instead, he chose to become a vegetable farmer in his hometown village. That was his thing.
My husband’s friend, Bob, left his company at age 40 and joined the McDonald’s management training program. His first store was in a high-crime area and struggled at first.
But one day, in appreciation of his brother—who was a police officer—he began offering free lunch every Saturday to police officers and their families. Soon, more police cars were parked outside the shop, and neighbors began to feel safer visiting. Business picked up—and the rest is history. McDonald’s was Bob’sthing.
So… what might your thing be?
Ask yourself:
What have I done so far?
What do I want to do in my life ?
What kind of legacy do I want to leave behind?
Whether you're retiring in Japan or just exploring the idea, there is no single right answer.
And that’s the beauty of it !
Have you reinvented your life after retirement—or are you thinking about it? I’d love to hear your story. Share it in the comments or connect with me directly.