The Consumer Behavior, People’s Interest in Financial Planning for Retirement, And Retirement Destinations for Expatriates: Some Insights by Mulland Fraser

The Consumer Behavior, People’s Interest in Financial Planning for Retirement, And Retirement Destinations for Expatriates: Some Insights by Mulland Fraser
The Consumer Behavior, People’s Interest in Financial Planning for Retirement, And Retirement Destinations for Expatriates: Some Insights by Mulland Fraser

When you are ready to invest and secure your future in the country or place where you live, it becomes essential to understand its different aspects. Everyone knows Japan stands out for holding the world’s oldest population, where the average age is slightly more than 49 years, as per 2022 data. Of that, 12% of people are less than 14 years, and 59% are 15 to 65.

The remaining 29% are older than 65 years. Nearly 60% of homes have couples, including or excluding children. Single person household has increased to 35%. The statistics also suggest that men are slightly less than 49% of the population, and women represent barely more than 51%. Interestingly, 92% of the country’s population lives in urban areas like Tokyo, Aichi, Saitama, Kanagawa, and Osaka. 

In the earning scenario, office employees form about 1/5th of the workforce. Engineers and professionals represent 18.8%, salespersons 12.6%, services class people 12%, and mining and construction workers 4.2%. The World Bank report suggests that Japan’s GDP per capita touched nearly USD $39,285.2 in 2021. While earnings are higher in the country, one must know that the annual wages of the people from OECD countries are USD$ 52,436. But the Japanese earn USD $40,849. On a closer analysis, the average income is relatively low. Furthermore, a family’s disposable income is USD $28,872, whereas the OECD annual average is USD $30,490. 

Experts say the rich and poor section of society has massive income discrepancies, with the first category of people earning almost six times more than 20% bottom population. The silver lining is the reduced wage gap based on gender. Anyone under age 20 usually makes significantly less. 50% of the population comprising 25 years old are in part-time jobs making about USD $100 to 500 per month as per the 2021 Statistics Bureau report of the country. These people often explore shopping centers, specialty stores, own-label items, and discount stores. Recently, debit and credit card usage has jumped in the last decade. Most hotels and big box stores prefer debit card payments, though. But the tendency to take household loans has gone up. The Bank of Japan estimates outstanding loan amount is around Y4,744,864. 

If you look at the living expenses, you could spend 25.2% of your income on housing and utility, 15.6% on food and drinks, 13.7% on other goods and services, etc. Categories like clothing, footwear, health, communication, and education attract around 2 to 3.8% of expenses, respectively, in varying degrees. Now, why should you know this? As you live in Japan, you want to know where most of your money goes, where you stand based on your income, and more. All these need attention if you worry about your future and financial health to budget better. You need to update your knowledge more, especially if you are a Gen Z or an expatriate. Awareness will help you seek help with financial planning so you can have a stable and healthy future even when you retire.

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Mulland Fraser: Gen Z’s anxieties about retirement savings and places to live for expatriates

Generation Z comprises people aged 20-22 and millennials aged 27 to 35. As per a survey, 50% of both categories of people worry about their retirement planning. However, 30% of those who started early planning feel optimistic. Renowned financial advisors like Mulland Fraser also believe taking charge of your finances from an early stage helps, no matter if you are a millennial or a Gen Z guy. However, if you are an expatriate, your primary concern would be settling down in a proper city, and retirement savings or investment opportunities will be secondary. So, here are quick details for everyone to help them settle into their life safely. 

Generation Z and Millennials

Let’s begin with what residents feel about their retirement planning. Data demonstrate that 44 to 48% of millennials and Gen Zs need to learn about their financial plans. However, slightly more than 37% of people started investing in real estate after college. The mode of investment has been online. Millennials got a taste of their investment after four to eight years of completing their college education.

Interestingly, someone who has yet to invest knows where to invest. If you look at the data, 58.9% of them feel tax exemption plans like Japan Individual Savings Account are a thing. Then, 54.3% talk about national stocks, 42% about foreign stocks, etc. You witness a different scenario when considering the views of seasoned investors: 91.8% support real estate investment, 89.1% national stocks, and 85.5% mutual funds. You must be thinking about which option you should choose and why. Your confusion will vanish once you consult a trusted financial planning agency or advisor. They can suggest the best solutions to help you build wealth for your old age without any anxiety.

