Investing while studying abroad in the US

[anotherkk]

Hello,

I'm a 19 y.o. Japanese student at an American uni. I'm getting started on managing my finances during winter break, and RetireJapan has been a tremendous resource in introducing me to different investment options in Japan.

I wanted to know if opening a US investment account while in college is a good idea—either putting money into a Roth IRA/401(k) or investing in an index fund (S&P). Although I'm not a US citizen, I have an SSN, and I can see myself working and living between Japan and the US over my lifetime. I'm not currently earning money, but I will likely get a paid research assistant position on-campus soon.

Are there any benefits to investing in the US? Or, is the hassle with taxes and other things just not worth it, and I should opt for iDeCo once I turn 20 instead? (I don't have any income streams in yen as of now, but I used to and again could through tutoring, internships, etc.)

I would appreciate any other advice you could give a college student navigating personal finance at this stage of life.

Thanks!

[TokyoWart]

Sounds like an interesting experience ahead! For US retirement account contributions you need earned income to be eligible for contributions but you don’t need to be a US citizen. Some school related income can be considered “earned” (eg when you have to work as a teaching assistant) but most scholarships are not. I think if I were in your situation I would try to invest in a regular taxable account while in the US just for the experience so I could compare with Japan in the future. The worst case scenario is that you need to liquidate the account when you return to Japan. For a Roth account you can take out the original contribution at any time but there is a 5 year rule on removing anything that grew in account so it’s actually not the best choice if you are uncertain about being able to maintain the account.