In today’s world, often referred to as the “100-year life era,” turning 60 is not a final destination signifying “retirement,” but rather a crucial starting point for “rebuilding your financial plan for the future.”
In particular, for those enrolled in “private pension plans”—such as iDeCo (Individual-Type Defined Contribution Pension), corporate-type DC (Defined Contribution Pension), and defined benefit corporate pensions (DB)—turning 60 is a time when you are faced with major decisions regarding “how long to continue making contributions” and “when to start receiving benefits.”
In this article, based on specialized materials, we provide a thorough explanation of the complex mechanisms of the pension system for those in their 60s.
From the basics of public pensions to the detailed rules of private pensions such as iDeCo, DC, and DB, and strategies for continuing to work after age 60, we present the latest information as of 2026 (Reiwa 8).
- Major Changes Surrounding Pensions in Your 60s
- How the Public Pension System Works After Age 60
- Details of Private Pension Plans (iDeCo, Employer-Sponsored DC, and DB)
- Real-Life Examples: Patterns of Eligibility Loss and Benefit Receipt Around Age 60
- “Three Key Points to Consider When Planning Your Pension in Your 60s”
- Summary: 3 Steps to Avoid Regrets
Major Changes Surrounding Pensions in Your 60s
In the past, the pension system generally followed a simple model: “Retire at age 60 and immediately begin living on your pension.”
However, due to legal reforms and changes in social structure, the system is now shifting toward a more flexible design that accommodates “diverse work styles.”
Under the current private pension system, reaching age 60 does not automatically force you to start receiving benefits.
Rather, individuals can now make choices tailored to their personal lifestyles, such as whether to “continue contributing as a member after age 60 to further grow their assets” or to “continue investing while deferring the start of benefits.”
While this freedom of choice has increased, there is also a risk of unexpected “delays in receiving benefits” or “increased tax burdens” if you do not accurately understand the rules of each system (such as how long you can remain enrolled and what conditions are required for receiving benefits).
In this article, we will take a detailed look at the key points for avoiding these risks.
How the Public Pension System Works After Age 60
To understand private pensions, it is first necessary to clarify how the foundational public pension system (National Pension and Employees’ Pension) operates after age 60.
① Flexible Management of the National Pension (Basic Old-Age Pension)
The mandatory enrollment period for the National Pension is, in principle, 40 years, from age 20 to age 60.
However, even after age 60, you can adjust your future benefit amount by utilizing the following systems.
- Advancing or Deferring the Basic Old-Age Pension
While the standard age for receiving benefits is 65, you can “advance” your pension receipt starting as early as age 60.
However, your monthly pension amount will be reduced for each month you advance your receipt, and this reduction will apply for the rest of your life.
Conversely, by “deferring” your pension receipt until age 75 at the latest, you can significantly increase your total benefits. - Voluntary Enrollment System
Individuals who “have not paid premiums for 40 years and are therefore ineligible for the full benefit amount” or those who “have not met the 10-year eligibility period” may voluntarily continue paying premiums between the ages of 60 and 65.
This allows them to increase their future pension benefits.
② Employees’ Pension Insurance (Old-Age Employees’ Pension) and the In-Service Old-Age Pension
If you continue working as a company employee through re-employment or similar arrangements, the Employees’ Pension Insurance system becomes particularly important.
- Enrollment Until Age 70
As long as you are under the age of 70 and continue to work as a company employee, you will generally remain an insured person under the Employees’ Pension Insurance system.
This allows you to further increase the amount of the old-age Employees’ Pension you will receive in the future. - Payment Adjustments Under the In-Service Old-Age Pension System
This is a mechanism that requires attention when “receiving a pension while working.”
If the total of your wages (equivalent to the monthly total remuneration) and your pension amount exceeds a certain threshold (currently 500,000 yen, for example), payment of part or all of your pension may be suspended.
Details of Private Pension Plans (iDeCo, Employer-Sponsored DC, and DB)
As members approach the age of 60, the most critical decision they must make is how to handle the private pension funds they have accumulated on their own or those provided by their employer.
① iDeCo (Individual-Type Defined Contribution Pension): Investments can be managed until age 75
In recent years, the eligibility age for iDeCo has been significantly expanded.
- Extension of the Eligibility Period
If you are enrolled in the Employees’ Pension Insurance as a Category 2 insured person under the National Pension System (i.e., a company employee or civil servant), or if you are voluntarily enrolled in the National Pension System, you may continue to pay premiums until you turn 65. - Timing of Benefit Commencement
You may begin receiving benefits at age 60, provided you have a “total period of membership” of 10 years or more (discussed below).
You may file a claim for benefits at any time between the ages of 60 and 75. - Continuation as an Investment Directive Holder
Even after you stop paying premiums at age 65, you may continue to manage your assets within the tax-exempt limit as an “investment directive holder” until you begin receiving benefits.
② Corporate Defined Contribution (DC) Plans: Company Policies Are Key
The treatment of employees after age 60 varies significantly depending on the details of their employer’s plan.
