NISA and iDeCo both grow safe from capital gains tax.
iDeCo payments are made out of pre-tax income, NISA are not.
At withdrawal, iDeco is taxable as a retirement bonus for lump sums or as pension income for a monthly pension (or a mixture of both).
But what happens when I draw down NISA in retirement? The iDeCo guide goes into tax but the NISA doesn’t. Is it all just tax free for ever…?
Taxation on NISA drawdown?
Re: Taxation on NISA drawdown?
New NISA is just tax free forever (prior version was only for 5 years) in Japan.
- RetireJapan
- Site Admin
- Posts: 4710
- Joined: Wed Aug 02, 2017 6:57 am
- Location: Sendai
- Contact:
Re: Taxation on NISA drawdown?
Yep.
So filling up a new NISA account as soon as possible might just be the only thing most people will need to do in Japan to sort out their finances once and for all.
Fill it by 45, then leave it to grow for 20 years (18m x4 = 72m or so?) and then sell it as needed in retirement to supplement pensions etc.
English teacher and writer. RetireJapan founder. Avid reader.
eMaxis Slim Shady
eMaxis Slim Shady
Re: Taxation on NISA drawdown?
This plus iDeCo, even at 23,000 per month, if planning to stay in Japan.RetireJapan wrote: ↑Wed Jul 10, 2024 2:33 am
Fill it by 45, then leave it to grow for 20 years (18m x4 = 72m or so?) and then sell it as needed in retirement to supplement pensions etc.
If I can 'encourage' my kids to do this when they start work, they will hopefully not have too many money worries.
Aiming to retire at 60 and live for a while longer. 95% index funds (eMaxis Slim etc), 5% Japanese dividend stocks.
Re: Taxation on NISA drawdown?
OK, nice. Thanks all. So when I retire, I can simply sell, say, ¥100m of NISA and transfer it to my local bank? Do we simply not declare that ¥100m that suddenly appears in my account on our tax return? Won't the bank or tax office ask where it's from? (I don't do our taxes so not sure how things work).
Re: Taxation on NISA drawdown?
Because the NISA is not taxable there isn't anything you need to report when you sell. Banks in Japan may ask about the source of large money transfers but if they don't ask there isn't anything you need to. If you are subject to reporting assets then the NISA account would be included in your asset declaration each year.banders wrote: ↑Wed Jul 10, 2024 4:01 am OK, nice. Thanks all. So when I retire, I can simply sell, say, ¥100m of NISA and transfer it to my local bank? Do we simply not declare that ¥100m that suddenly appears in my account on our tax return? Won't the bank or tax office ask where it's from? (I don't do our taxes so not sure how things work).
-
- Sensei
- Posts: 1563
- Joined: Tue Aug 15, 2017 9:44 am
Re: Taxation on NISA drawdown?
A bank may caution a new depositor that that max protected/insured threshold is well below ¥100M.