NISA after 5 years

[RetireJapan]

Edit : I feel like I can't open a NISA account because I started living in Japan in October 2014...　I have to wait until January 2018 that the 2nd period begins.

Kiyora, did you ask the provider about that point?

I just found this on the Monex website, it seems to suggest that you just need to be living here on Jan 1st of the year you want to open the NISA account for (ie the text you copied might refer to someone opening an account in 2014?

■ 対象者
口座を開設する年の1月1日時点で、20歳以上の日本の住居者、または、20歳以上で恒久的施設を保有する非住居者が対象です。
https://info.monex.co.jp/nisa/about.htm ... r=599eb5d7

[Kiyora999]

Kiyora, did you ask the provider about that point?

I just found this on the Monex website, it seems to suggest that you just need to be living here on Jan 1st of the year you want to open the NISA account for (ie the text you copied might refer to someone opening an account in 2014?

■ 対象者
口座を開設する年の1月1日時点で、20歳以上の日本の住居者、または、20歳以上で恒久的施設を保有する非住居者が対象です。
https://info.monex.co.jp/nisa/about.htm ... r=599eb5d7

Unfortunately yes...

I checked Monex website just in case, but it's written the same thing when you look to the documents needed to open the account:(
But it's OK, I didn't have enough time to read the books I bought in Japanese about investing anyway and I think I'll also be too busy to read them in September with my long business trip...

I may use all my 2018 allocation or a big part of it in the beginning of the year and I'll try ideco in the beginning of october!

[Steve]

I just got my next year's allocation at the beginning of the year each time. I suspect it might be different from the second 5-year period (from 2018), but we'll have to wait and see until January.

Thanks for putting my mind at ease, apologies for the late response.

[Sergey]

Edit : I feel like I can't open a NISA account because I started living in Japan in October 2014...　I have to wait until January 2018 that the 2nd period begins.

Rakuten Securities has this case covered in their FAQ - http://faq.rakuten-sec.co.jp/faq_detail ... tegory=512
You should be able to open NISA even if you were overseas in 2013.

[adamu]

Opening a NISA account takes a long time (months!), so you should apply now if you want to start using it in 2018.

It doesn't matter if the account is opened early, you can just not buy anything until 2018 and start using your 2018 allowance then.

Kiyora, I think having to wait til 2018 could be a good thing for you. If you invested in nov of 2017, you'd be burning a full year of tax free gains & dividends. On the other hand, they say investing early is good too. Luckily you don't have to make the choice!

I don't agree with this. Since your plan is to invest 100,000 a month, you're better to start as soon as possible (if you have the money now). You're planning to use your full 2018 allowance, so if you can get some extra in this year too, that's an added bonus

P.S. I started living in Japan in May 2014 and I've been using the NISA since 2015 no problem.

[Akatani]

Let's just have a friendly debate with this. We're talking about two months - nov & dec '17. Starting a NISA then would mean he misses most of the dividend payouts, so he's just banking on a rise in price in those two months. At the end of the NISA year your totals are locked in, so if there's a drop in those two months he loses money, without it even counting as a loss for tax harvesting.
Am I looking at this incorrectly?

If he plans to invest 100,000 a month and has 400,000 in cash, I'd say invest the 100,000/month in a regular taxable account until the new NISA year starts in January. Then, depending on the price increase or decrease of the taxable investments, either sell them and rebuy them in the NISA the same day, or use the extra cash if it's more advantageous.

[RetireJapan]

The thing to remember is that a given year of NISA starts in the year you open the account then continues for the next four years. So if Kiyora has extra cash, investing in the 2017 NISA would allow tax sheltering that money for 50 months.

[adamu]

Further to RetireJapan's point: Once you have the two months invested for this year, then in January, assuming you have the money, you can put more money away for another 5 years. So by not waiting, you're getting more tax protection in total. In fact if money was not a problem, investing 1.2M in November is the best option, then doing another 1.2M (or averaging over 100k/mo) from January.

Regarding the point about locking in at a loss. As mentioned it's not this year that it's locked in, but in four years from January. It could still happen then, though, that's the flaw with the NISA design at the moment.

Anyway I think this is mostly moot as the NISA probably won't be ready in time.

[Akatani]

I'm having trouble understanding why you guys think that getting 50 months tax free is better than waiting 2 months and then getting 60 months of tax free investing.

[RetireJapan]

It's better if you have the money to fund 2017 AND 2018. If you only have the money for one year, then sure, wait until January, but if you can put in money this year and fully fund next year you might as well take advantage of this year's NISA allowance too