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The survey also revealed that 21.1% of Gen Z participants had already invested money, while 9.4% stopped pursuing this for specific reasons. What is fascinating is over 37% of people expressed their desire to invest, regardless of their experience. And what’s more encouraging is that nearly 70% of the young population is interested in investment. They don’t care about their experience in this area. Are you one of them? However, your source of information can play a critical role in decision-making. While online platforms are popular, consulting someone with years of experience and specialization can be an unbeatable experience. They can clearly guide you about risk diversification, one of the most integral investment areas, and show you concrete examples of building your portfolio. 

Foreigners in Japan!

People come to this country for better job opportunities, rich culture, cuisine, and traditions. A 2022 report suggests that five places in the country are highly popular with expatriates. These include Tokyo, Kyoto, Osaka, Yokohama, and Sapporo. If you plan to retire here, it’s worth learning about a few. 

1) Tokyo 

This densely populated metropolis is home to more than eight million people. The city has high risers, shopping destinations, gardens, temples, quiet residential areas, business hubs, and more. The Japanese capital is also a seat of culture, finance, and politics. Because you are coming from another country, you will like this place for its mix of high-tech and cultural environment. If you have accepted an offer from a multinational corporation, it will most likely be in this city. Most MNCs are either in Shibuya-ku or Minato-ku business districts. Restaurants, healthcare facilities, and other services are also easily accessible. The town also has arrangements for foreign schools for expatriate families to suit their mannerisms. 

One thing you want to ascertain is the living cost in the city. Reports suggest that four-member families in Tokyo incur about USD$ 3,806 or Yen 509,222 monthly. A single person can live on USD $1,063 (142,229.5 yen). These are outside rental expenses. One-bedroom apartments on monthly rent can be available for USD $663.5 to 1,129 (88,736.5 to 151,000 yen). The final cost may vary based on where you live in the city. You can get one low-cost meal for at least USD $7.

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2) Kyoto

Most foreigners in this city belong to the hotel industry as this is a tourist hotspot and cultural hub. The population is 1.5 million people. Other economically vibrant sectors of this Japanese city include handicrafts, electronics, and IT. Kyoto is a beautiful vision with gardens, wooden architecture, royal palaces, monasteries, Shinto shrines, and more. The city’s famous market, Nishiki, offers some of the best cuisines. Transit systems are also robust. Whether you crave city life or the tranquility of gardens and temples, it has everything in stone’s throw away. 

The monthly living cost of the city for a family of four can be around USD $3 271 (121,936 yen) without rent. If you live on rent, one-bedroom accommodation will cost around USD $ 364 to 560 (48,750-74,959 yen). Meals can be available for USD $6 on the lower end. Occasional tsunami and earthquake risks can be there, though.

3) Yokohama 

This city is about a 30-minute rail journey from Tokyo in the south. Living and rental cost is affordable. That’s why many expatriates who work in Tokyo choose this city to reside in areas like Minato Mirai and Yamate-cho. You can get a cheap meal at USD$ 6. A family’s monthly expenses can be around USD $3,062 (409,323 yen). A single person can live for USD $874 (116,850 yen). Monthly rent can be around USD $674 to 905 (90,116 yen to 120,916 yen). 

Your first step to secure your future starts with adjusting your cost of living to a reasonable level. It allows you to save more and eventually invest in different places or assets to grow your wealth. Both locals and expatriates can benefit from this behavior. As hinted above, people in their 20s usually earn less. Hence, they need to be more prudent with their budgeting. It can feel challenging to manage with a small income. Nevertheless, carefulness and financial planning can help. When you feel ready to do something about your savings, you can seek a reliable financial advisor’s assistance.


Rupesh is a self-taught writer who has been working for Exposework for over 2 years. He is responsible for writing informative articles that are related to business, travel, health & fitness, and food.