Freelancer Pension & Retirement Fund Comparison (iDeCo vs. National Pension Fund vs. Small Enterprise Mutual Aid)
Compare three Japanese pension/retirement schemes for freelancers and sole proprietors — iDeCo, the National Pension Fund, and the Small Enterprise Mutual Aid — by tax savings and estimated future payout.
Comparing the 3 schemes (iDeCo, National Pension Fund, Small Enterprise Mutual Aid)
A summary of the key factors — contribution cap, tax benefit, payout method, and more — for choosing between the schemes.
| Feature | iDeCo (Individual-type Defined Contribution Pension) | National Pension Fund | Small Enterprise Mutual Aid |
|---|---|---|---|
| Contribution cap (monthly) | 68,000 JPY (shared cap with National Pension Fund) | 68,000 JPY (shared cap with iDeCo) | 70,000 JPY (separate from iDeCo/National Pension Fund) |
| Tax benefit | Full contribution is deductible; investment gains are also tax-free. | Full contribution is deductible as a social insurance premium deduction. | Full contribution is deductible under the small enterprise mutual aid premium deduction. |
| Payout method | Lump sum, annuity, or a mix, from age 60 (in principle no withdrawal before 60). | Lifetime annuity (1st unit) plus fixed-term annuity (2nd unit onward). | Lump sum or installments upon business closure or retirement. |
| Early cancellation | Not allowed in principle (funds are locked until age 60). | Voluntary withdrawal is not allowed (only benefit reduction or deferral). | Allowed, but voluntary cancellation before 240 months results in a loss below the total contributed. |
| Eligibility | National Pension enrollees aged 20 to under 65 (any insured category). | Category-1 National Pension enrollees (self-employed, freelancers, etc.). | Sole proprietors and executives of small businesses (subject to an employee-count cap). |
| Operator | National Pension Fund Association (investments chosen by the enrollee). | National Federation of National Pension Funds. | Organization for Small & Medium Enterprises and Regional Innovation, Japan (SME Support Japan). |
Sources: the official iDeCo website, the National Federation of National Pension Funds, and published materials from SME Support Japan on the Small Enterprise Mutual Aid (as of July 2026).
What This Pension Comparison Tool Does
This tool lets freelancers and sole proprietors compare three Japanese retirement schemes — iDeCo, the National Pension Fund, and the Small Enterprise Mutual Aid — side by side. Enter your taxable income and a monthly contribution amount, and it estimates the tax savings and future payout for each scheme.
Because the three schemes differ in contribution caps, tax treatment, and payout design, comparing them with your own numbers makes it much easier to see which combination fits your business income and retirement goals.
How to Compare the Three Pension Schemes
- Enter your taxable income This is used to estimate your marginal tax rate for the tax-saving calculation.
- Set a contribution period Choose how many years you plan to keep contributing.
- Enter a monthly contribution for each scheme Use one common amount for all three, or set a different amount for each.
- Review the comparison table Check the total contribution, tax saving, and estimated payout for each scheme side by side.
Tips for getting more out of it
- iDeCo makes the full contribution tax-deductible, and while funds are locked until age 60, investment gains inside the account are also tax-free — it is a scheme built specifically for retirement savings.
- The National Pension Fund includes a lifetime-annuity "1st unit," making it a good fit if you want a stable total payout in case of a long life.
- The Small Enterprise Mutual Aid is a "retirement fund for business owners" paid out in a lump sum or installments at closure or retirement, and it also offers low-interest loans up to the contributed amount.
- iDeCo and the National Pension Fund share a combined monthly cap of 68,000 JPY, so if you join both, you need to split the amount between them.
- Turning on "Apply one common amount to all 3 schemes" lets you compare all three using the same monthly figure at once — handy when you want to start from a total contribution budget.
When to Use This Comparison
Deciding where to start
If you are new to self-employed retirement planning, compare the three schemes to see which one to prioritize first given your budget.
Splitting the iDeCo / National Pension Fund cap
Since these two share a combined monthly cap, use the tool to test different allocations and see how the tax saving changes.
Planning around a business closure
The Small Enterprise Mutual Aid is designed as a closure/retirement fund, so comparing its payout against iDeCo helps you plan for both retirement and business risk.
Revisiting your contributions after an income change
If your taxable income changes year to year, re-running the comparison shows how your tax saving and optimal allocation shift.
Pension & Retirement Fund Glossary
- iDeCo (Individual-type Defined Contribution Pension)
- A personal retirement savings account where contributions are tax-deductible and invested by the account holder, with payouts starting at age 60.
- National Pension Fund
- A supplementary pension for Category-1 National Pension enrollees such as freelancers, combining a lifetime annuity with optional fixed-term annuities.
- Small Enterprise Mutual Aid
- A government-affiliated savings scheme for sole proprietors and small business owners, paid out as a lump sum or installments at business closure or retirement.
- Marginal tax rate
- The tax rate applied to your next yen of taxable income, used here to estimate how much tax a deductible contribution actually saves.
- Category-1 National Pension enrollee
- A National Pension category that includes self-employed people, freelancers, and students, as opposed to company employees (Category 2).
Frequently Asked Questions
Side Note — Freelancers building their own retirement fund
Unlike company employees, freelancers and sole proprietors have no employer pension or retirement benefit plan, so they need to design their own retirement savings and business-closure funds. iDeCo, the National Pension Fund, and the Small Enterprise Mutual Aid are the government's three flagship options — all offering full tax deductibility of contributions as a built-in incentive for self-reliance.
Because iDeCo and the National Pension Fund are both framed as "supplementary pensions on top of the National Pension," they share a combined monthly cap of 68,000 JPY. The Small Enterprise Mutual Aid, by contrast, is a separate scheme aimed at a sole proprietor's retirement fund, with its own independent cap of 70,000 JPY per month — meaning that using all three fully allows up to 138,000 JPY per month in tax-deductible contributions.
Which scheme to prioritize depends on how much you value liquidity. The Small Enterprise Mutual Aid, being designed as an "owner's retirement fund," offers the flexibility of a low-interest loan against your contributions if your business runs short on cash, while iDeCo cannot be withdrawn at all before age 60 in principle. Deciding the right allocation means weighing not just the immediate tax savings, but also your cash-flow needs if the business does not go as planned.