Strategy
  • Articles
  • July 2025

Japan’s Retirement Readiness: Balancing health risks and financial security for the future

By
  • Motoki Takahashi
  • Shugo Kato
Skip to Authors and Experts
A smiling older couple of Asian descent sit in a field of white flowers
In Brief

A new survey from RGA and the Society of Actuaries (SOA) Research Institute reveals a significant opportunity for insurers as Japan's retirement landscape transforms.

Key takeaways

  • Japanese consumers across all age groups show strong interest in insurance products that offer both health-related protection and guaranteed income, with 73% interested in annuities providing increased payments for critical illness or disability.
  • Tax considerations are increasingly important in retirement planning, with 65% of respondents expressing interest in tax-deferred annuities and 90% concerned about future tax increases.
  • While interest in innovative insurance products is high, actual ownership rates remain low, presenting a significant opportunity for insurers to develop and market tailored solutions for Japan's aging population.

 

Now imagine millions of kanreki vests festooned throughout the country. With approximately 29% of Japan’s population -currently over the age of 65, the country’s super-aged society is increasingly focused on the practical financial and health-related implications of aging.

A 2024 joint consumer survey by the Society of Actuaries (SOA) Research Institute and RGA, "Retirement Readiness in Japan: Financial Security and Risk Perceptions," provides key insights into Japan's retirement readiness landscape. The survey of 750 respondents spanned three age groups (prime age workers - ages 30-45; pre-retirees - ages 46-59; and retirees - ages 60-75) and focused on financial awareness, risk perceptions, retirement planning, and income sources.

This article explores the survey’s finding that Japanese consumers have a growing interest in insurance products outside of government pension benefits that offer protection and long-term security.

Pension systems and retirement realities 

In Japan, the government pension system primarily consists of two types: the National Pension (Kokumin Nenkin) and the Employees' Pension Insurance (Kosei Nenkin). The National Pension is a basic mandatory system for all residents aged 20-59, while Employees' Pension Insurance is an additional, income-related plan for those working for companies. To be eligible for pension benefits, individuals must contribute to the system for at least 10 years. Some professions and industries not covered by the Employees' Pension Insurance have a Mutual Aid Pension, run by mutual aid associations.

For many Japanese retirees, pension income is supplemented by personal savings, employer annuities, inheritance, and work income generated during retirement, among other sources.

 

A couple relax at the beach
SOA and RGA present: Retirement Readiness in Japan

The Society of Actuaries (SOA) and RGA jointly commissioned a Greater Asia research project to study the current state and future opportunity of the retirement market in Taiwan and Japan. 

Apart from these pensions, the SOA/RGA survey revealed workers in Japan are skeptical that their savings will be sufficient in retirement. Working-age Japanese expect  smaller retirement funds at age 60 than the amounts held by current retirees. They also expect to work during retirement.

 

A significant portion of respondents reported limited knowledge about investment and financial products, with 17% indicating they were "not knowledgeable at all" and 42% reporting "very limited knowledge." Only 5% of respondents considered themselves "very knowledgeable" about financial matters. These results highlight a substantial gap in financial literacy among Japanese consumers, underscoring the need for improved financial education and awareness initiatives to support better retirement planning and financial decision-making.

Priorities for Japanese seniors 

The SOA/RGA survey revealed Japanese seniors want financial products that offer both protection against health risks and stable income in retirement, addressing their concerns about healthcare costs, longevity, and maintaining independence as they age.

Health-related coverage is a top priority, with 88% of respondents expressing concern about developing major illnesses and 87% worried about cognitive decline or dementia. This translates into high interest in critical illness insurance, with 48% of respondents likely to consider purchasing or reviewing such coverage. 

Snapshot: The appeal of single premium products

Estate planning and wealth transfer: Single-premium life insurance allows individuals to transfer assets to beneficiaries with a lump-sum payment, providing a paid-up death benefit and simplifying estate planning. Some products offer death benefits that exceed the premium paid, ensuring a larger inheritance.

Guaranteed benefits and stability: Many Japanese whole life insurance products offer guaranteed benefits, including guaranteed interest rates and death benefits for the life of the policy, providing peace of mind in uncertain economic times. This is particularly appealing in a market with a history of low interest rates.

