Starting NISA / iDeCo while living abroad

[no6una9a]

Hello,

first of all thanx a lot for this forum being a great source of information. It is always a pleasure digging throught the articles and learning new things about how to RetireJapan.

My wife (Japanese, 55 years old) and myself (German, 56 years old) are living in Germany. Being 60 years old I will get an early retirement plan offered by the IT company I am working for. We decided to accept it and will move to Japan for retirement in 4 years. I will get goverment pension with the age of 63 years old and payments from private pensions. My wife is currently paying into Japanese Kokumin Nenkin.

Since I read about NISA / iDeCo I am wondering if my wife (and maybe myself as well) would be able to use one of them right now. I read the RetireWiki comparison about it and it seems we have to wait until we moved to Japan to be able to:

iDeCo: [Eligibility] -> Those enrolled in the Japanese pension system / [What happens if you leave Japan] -> Can manage funds from abroad but not make contributions
=> Since we can not make contributions means we can't use it!?

NISA / Tsumitate NISA: [Eligibility] -> Residents aged 20+ (18+ from 2023)
=> Since we are not Japan residents means we can't use it!?

Am I right with those two statements? If that's the case there is no need for me to dig any deeper in the NISA / iDeCo subject.

Kind regards,
No6una9a

[beanhead]

You are correct, you will not be able to open either account unless you live here. You will not be able to open a brokerage account in Japan without address and proof of residence here (driving license, MyNumber card etc).

[adamu]

My wife is currently paying into Japanese Kokumin Nenkin.

As a non resident foreigner, you will not be able to. But for your wife as a pension-paying Japanese, she can pay into an iDeCo account. However, it will only save her Japanese income tax, German taxes will still be due. It could be worth it for the capital gains protection though, considering you are planning to retire in Japan. Just be careful, as you could end up paying German taxes on the money that goes in, then Japanese taxes on the money that eventually comes out.

The article needs to be updated, as the rules changed from May this year, allowing Japanese to contribute to iDeCo from abroad, as long as they are also paying the pension.

[beanhead]

As a non resident foreigner, you will not be able to. But for your wife as a pension-paying Japanese, she can pay into an iDeCo account.

Good point. Caveat is that she would need an existing brokerage account in Japan, wouldn't she? And some sort of proof that she lives here?

[adamu]

Good point. Caveat is that she would need an existing brokerage account in Japan, wouldn't she? And some sort of proof that she lives here?

Don't think so. Here's SBI's instructions, for example: https://go.sbisec.co.jp/prd/ideco/appli ... 20518.html

[beanhead]

Don't think so. Here's SBI's instructions, for example: https://go.sbisec.co.jp/prd/ideco/appli ... 20518.html

Ah, that is interesting. Such flexibility!!

[no6una9a]

Thanx for the quick responses!

Just be careful, as you could end up paying German taxes on the money that goes in, then Japanese taxes on the money that eventually comes out.

Indeed, thats one big topic out of a rather big list of items I still have to investigate. There is a DE-JP double taxation agreement, but thats another story.

Here's SBI's instructions, for example: https://go.sbisec.co.jp/prd/ideco/appli ... 20518.html

Cool, I will put these information in my travel bag and will have a walk to the next SBI office during our next visit to Japan.

So I will have a closer look at NISA and might come back to this list with more questions. I have basically no experience in stock trading. The primary goal using NISA might be to avoid capital gain taxing, right? Basically, NISA means I get an online brokerage account which I can use to buy/hold/sell some predefined securities cleverly enough to earn lots of capital gain at the end of the year, right?

However, it will only save her Japanese income tax

This referes to capital gain together with any other income money (pension, part-time work, gambling, ...) which is subject to income tax, right?