Now available on Rakuten
From this month you can now make changes to your NISA account for 2022, at least on Rakuten (I assume it will also be possible to do this with other providers).
There are two main things you might want to consider: rolling over your 2017 ordinary NISA account, and changing your account from ordinary NISA to tsumitate NISA (or vice versa).
Rolling over your 2017 ordinary NISA account
If you have an ordinary NISA account from 2017, and are planning to continue using ordinary NISA next year, you can choose to roll over some, all, or none of your investments. Rolling over investments uses up your 2022 allowance at the current value, BUT you are allowed to go over the 1.2 million yen limit for the year.
In my case I saw my 2017 NISA was now worth 1.8m yen, so I decided to roll it over, thus getting another five years of tax-free growth for those investments but using up my entire 2022 NISA allowance before the year even starts.
To do this on Rakuten Securities, just click on the NISA tab. You then have two ways to get to the rollover page: either click on the orange banner or select the ‘rollover’ tab.
On that screen you will be able to select any investments you have to be rolled over using checkboxes. Using the checkboxes you can select some, all, or none of the investments. Each investment is treated separately, but I believe you can’t partially roll things over, although I guess you could do so by selling some and rolling over the remainder (not sure why you would want to do that though).
Switching between ordinary and tsumitate NISA
You can also change to a different type of NISA account in 2022 if you want to. To do that go to the ‘区分変更’ tab in the NISA menu.
From there you can choose to switch your 2022 account from ordinary to tsumitate, or vice versa.
My wife will be switching to tsumitate from next year for a couple of reasons: her 2017 NISA account is only around 500,000 yen, so it doesn’t seem worth rolling it over, and I would like to simplify and reduce our investing going forwards. I also like the idea of having a tsumitate NISA ladder to deliver cash to us in the future.
At least on Rakuten Securities, both of these procedures are very easy to do and take less than a minute to carry out online.
How about you? What are you planning to do with your 2022 NISA account?
I’m going through this process for the first time now. My 2017 NISA is mainly a few funds with higher fees that I’d rather get rid of, and one Japanese domestic stock that should probably go despite being 80% up. The total 2017 balance is up for a total of around 650,000 yen so I’m not sure if I’d be better off selling the lot and investing in more emaxis all country or just rolling it over.
You could probably make the case for either, but if you don’t want to own the investments long-term selling them might be good 😀
If you switch from regular NISA to tsumitate NISA, can you still rollover part (or all) of your NISA allowance for 2017? Or does it mean you have to start over?
You can’t currently rollover into tsumitate NISA, so if you switched to tsumitate for 2022 your 2017 NISA holdings would just be moved into your taxable account normally at the end of this year.
I have a basic question about the rollover thing. Does the amount that you rollover count to calculate the investable amount? For example, if you rollover the full 1.2M, then you couldn’t invest more in that year, right? And if you have more than 1.2M in 2017, then you can rollover only a part of it (1.2M max). Is this how it works? Thanks!
Yes, you use up your 2022 allowance, up to the maximum (if you roll over 600,000, you would only have another 600,000 to invest). However, there is no limit as to how much you can roll over. So if you were lucky and your 2017 NISA is now worth 2.5m, you can roll over the full 2.5m into your 2022 NISA (but would not be able to invest any new money).
Ah, it’s good to know that you can rollover even more than the NISA yearly limit. I didn’t know that. Thanks a lot!
Now that I know that, I don’t see NISA as superior compared to tsumitate NISA as I used to. If all you care about is avoiding taxes (and that’s what all this is about), Tsumitate NISA seems to allow a bigger amount. For example, in 20 years, Tsumitate NISA allows avoiding taxes in 20*400k=8M, but NISA allows only 4*1.2M=4.8M. Am I wrong?
A few people have modeled this with spreadsheets on the RetireJapan forum: the results show very little difference between investing 1.2m a year into ordinary NISA, and investing 400,000 a year into tsumitate NISA and 800,000 yen a year into a taxable account over the long term.
And actual stock market returns could easily make one or the other better. So I wouldn’t worry about it too much. Just choose whichever one you want and continue using it for as long as possible 🙂
5 x 1.2M = 6M for regular NISA.
As you said, tsumitate allows for more investment tax-free.
But the regular allows you to get more money working faster.
Who is to say which is better in the long run. Either should work well as a strategy for long-term investment.
Hi Ben,
I just got my Rakuten bank and the accompanying mobile app. Both took quite a bit of effort to get through the Japanese (I thought everyone at Raukten has to speak some English?! @Mikitani社長). Anyway, I spent all of my social capital just opening the accounts so it’s tough to ask for intensive help again…
I’m really interested in opening NISA and iDECO through Rakuten online. I appreciate your screenshots about adjustment on this blog post. Wondering if there is any similar step by step English help about opening up a Rakuten NISA or iDECO account on Retire Japan?
Not yet, but it seems like it would be useful. One issue is that the brokers tend to change the process/their websites, which then makes the guides less useful. Also in order to open an account you can’t have an account, etc.
The process is not too difficult, and you can apply for both at the same time.
Sorry, that’s not a particularly helpful answer!