How Much Money Do You Need for Retirement? Comparing Averages with Reality

"You need 20 million yen for retirement."

Many of you have likely heard this phrase at least once.
But is it really true? It is not the case that everyone needs 20 million yen, and that amount varies significantly depending on your lifestyle and family structure.

In this article, we will compare the statistical "average" with the "reality" that actually emerges, and explain how you should think about the money you need for your own retirement.

Average figures: About 270,000 yen per month in living expenses for a couple

According to the Ministry of Internal Affairs and Communications' "Family Income and Expenditure Survey (Elderly Couple Households)," the average monthly expenditure for a jobless household with a husband aged 65 or older and a wife aged 60 or older is about 270,000 yen.
Income such as pensions is considered to be about 210,000 yen, and the fact that there is a shortfall of about 60,000 yen every month is the basis for the often-cited "20 million yen retirement problem."

If this monthly shortfall of 60,000 yen continues for 30 years,
60,000 yen × 12 months × 30 years = approximately 21.6 million yen
This is why it is said that "you need 20 million yen for retirement."

However, when you listen to the voices of those who have actually reached retirement, not everyone has necessarily set aside 20 million yen.

✔ "I own my home, so I don't have rent, and my living expenses are lower than I thought."
✔ "I've cut back on hobbies and travel, and I'm managing comfortably within my pension."
✔ "On the other hand, I spent more than expected on supporting my children and medical expenses."
✔ "After my husband passed away, the survivor's pension wasn't enough, so I started working part-time."

In other words, the reality is that "how much you need for retirement" is completely different for each person.

What is the retirement fund you need?

What is important here is to "imagine your own retirement, not the average."
Let's think about it from the following perspectives.

✔ Do you own your home or rent? Whether or not you have housing costs
✔ Are you a couple, living alone, or in a facility?
✔ How much do you want to spend on hobbies and travel?
✔ Your health condition and expected medical expenses
✔ Whether or not there is a possibility of continuing to work

For example, if you are someone whose "hobbies are walking and reading, I rarely eat out, and I own my home with no mortgage," your monthly living expenses might be around 150,000 yen. On the other hand, if you are someone who "wants to enjoy overseas travel after retirement," you will need a reasonable amount of surplus funds.

In short, before you panic and think, "I have to save 20 million yen!", the first step is to calculate based on your own situation.

[Step 1] Let's write down your living expenses

It is realistic to estimate your retirement living expenses based on your current lifestyle.

Example: Monthly expenses (if you own your home)
Food: 50,000 yen
Utilities: 20,000 yen
Communication costs: 10,000 yen
Medical expenses: 10,000 yen
Socializing and hobbies: 20,000 yen
Miscellaneous expenses and daily necessities: 10,000 yen
Fixed asset taxes, insurance premiums, etc.: 15,000 yen
→ Total: 135,000 yen/month

Of course, this is just one example. If you write it down yourself in a notebook or an app, it will feel more realistic.

[Step 2] Let's check how much pension you will receive

To estimate the necessary retirement funds, the key is to understand the amount of pension you will receive.

It's easy to check.
◆ If you register for free on [Nenkin Net] (Japan Pension Service), you can immediately see the estimated pension amount you will receive in the future and your past payment history from your smartphone.

🔍 https://www.nenkin.go.jp/

[Step 3] Difference between income and expenses = The amount you need to prepare

For example, suppose the pension amount you researched is 100,000 yen per month, and your living expenses are 150,000 yen per month.
This results in a monthly deficit of 50,000 yen. If this continues for 30 years,
50,000 yen × 12 months × 30 years = 18 million yen
In other words, the estimated retirement fund for your case is calculated to be 18 million yen.

However, you also need to keep rising prices (inflation) in mind. Even if you can live on 150,000 yen per month now, if inflation continues at 2% per year,
it is calculated that you will need approximately 180,000 yen in 10 years and 220,000 yen in 20 years.

But you don't have to prepare it all through savings!

You don't need to feel pressured to "save it all." You can cover it with the following strategies.

✔ Working styles for seniors (part-time jobs 2-3 days a week, etc.)
✔ Reviewing expenses (reducing fixed costs, minimalist living)
✔ Utilizing public systems (long-term care insurance, high-cost medical expense benefits, etc.)
✔ Asset building such as iDeCo and Tsumitate NISA

Instead of looking at averages, try simulating your own retirement.
By doing so, you can prepare proactively rather than being caught up in anxiety.

"Financial anxiety" is a topic that often comes up in "life conferences" as well.
That is precisely why talking about money to prepare for "what if" is a theme you should start on now.

Why not start today by writing down your living expenses?