What to do about money for retirement? Is it true that how you spend it matters more than how much you need?
Introduction
I have money, but I don't know how to spend it.
I hear that sentiment very often lately.
We hear about the 20 million yen retirement problem, but in reality, it's completely different for everyone.
Whether you own a home, are a couple or single, and what kind of lifestyle you want to lead changes the "required amount" entirely.
In this article,
Realistic guidelines for retirement funds
The balance between cash and investments
The reality of nursing home costs
What you should do before age 60
will be explained with as many concrete figures as possible.
Chapter 1: How much retirement money do you need?
There is no single correct answer to the question, "How much do I need for retirement?"
However, there is a "realistic line" based on actual living expenses.
For example...
1. Couple living together (homeowner) - modest lifestyle
→ Monthly expenses are about 250,000 yen.
If you receive 170,000 yen per month in pension, the difference is 80,000 yen per month = 960,000 yen per year.
About 20 million yen over 20 years is a guideline.
2. Living alone - renting - high medical expenses
→ If it costs about 300,000 yen per month, the difference from the pension is 150,000 yen per month.
You would want about 36 million yen over 20 years.
3. Couple - lifestyle enjoying hobbies and travel
→ If it costs 350,000 to 400,000 yen per month, it will be in the 40 to 50 million yen range over 20 years.
In other words, the "20 million yen retirement problem" is just the bare minimum line.
If you are wondering, "How much can I save with NISA?"
👉 How much is the average NISA contribution? | A thorough explanation with real data for people in their 20s, 30s, and 40s
Please check the actual examples by age group.
Chapter 2: Should you keep money in cash or invest it?
"Feeling safe with just cash" no longer applies.
If prices rise, the value of your savings will effectively decrease.
For example, if you could invest at 5% per year...
30,000 yen per month x 20 years → approx. 12.3 million yen
50,000 yen per month x 20 years → approx. 20.5 million yen
100,000 yen per month x 20 years → approx. 41 million yen
Even over the same period, your future will be completely different depending on whether you 'invest' or 'save' your money.
Of course, there are risks.
That is precisely why 'investing without taking on too much risk' is the key in your 40s and 50s.
How exactly should you allocate it?
👉 10 Stocks to Prepare for 2026: Investment Strategies to Anticipate Growth Trends
also introduces growth stocks that are currently attracting attention. Please use it as a reference if you are starting to invest.
Chapter 3: How much do nursing homes actually cost?
This is an area that is surprisingly little known.
For a private nursing home with nursing care,
Entrance fee: 0 to 30 million yen (higher monthly fees instead of zero yen)
Monthly cost: around 200,000 to 400,000 yen
In other words, at 250,000 yen per month, that is 3 million yen per year.
If you live there for 10 years, it will be 30 million yen, and for 15 years, it will be 45 million yen.
For residential-type or service-oriented housing for the elderly (SAKJU),
the entrance fee is lower, and the monthly cost is generally around 150,000 to 250,000 yen.
Many people say, 'Public facilities are enough for us,' but
the waiting list for special nursing homes for the elderly is long, and you cannot always get in.
Realistically, it is safer to set aside funds in a separate account
to ensure you have options to choose from when the time comes.
Chapter 4: What should the ratio of cash to investment be?
Roughly speaking, here are some common guidelines👇
40s: 60-70% investment / 30-40% cash
50s: 50% investment / 50% cash
60s and beyond: 30-40% investment / 60-70% cash
In your 40s, you still have time.
This is a period where you can aim for returns by making good use of growth stocks and index investments.
Once you enter your 50s, let's gradually shift to a defensive composition.
The trick is to increase the ratio of cash and bonds so that you don't panic even if a market downturn occurs.
For balanced investment ideas and specific stocks,
👉 [Deep Dive] Mitsubishi Corporation vs. Itochu Corporation: Are Trading Company Stocks in a 'High Dividend Bubble'?
covers this in detail. This is also a popular article.
Chapter 5: How much should you save by age 60? What should you do?
Assuming a 5% investment return over 20 years...
To build 20 million yen -> about 48,000 yen per month
To build 30 million yen -> about 73,000 yen per month
To build 50 million yen -> about 121,000 yen per month
It is realistic if you start at 40. However, if you start at 50, you will need 120,000 to 130,000 yen per month for the same 20 million yen. In other words, 'when you start' is the most important factor.
What you should do in your 40s is:
Visualize your household finances and cut fixed costs by 30,000 yen per month
Maximize your use of NISA and iDeCo
Organize education expenses and mortgage loans, and invest surplus funds
Review your household finances once a year (rebalancing)
In your 50s:
Reduce investments and increase cash and bonds
Estimate costs for nursing homes and medical expenses
Prepare for inheritance and pension receipts
These are the important steps.
Chapter 6: Action list you can take right now
Organize cash, investments, insurance, etc., into one sheet (create an asset list)
Divide living expenses into 'fixed' and 'variable'
Calculate your savings amount by working backward
Research nursing home options to get a sense of the costs
Check for overlapping insurance policies to save money
Make sure to conduct a 'household budget review' once a year
Even just reviewing your assets once a year can make a huge difference in your retirement funds.
Chapter 7: Thinking through realistic examples
Person A (45 years old, company employee, 20 million yen in savings)
The goal is 30 million yen by age 60.
At a 5% annual return, you can reach this by saving about 94,000 yen per month.
They are reviewing their household budget to lower fixed costs while continuing to invest steadily through NISA.
Person B (52 years old, self-employed, 15 million yen in savings)
8 years left until age 60.
First, they are balancing their portfolio at 50% investment and 50% cash to keep risk low, while
recalculating retirement expenses. They are planning to cover any shortfall with side-hustle income.
By visualizing 'what you need to do now' with numbers like this,
your anxiety will decrease significantly.
Summary
For retirement money, the key is not 'how much you need,' but
'how you spend it' and 'how you protect it.'
The required amount changes based on your lifestyle
Cash alone cannot beat inflation
However, taking on too much investment risk is also a no-go
Nursing homes and medical expenses are higher than you might expect
It is not too late to start in your 40s or 50s
First, try to understand your own living expenses and
think about how much 'retirement cost' you should anticipate.
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