iDeCo SBI or Monex + investment plan review

[babysteps]

Hi Guys,

I have been following the blog & forum for sometime now and its been quite a learning experience for me.

I am 30 years old and working in tech in Tokyo.

After going through the blog, I decided to start NISA and iDeCo with the following investment strategy.

• Start with 100% equity and do a step wise reduction to cash or low duration bonds near retirement.

• Equity - Low cost index fund - emaxis slim all country/ another fund which is similar

• Bonds - Could not find any low duration bonds (1 year to 3 years) , so I will keep looking. If I dont find any, I will switch to cash as I get older

• NISA - Will be kept at 100% equity

• iDeCo - Will contain equity and bonds

• I want to have both NISA and iDeCo with the same provider to make it a bit easier to operate.

I was looking at the providers and how to invest. I have a few questions the same.


Questions (All of them about iDeCo)

1. SBI seem to have select and original options . Whats the difference? Do I have to select 1 of them?

2. For emaxis slim all country the website gives the fund cost as 0.1144% but Shintaro-money puts the real cost as 0.209%.
Which one is correct ?

3. I am interested in emaxis slim all country but unfortunately Rakuten and SBI doesn’t have it.
SBI seems to have SBI Global Equity Index Fund. Is this a reasonable alternative to eMaxis Slim all country?
According to Shintaro money the cost seems to be lower (0.133% )

4. Should I select SBI or Monex ? SBI seems to have a lot more options for bonds which I could use later.

5. When I do 振り込み to SBI or Monex for NISA / iDeCo purchase , will banks charge me money for each transfer
(apart from the 171円 which the provider charges me)

6. Does my investment strategy sound all right ?

[beanhead]

If I were 30, I would not be worrying about bonds, especially in an iDeCo.
You should purchase funds you think will grow the most in the iDeCo, to take advantage of the growth not being taxed.

Keep extra cash on hand as a safety net, or buy bonds in a regular account perhaps. But even then, my suggestion is to revisit bonds in about 20 years time when you want to lock in some of your gains...

[Moneymatters]

You’ll probably want two investment accounts eventually so splitting NISA and iDeco to get the products you want should be fine. The effort to set up the two types of accounts will be largely duplicated even if they are through the same provider.

Yes. You would have another login Id but that’s about it. NISA and Ideco are very different beasts.

I think you have to choose select or original. I’m guessing there was a revamp and they don’t want people to have been misled by expired advertising materials. Yikes. I’ve lived here too long if I think like that. Let’s assume I’m wrong on the reason. I chose select for what it’s worth.

SBI does well in the rankings and seems to get the most business in terms of new accounts. Safety in numbers and all that. The SBI Netbank interface is nice so I’m hoping the shoken interface catches up over time.
On the other hand there is a whole Rakuten eco system involving credit cards and maybe points for tsumitate payments. That stuff leaves me cold but there is information elsewhere in the forum about this.

You haven’t mentioned your investment goals, if you’ll need some of this money for a house purchase mid term for example. Or if you plan to invest above the NISA and ideco limits. But you basically have a 20 year head start on me so congrats on that! Maxing the tax advantaged accounts is the smart decision.

[babysteps]

@beanhead thank you for the reply.

If I were 30, I would not be worrying about bonds, especially in an iDeCo.
You should purchase funds you think will grow the most in the iDeCo, to take advantage of the growth not being taxed.

I understand and agree on that. Considering I have 30+ years(hopefully) for retirement I plan on switching it only towards the end.
But I dont know how to protect myself from market crashes, if it happens close to the retirement.

or buy bonds in a regular account perhaps

I understand. Since the capital gains would be low, even if I keep it in regular accounts, the tax outgo would be negligible

@Moneymatters, thank you for the reply
Regarding my investment goals and life-plan, I just have a rough idea, let me share that.

1. I have been in Japan for a couple of years now and I do plan on working here till retirement , but it might change in the future depending on the situation. 
For now I am assuming that I will be here till I retire

2. Goal 1: Retirement
- Timeline: 30-35 years.
- Cost: I estimate that I will need around 50 million for retirement
- How: Will use NISA + iDeCo for this goal

3. Goal 2: House
- Timeline: Plan to buy one in 7-8 years
- Cost: I will need 10-20% of cost as downpayment + interior etc
- How: Its too short for equity. So will save in cash for this one

4. Goal 3: Child University
- Timeline : Don’t have a child yet, so this goal might be in 20-25 years
- Cost: Private universities in Japan cost around 7 mill now, so in 25 years, 15 million (with 3% inflation)
- How: Will use a regular broking account and invested separately.

You’ll probably want two investment accounts eventually so splitting NISA and iDeco to get the products you want should be fine. The effort to set up the two types of accounts will be largely duplicated even if they are through the same provider.

Yes. You would have another login Id but that’s about it. NISA and Ideco are very different beasts.

I understand. I was thinking of the ease of operation too, having both from a single login will be slightly easier.
But as you suggested, it might be better to look at available funds and then choose accordingly.

I think you have to choose select or original. I’m guessing there was a revamp and they don’t want people to have been misled by expired advertising materials. Yikes. I’ve lived here too long if I think like that. Let’s assume I’m wrong on the reason. I chose select for what it’s worth.

Got it

On the other hand there is a whole Rakuten eco system involving credit cards and maybe points for tsumitate payments. That stuff leaves me cold but there is information elsewhere in the forum about this.

I dont want to complicate my investments. I want to choose it solely based on fund availability and cost of funds.
Running after points in equity investment feels like being pound foolish penny wise to me

But you basically have a 20 year head start on me so congrats on that!

I have Ben and you guys to thank for that

[adamu]

I was thinking of the ease of operation too, having both from a single login will be slightly easier.
But as you suggested, it might be better to look at available funds and then choose accordingly.

iDeCo accounts are usually managed as a completely separate system from the main platform, so even if the provider is nominally the same, you will still have two completely different logins (or a hack to make the different log in look like part of the main platform).

For example.
SBI main site: https://www.sbisec.co.jp/ETGate
SBI iDeCo: https://www.benefit401k.com/

Monex main site: https://www.monex.co.jp/
Monex ideco: https://www.jis-t.ne.jp/

Rakuten main site: https://www.rakuten-sec.co.jp/
Rakuten iDeco: https://dc.rakuten-sec.co.jp/ (actually they use JS&T, the same as Monex, and this is just a wrapper UI AFAIK).

So best to just pick the iDeCo provider independently.

...and I added this info to https://retirewiki.jp/wiki/IDeCo, naturally

[RetireJapan]

This is true for Monex and SBI, but not for Rakuten. Which makes Rakuten slightly easier to use IMHO. But it's not a huge difference.

[adamu]

This is true for Monex and SBI, but not for Rakuten. Which makes Rakuten slightly easier to use IMHO.

Do you mean that Rakuten has a single login that works for both? Can you do everything you need to for iDeCo from within your main account without using an external service?

[RetireJapan]

Yep. I assumed they all did iDeCo from the same site/login, but my wife's SBI account links to an external service with a different login, and people tell me Monex does the same.

[adamu]

Ah ok - I'll update the Rakuten info, thanks.

[babysteps]

@ben and @adam , thanks for your replies.

So best to just pick the iDeCo provider independently.

Got it.

I read up a bit more about SBI Global Equity Index Fund and realized that this is a wrapper fund on 2 ETF's . Which pbly mean taxation issues. Yikes.

So Emaxis Slim All Country seems like the best option, which means that I have to go with Monex. ¯\_(ツ)_/¯