Strategy for the 2025 NISA

[sutebayashi]

Sadly it would pay tax if we make a withdrawal.

Drat, the pesky problem of the gains not being all yours when you realize them!

it will be sold at the rate in December and the rebought asap in January.

…

My thinking is move it to the NISA!

Any reasons NOT to move it?

I agree with your thinking, especially given that you don’t intend to fill your NiSA up with fresh funds next year.

What I might offer though is to not be too eager on doing it in December / January. I would take a wait and see approach. After a possible Santa Claus rally may not be the best time to sell. (If the world is collapsing in the wake of upcoming political events then maybe it would be but that’s not my base case).
(secondarily if you do furusato nozei then selling in the new year is definitely preferable since you’d leave yourself little time at year end to do the furusato nozei donation)

Imagine if the market corrects by 10% some time next year (or currency movement creates a similar effect) and you sell then - you would realize less profit (boohoo), and thus have less tax to pay (hooray), before reinvesting into nisa at a lower price.

When to sell is the difficult part obviously, have to see what is going on in the world. But to avoid time out of the market, you could consider splitting your selling / buying into smaller chunks, so that after you get cash for the first sale you can sell the next tranche and buy back a tranche in nisa at the same time, minimizing the amount of money you have out of the market - assuming you are working with no load mutual funds, and don’t pay transaction costs.

Whether it is worth the bother to try to save on some tax comes down to you
If you say sell 2.6 million worth, realize up to 1.3 million in taxable profit, it’d make for circa 260,000 capital gains tax. But if you could sell lower and pay only 200,000 capital gains say, that’d be the difference… 60,000 yen immediately but tax protected thereafter.
Personally I will try to amuse myself in this way, for even less possible tax savings

[adamu]

Worst case:

You sell in December, occurring 20% CGT bill.
The price goes up before you can rebuy.
You are at a loss, but still have to pay the tax.

If you sell early and the market gains between when you sell and the end of the year, you lose out on the tax free gains.

This is why I think selling existing investments is a distraction. It's going to encourage you to do market timing, expose you to risk of being out of the market, and distract from the much simpler, more important, and beneficial habit of regular saving.

[goodandbadjapan]

Sorry to take this slightly off tangent but it does relate to next year's NISA - does the tsumitate bit you have set up for this year automatically start up again next year or do we need to do something to get it going again?

[RetireJapan]

Sorry to take this slightly off tangent but it does relate to next year's NISA - does the tsumitate bit you have set up for this year automatically start up again next year or do we need to do something to get it going again?

Once you set it up it continues running until you cancel or change it (or there are not enough funds for the payment to go through).

[Tsumitate Wrestler]

Sorry to take this slightly off tangent but it does relate to next year's NISA - does the tsumitate bit you have set up for this year automatically start up again next year or do we need to do something to get it going again?

Once you set it up it continues running until you cancel or change it (or there are not enough funds for the payment to go through).

Most Security companies will automatically cancel a tsumitate setting after X number of failures, due to insufficient funds.

It is a bit different with each broker.

[goodandbadjapan]

Sorry to take this slightly off tangent but it does relate to next year's NISA - does the tsumitate bit you have set up for this year automatically start up again next year or do we need to do something to get it going again?

Once you set it up it continues running until you cancel or change it (or there are not enough funds for the payment to go through).

Thank you!

[Bubblegun]

Worst case:

You sell in December, occurring 20% CGT bill.
The price goes up before you can rebuy.
You are at a loss, but still have to pay the tax.

If you sell early and the market gains between when you sell and the end of the year, you lose out on the tax free gains.

This is why I think selling existing investments is a distraction. It's going to encourage you to do market timing, expose you to risk of being out of the market, and distract from the much simpler, more important, and beneficial habit of regular saving.

Interesting. I wonder! If only we had that crystal ball! I will have to chat with the the family, and see what they think.

I'm inclined to sell some, and move it to the NISA because we can't move it all anyway. DCA but with larger amounts. Maybe just do it, cause we can't time the market but we can use that time IN THE NISA MARKET It's that ANALYSIS PARALYSIS. Over thinking everthing.
https://www.investopedia.com/terms/a/an ... alysis.asp

[adamu]

There is no NISA market though, there's only tax protected or not tax protected. By selling existing funds, you are temporarily taking them out of the market. That's not a risk-free operation.

[beanhead]

Interesting. I wonder! If only we had that crystal ball! I will have to chat with the the family, and see what they think.

I'm inclined to sell some, and move it to the NISA because we can't move it all anyway. DCA but with larger amounts. Maybe just do it, cause we can't time the market but we can use that time IN THE NISA MARKET It's that ANALYSIS PARALYSIS. Over thinking everthing.
https://www.investopedia.com/terms/a/an ... alysis.asp

Anyone who has money invested in the Tokutei account and cannot save 3.6M per year has the same kind of thoughts, I think.
As you get closer to 60 or 65 or whatever, there is the desire to fill up the NISA as quickly as possible, which of course means selling taxable assets.

I may trick myself into not worrying about re-purchase prices by buying different assets. So sell S&P500 and buy All-Country or sell All-Country and buy the ex-Japan fund

[Tsumitate Wrestler]

We are selling taxable assets, and moving them in 800,000 yen tranches to the New Nisa Growth, over 1 month, just in case we get caught in a market swing.

After a home purchase, and straddling reforms and current rental accommodations across a 1 year span, we will have less disposable income.

88,000 IDeco +100,000 yen NISA as a couple will be our likely contribution limit for the next decade or so.

Therefore, filling it up with taxable assets makes more sense.

Our Goals will be for our NISAs to be full by 2030. *
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*(If the government decides to double iDeco limits, as the chatter suggests, we may change our focus. But due to retirement allowances for my wife, the Min/max data might take some number crunching. Currently I only pay base nenkin, so going fullbore on iDeco is the most logical step at present).