- Expansion of Eligibility Age
In line with the extension of mandatory retirement ages and the introduction of re-employment systems at many companies, plan rules have been revised to allow participants to continue making contributions until age 70. - Choice of Benefit Commencement Date
Similar to iDeCo, eligibility for benefits generally begins at age 60; however, you can defer receiving benefits and continue investing until age 75. - Transfer upon Retirement
If you retire after age 60 and have not yet started receiving benefits, you can transfer your assets to iDeCo to continue investing.
③ DB (Defined Benefit Corporate Pension Plan): The plan that requires the most individual review
While DB plans guarantee future benefit amounts, their design varies significantly from company to company.
- Variations in the Age of Benefit Commencement
Depending on the plan rules, benefits may begin immediately upon reaching the mandatory retirement age of 60, or they may be deferred until age 65. - Receiving Benefits While Still Employed
If you continue to be employed by the same company after age 60, whether you can receive your defined benefit (DB) pension while still earning a salary depends on the plan rules.
If the plan includes provisions for suspending payments, the start of benefit payments may be delayed depending on your employment status.
Real-Life Examples: Patterns of Eligibility Loss and Benefit Receipt Around Age 60
Let’s look at three common scenarios based on specific examples, such as “Eligibility Requirements for Old-Age Benefits from the DB” included in the materials.
Case A: A long-term member with over 20 years of service who retires at age 60
- Situation
You have worked for the same company since graduating and have been enrolled in the DB and DC plans for over 20 years. - Eligibility
In this case, you are eligible to receive the full amount of benefits (old-age pension) under most plans. - Options
You can choose to receive payments for life (or for a fixed period) in the form of a “pension,” or to receive a lump-sum “lump-sum payment.”
It is important to make your choice after considering tax deductions (retirement income deduction vs. public pension deduction).
Case B: If you left your job in your 50s and continued investing
- Situation
The member has been enrolled for approximately 10 years and changed jobs or retired at age 55. - Procedure
If the member did not receive a lump-sum payment upon retirement and instead transferred their assets to an iDeCo account or similar plan (portability), their “entitlement to benefits” will be established at age 60. - Key Point
As long as the total enrollment period is 10 years or more, the member can smoothly begin the application process for benefits starting at age 60.
Case C: If you continue to work full-time after age 60
- Situation
Re-employment as a regular employee until age 65, with salary levels maintained. - Recommendation
In this case, if you are enrolled in a defined contribution (DC) plan, the top priority is to “continue making contributions for another five years to grow your assets while saving on taxes.” - Note
If you are enrolled in a defined benefit (DB) plan, you must check with Human Resources in advance to confirm whether your pension benefits will be reduced based on your salary (i.e., whether there are provisions similar to the “in-service old-age pension” rules).
“Three Key Points to Consider When Planning Your Pension in Your 60s”
Here, we outline some rules that are often overlooked, particularly those found in the notes and annotations of reference materials.
① Restrictions on Benefits Due to Insufficient “Total Membership Period”
For iDeCo and DC plans, if your “total membership period” is less than 10 years as of age 60, the age at which you can begin receiving benefits will be gradually postponed.
- 8 years or more but less than 10 years: From age 61
- 6 years or more but less than 8 years: From age 62
- … (omitted) …
- Less than 2 years: From age 65 Those who started iDeCo in their 50s should be aware that they may not be able to withdraw funds the moment they turn 60.
② Priority of Pension Plans
A key feature of corporate pension plans (DB and employer-sponsored DC plans) is that, in many cases, the company’s own pension plan takes precedence over national laws.
Discrepancies such as “My friend at another company is receiving benefits, but I am not” often stem from differences in these pension plans.
③ The Relationship Between Exit Strategies and Taxes
The type of tax you owe depends on how you choose to receive your benefits.
- Lump-Sum Payment
This is treated as “retirement income.”
Because the retirement income deduction applies, this option tends to be more advantageous the longer your years of service. - Annuity (Installments)
This is classified as miscellaneous income eligible for the “public pension deduction.”
While it results in an annual tax liability, it provides a stable source of income for the long term.
Summary: 3 Steps to Avoid Regrets
To make your 60th birthday a turning point for “growing your assets while protecting them,” follow these steps.
- Understand Your Current “Periods”
Check your “Total Period of Membership” and “Number of Months of Contributions” accurately using the “Nenkin Teikibin” (Pension Statement) or the “My Page” section of each system. - Check Your Employer’s “Regulations”
DB plan members, in particular, should be sure to check their company’s internal regulations regarding post-retirement benefit rules (such as whether there is a waiting period). - Simulate Your “Exit Strategy”
Simulate which age to start receiving benefits is most advantageous for you (including tax implications).
At first glance, the pension system may seem complicated, but simply understanding the basic principles—such as the fact that you can continue contributing after age 60 and that you can defer receiving benefits until age 75—can greatly expand your options.
If you have any concerns, be sure to consult with the relevant department at your workplace or a financial institution as soon as possible so you can plan for a fulfilling retirement.
