Why I Almost Ignored iDeCo

The HR onboarding packet sat unopened on my desk for three weeks. Between configuring my new laptop and diving into our fund distribution setup, the iDeCo enrollment form kept getting pushed to tomorrow. After all, I already had the company DC plan – why complicate things with another retirement account?

Then I did the math on what my job-hopping had actually cost me. The number made me close my laptop and stare at the wall for a full minute: ¥3.2 million in lost compound growth. Gone. Simply because I'd had to liquidate my DC holdings each time I changed companies – from Rakuten Mobile to Mercari, Mercari to Paidy, and now Paidy to Chocolate Finance.

The ¥50 Million Realization That Changed Everything

Picture this: You're 35, making ¥10 million a year, and you switch jobs every 3-4 years like most of us in tech. Each time, your company DC gets cashed out. You lose not just the tax benefits, but something far more valuable – time in the market.

Here's what I calculated during that wall-staring moment:

If I'd kept that money invested continuously:

• Rakuten Mobile DC (¥800,000) → Would be ¥1.4 million today

• Mercari DC (¥1.2 million) → Would be ¥1.8 million today

• Paidy DC (¥400,000) → Would be ¥450,000 today

That's ¥1.2 million in gains I'll never see. And if I keep job-hopping without iDeCo? By retirement, that gap becomes ¥50 million or more.

Why Japan Created iDeCo (And Why You Should Care)

Let me share something most financial advisors won't tell you straight: Japan's pension system is heading for a crisis. The government knows it. That's why they created iDeCo.

Think of it this way: In 1990, Japan had 5.1 workers supporting each retiree. Today? Just 2.1 workers. By 2050, it'll be 1.3 workers per retiree. The math simply doesn't work.

iDeCo is the government's way of saying, "We can't guarantee your pension will be enough. Here's a tax-advantaged way to save yourself."

But here's the brilliant part – they made it completely portable.

The Game-Changing Difference: iDeCo vs Company Plans

Last month at Lily's playgroup, another parent mentioned they were leaving their company but dreading the DC liquidation. "Have you maxed out your iDeCo?" I asked. Their blank stare told me everything.

Here's what makes iDeCo revolutionary for job-hoppers like us:

Company DC/DB Plans:

• Locked to your employer

• Must liquidate when you leave (unless very specific conditions)

• Lose compound growth between jobs

• Contribution limits tied to company scheme

• Investment options chosen by employer

iDeCo (Individual DC):

• Follows YOU, not your job

• Never forced to liquidate

• Continuous compound growth for 30+ years

• Your control over investments

• Works alongside any company plan

My Real Numbers: The Power of Parallel Paths

Here's exactly how I structure my retirement savings now:

Company DC: ¥35,000/month

• Goes 100% into S&P 500

• Will liquidate when I eventually leave

• Consider it "bonus money" not core retirement

Personal iDeCo: ¥20,000/month

• 60% developed markets

• 40% S&P 500

• This is my "never touch until 60" money

• Already accumulated ¥380,000 in 18 months

The beauty? Even if I change jobs five more times before retirement, my iDeCo keeps compounding. At 7% annual returns, that ¥20,000 monthly becomes ¥24.7 million by age 60.

Why "Locked Until 60" Is Actually Perfect

When my wife and I were planning for international school costs (¥2-3 million per year, per child), I initially saw iDeCo's lock-in as a negative. Can't touch the money until 60? What if we need it for school fees?

Then I realized: That's exactly why it works.

iDeCo forces you to pay yourself first, before lifestyle inflation eats your raises. It's the money you can't talk yourself into spending on a bigger apartment or a newer car. It just sits there, quietly compounding, while you handle life with your other income.

Your Next Steps This Week

1. Check Your Eligibility (5 minutes)

   • If you have shakai hoken (social insurance): ✓ Eligible

   • If you're under 65: ✓ Eligible

   • If you can spare ¥5,000/month: ✓ Ready to start

2. Choose Your Provider (20 minutes)

   • Research: Rakuten Securities, SBI, or Monex

   • I use Rakuten for the interface as I also use Rakuten Bank

   • All have similar fees for iDeCo

3. Set Your Initial Target (5 minutes)

   • Start with even ¥5,000/month if you can set it aside

   • Increase after each raise

   • Remember: Time in market > timing the market

The Question That Changed My Perspective

Last week, while reviewing our family finances, my wife asked: "If Lily changes jobs as much as you have, how will she ever retire?"

That's when it hit me. We're not just building wealth for ourselves. We're modeling financial behavior for the next generation. Every month I fund my iDeCo, I'm showing her that some money is for future-you, not current-you.

Here's my question for you: How much compound growth have you already lost to job changes? And more importantly – how much more are you willing to lose before starting your iDeCo?

Hit reply and share your calculation. I read every email, and the stories help shape future newsletters.

Building wealth together,
Jason from Money Daruma

P.S. If you're thinking "I'll start iDeCo after my next job change" – that's exactly what I said at three different companies. Start now, even with ¥5,000. Your future self will thank you with millions.

Disclaimer:

The figures and examples shared here are my personal calculations and experiences, provided for educational purposes only. They do not constitute personalized financial advice. Actual returns depend on market performance, fees, and individual circumstances. Please consider consulting a licensed financial advisor or your iDeCo provider before making investment decisions.

Want to make sure you don't miss Part 2? Forward this to another international professional who might be job-hopping without iDeCo. They'll thank you in 2050.