You can try to game it (by doing 5 years NISA + switch to Tsumitate), but then you won't be able to roll over your original NISA. So it'll get max 5 years protection. If you start with Tsumitate from the beginning, you get 20 years from the start.UnderscoreEX wrote: ↑Wed Aug 18, 2021 9:12 pm 1) As I have heard there is an option to extend from the 5y Nisa to Tsumitate Nisa, would you advise to start with 5 year and switch to 20 afterwards? (I saw some threads about maximizing your Nisa investments doing this however I am not sure if it was only an option for me starting out)
Better to just keep it simple and start with Tsumitate. You can always top up extra in a taxable account.
No. ETFs are just funds traded on the stock exchange. With iDeCO and Tsumitate, you just buy the funds direct rather than on the exchange. The only thing different is that you can't buy regular stocks. Japanese funds still invest internationally and there are plenty of options.UnderscoreEX wrote: ↑Wed Aug 18, 2021 9:12 pm 2) Do you think that i am missing out by being limited to Japanese funds? Stocks and ETFs were the main recommendations everywhere I have searched before this.
For Rakuten iDeCo, the simplest option is the Rakuten Whole World Index fund.UnderscoreEX wrote: ↑Wed Aug 18, 2021 9:12 pm Would anyone have a recommendation for the best options with Rakuten for Nisa and iDeCo?
In my travels so far I have heard of
- Rakuten US Stock index fund, which is good for passive investment with low purchasing fees
- VTI (vanguard) which was not recommended for passively investing, because of its high transfer fee.
This fund is a wrapper of the VT ETF. So it's more expensive than buying VT directly, but you also get (some) tax protection.
Consider that VT itself is 0.08% but the Rakuten fund is 0.212%.
eMaxis Slim All Country for comparison is 0.1144%
For Rakuten Tsumitate NISA, eMaxis Slim All Country is available.
It depends what you buy. If the Japanese funds subsequently buy foreign stocks or ETFs, you will be exposed to the taxation that comes with that. The Rakuten fund is 100% VT, a US ETF. So 100% of the dividends (including Japanese and other non-US dividends) are subject to US Tax, even inside an iDeCo. At least, that's my understanding.UnderscoreEX wrote: ↑Wed Aug 18, 2021 9:12 pm Would this still apply to me? as ETFs and Stocks aren't an option with Rakuten?
Maybe I am confusing US funds with Japanese funds of US stocks (the terminology is still getting hard to grasp)
Summary
If you're set on Rakuten.
iDeCO: 100% 楽天・全世界株式インデックス・ファンド
Tsumitate: 100% eMAXIS Slim 全世界株式(オール・カントリー)
Is what I would do.