Simple Q&A - NISA

[RetireJapan]

A great point, although...

while RetireJapan is definitely for everyone, my impression is that most of our readers (and the majority of people I interact with) are very much in the 'lifer' camp

If only if they had based NISA on a simpler system, without ifs, buts and uncertain choices, like the UK's ISA perhaps?

My guess is that the tax ministry could not bear to let go of capital gains taxes indefinitely, so they nerfed the NISA system with these stupid time limits. As a bonus they also make it hard to understand so even fewer people use it

[adamu]

2. Is rollover a solution for this? Can the 300k go into the next year's NISA? Probably not, because that NISA is restricted to be 1.2m! Or is it a different number? (I might have read Ben mentioning a higher valued rollover Sorry if I have misread. If possible what's the limit then?)

Yes, that is a good reason to roll over, assuming you think the price will recover again. Discussed here:

https://retirewiki.jp/wiki/NISA#Rollover

[Dee.Geo]

2. Is rollover a solution for this? Can the 300k go into the next year's NISA? Probably not, because that NISA is restricted to be 1.2m! Or is it a different number? (I might have read Ben mentioning a higher valued rollover Sorry if I have misread. If possible what's the limit then?)

Yes, that is a good reason to roll over, assuming you think the price will recover again. Discussed here:

https://retirewiki.jp/wiki/NISA#Rollover

Excellent, that helps! Thanks a lot.
Point 1 there says "The asset value has grown to more than the annual allowance. In this case the full value can be rolled over, allowing for the tax-protected gains to be protected for another year, potentially making more capital gains tax free gains."

Just to confirm, using my previous example, I can rollover the whole 300k into the next year's NISA.

[Dee.Geo]

Thanks to RetireJapan site, guidebook and forum I am close to opening the NISA account. RJ guide makes it clear that one of the disadvantages of NISA is the way the valuation of capital is done after 5 years. It's the actual value of that day even if your capital depreciated. So my questions are:

(Using the RJ guide example of 500k going down to 300k after 5 years)
1. How would one deal with it? anyone got to do something like that yet?
2. Is rollover a solution for this? Can the 300k go into the next year's NISA? Probably not, because that NISA is restricted to be 1.2m! Or is it a different number? (I might have read Ben mentioning a higher valued rollover Sorry if I have misread. If possible what's the limit then?)

It's understandable that if your capital depreciated that badly then paying the 20% gain tax is not your No.1 problem. And at that stage you would wait till it gets back to 550k in case you wanna free up the money. Still, I feel this limitation deserves a clarification before I venture in.

I deal with it by ignoring the Regular Nisa, and embracing the Tsumutate Nisa.

Tsumitate NIsa + Taxable account will match a Nisas gains very closely.* It also avoid the issue of being stuck in long-term bear market. **

A low-cost accumulating index fund (ala-Emaxis Slim All Country) will outperform 95%+ of active investors and stock pickers.

...................

*Those who contribute 1.2 million on Jan.1st in a lumpsum are at an advantage.
**Assuming no bear market lasts 20 years!

Could you explain that 1.2m part? You're suggesting TNISA, then how is it 1.2m? Do you mean 1.2m divided into TNISA and taxable account invested at the beginning of the year? Would that match up with the NISA 1.2m? Could you please explain how?

[adamu]

Just to confirm, using my previous example, I can rollover the whole 300k into the next year's NISA.

Yes. You can roll over all or part of your expiring balance, even if it's over 1.2M

[zeroshiki]

Thanks to RetireJapan site, guidebook and forum I am close to opening the NISA account. RJ guide makes it clear that one of the disadvantages of NISA is the way the valuation of capital is done after 5 years. It's the actual value of that day even if your capital depreciated. So my questions are:

(Using the RJ guide example of 500k going down to 300k after 5 years)
1. How would one deal with it? anyone got to do something like that yet?
2. Is rollover a solution for this? Can the 300k go into the next year's NISA? Probably not, because that NISA is restricted to be 1.2m! Or is it a different number? (I might have read Ben mentioning a higher valued rollover Sorry if I have misread. If possible what's the limit then?)

It's understandable that if your capital depreciated that badly then paying the 20% gain tax is not your No.1 problem. And at that stage you would wait till it gets back to 550k in case you wanna free up the money. Still, I feel this limitation deserves a clarification before I venture in.

I deal with it by ignoring the Regular Nisa, and embracing the Tsumutate Nisa.

Tsumitate NIsa + Taxable account will match a Nisas gains very closely.* It also avoid the issue of being stuck in long-term bear market. **

A low-cost accumulating index fund (ala-Emaxis Slim All Country) will outperform 95%+ of active investors and stock pickers.

...................

*Those who contribute 1.2 million on Jan.1st in a lumpsum are at an advantage.
**Assuming no bear market lasts 20 years!

Could you explain that 1.2m part? You're suggesting TNISA, then how is it 1.2m? Do you mean 1.2m divided into TNISA and taxable account invested at the beginning of the year? Would that match up with the NISA 1.2m? Could you please explain how?

They're saying that if you compare NISA vs TNISA+Taxable, NISA wins out on average if you lumpsump 1.2M in January. In almost all other scenarios, using TNISA + Taxable wins out.

[MBK]

I have a question about investing through NISA. I`m using Rakuten and set up Tsumitate NISA for myself and NISA for my wife.

I started my Tsumitate and could do it without issue as there is dedicated "Purchase via Tsumitate NISA" option when purchasing.

I`m not sure about how to start purchasing through my wife`s NISA as I do not see any "Purchase via NISA" option. Are "Spot Purchases (スポット購入) " automatically treated as NISA purchases as long as they are within the yearly limit of 1,200,000 JPY?

[goran]

I have a question about investing through NISA. I`m using Rakuten and set up Tsumitate NISA for myself and NISA for my wife.

I started my Tsumitate and could do it without issue as there is dedicated "Purchase via Tsumitate NISA" option when purchasing.

I`m not sure about how to start purchasing through my wife`s NISA as I do not see any "Purchase via NISA" option. Are "Spot Purchases (スポット購入) " automatically treated as NISA purchases as long as they are within the yearly limit of 1,200,000 JPY?

At the bottom part of the Sport Purchase page, after putting in the amount that you purchase and everything, it will give you an option to select NISA, tokutei and something like that. You can select there.

[MBK]

Thank you very much for a prompt reply. Got it now!

[HeavyMetal]

Maybe dumb question but can I keep NISA after I move overseas??
The only reason to keep would be the rate, don't want to sell assets with loss just because I had leave Japan (if such timing will happen). Considering I'd purchase US/JPY indexes only, they would grow back up sooner or later. Then I'd sell them, and transfer money to my Prestia bank, which I can keep active even being overseas.