Savings-oriented solutions: In addition to the death benefit, single-premium life insurance can function as a savings vehicle, building cash value over time that can be used for long-term goals or supplemental income.

Financial security is another key concern, with many seniors showing interest in products that offer guaranteed income for life (43%) or fixed income throughout retirement (39%). They also expressed notable interest (73%) in annuities that provide increased monthly income payments in the event of a critical illness or disability.

Priorities for working age Japanese

According to the survey, Japanese working-age consumers consider health-related coverage a significant priority, with high interest in critical illness insurance (48% being likely to consider purchasing or reviewing such coverage). Working-age Japanese also expressed notable interest in health and wellness insurance, particularly for managing diseases such as diabetes (50% being very or somewhat interested).

Financial security for retirement is another key focus, with many showing interest in products that offer guaranteed income for life (43%) or fixed income throughout retirement (39%).

The survey highlighted a strong preference for financial products that create guaranteed income, reflecting concerns about long-term financial stability. Additionally, working-age Japanese want annuities that provide increased monthly income payments in the event of a critical illness or disability (73% interested).

While interest is high, actual ownership rates for many of these products remain low among working-age consumers. The survey also revealed that younger workers are more likely to consider riskier investment portfolios compared to older age groups, indicating a higher risk appetite and potential interest in insurance products that offer both protection and growth potential.

Tax planning

The survey results show that tax increases are a major concern for Japanese respondents, with 90% expressing worry in 2024, up from 87% in 2018. This suggests a growing awareness of tax-related challenges in retirement planning and that Japanese consumers are looking for tax-efficient financial products.

Of the Japanese consumers surveyed, 37% of respondents in 2024 expect to inherit property, up from 27% in 2018, indicating that inheritance is becoming a more significant factor in retirement planning.

 

In terms of insurance products, the survey found a varying interest (65%) in different types of tax-deferred annuities.

  • Lifetime-guaranteed annuities attracted moderate attention, with 40% of respondents expressing interest in converting a portion of their assets into these products for retirement.

  • Annuities with enhanced benefits linked to critical illness or disability garnered significantly more interest, with 73% of respondents indicating they would consider such products. This suggests a strong preference for products that offer both income security and protection against health-related risks.

  • Tax-deferred annuities – insurance products that allow investment earnings to grow tax-free until the money is withdrawn – also showed considerable appeal, with 65% of respondents expressing interest. This again highlights the importance of tax considerations in retirement planning for many Japanese consumers.
Learn about RGA’s expertise in coinsurance transactions in Japan

In 2024, RGA led a landmark transaction in the longevity space with one of Japan’s leading providers of life annuities.

 

Avenues for opportunity 

Given these insights from the SOA/RGA survey, how can Japanese insurers better engage with consumers nearing retirement or those with decades of working years ahead of them?

Invest in product development

Explore new products that respond to risk-averse Japanese consumers who want guaranteed income but may be open to protection riders for CI and disability.

Get a clearer picture of risk

In the Japanese insurance industry, experience data for the older population is still limited. Reinsurers such as RGA can comb existing and new data to help insurers develop more complete risk profiles.

Consider coinsurance

Long-term guaranteed products carry a heavier capital burden for insurers. That challenge is compounded by Japan’s transition to a new economic solvency regime model. Coinsurance can be a viable option for insurers to retain and protect the value and viability of their single premium product portfolios.

Conclusion

The 2024 SOA/RGA survey reveals a growing demand for innovative insurance products that address both health-related risks and long-term financial security. Japanese consumers, across all age groups, are showing increased interest in products that offer guaranteed income, critical illness protection, and tax advantages. However, a notable gap exists between interest and actual ownership, particularly among working-age individuals. This presents a significant opportunity for insurers to develop and market products that better align with the changing needs and concerns of Japan's aging population.


More Like This...

Meet the Authors & Experts

Motoki Takahashi
Author
Motoki Takahashi
Head of Strategy 
Kato Shugo
Author
Shugo Kato

Director, Research and Marketing, Japan