Preparing to arrange finances before move to retire in Japan...

[yamoinca]

Hello,

Looking for any advice/pitfalls/recommendations (Japan/US Tax Planners) as we plan our transition to Japan for retirement.
Current Green Card holder (Canadian Citizenship) but will apply for US Citizenship this year.
Wife is Green Card holder (Japan Citizenship, been outside of Japan for over 30 years).
Currently living in (mortgaged home) in California, plan on selling prior to move.
We jointly own a condo (our previous primary residence, currently rented out) in Canada which we will also likely sell before moving.
Have some accounts in Canada (eg for Condo expenses and RRSP).

We did a buy a home (outright) in Japan in 2023 which will be our retirement home.
Currently, brother in law has utilities in his name/account and we hired tax person local to the home to deal with taxes.

I realize that moving and becoming a Japan Tax Person will mean taking a hit on retirement funds, but I'm willing to deal with that rather than try to not become a tax person (while basing our retirement in Japan).

One thing I have gleaned is that we'll want to put/split assets under wife's name (almost everything in US is under my name) before the move.
Current timeline is earliest one year (mid 2025) at which point I'll be 62, wife will be 69 and hoping not to have to plan on any work in Japan to support ourselves.

One thing I'm not that clear on is whether 401K funds vs Roth really matters. Eg would it be worth it to extend our stay in US (post-retirement) to take time to convert 401K to Roth before moving (which seems to be a thing US Tax Persons do anyway to try to avoid/reduce RMDs) or doing that while in Japan (and no other US income) makes sense.

Anyway, appreciate any experience good or bad that people in similar situation may have had wrt how to plan/deal with their US assets before moving to Japan.

Thank you!

[RetireJapan]

Are you 100% set on becoming a US citizen? Not doing so would likely save you a lot of trouble if you are planning to live in Japan.

[Tkydon]

You really need to speak with a Professional about when would be the best time to liquidate assets and transfer funds to minimize your tax exposure.

Disbursements from a ROTH are Tax Free in the US, but not tax free in Japan, so I don't think there is any advantage to switching from 401k to ROTH.

[rwethereyet]

Hello,

Looking for any advice/pitfalls/recommendations (Japan/US Tax Planners) as we plan our transition to Japan for retirement.
Current Green Card holder (Canadian Citizenship) but will apply for US Citizenship this year.
Wife is Green Card holder (Japan Citizenship, been outside of Japan for over 30 years).
Currently living in (mortgaged home) in California, plan on selling prior to move.
We jointly own a condo (our previous primary residence, currently rented out) in Canada which we will also likely sell before moving.
Have some accounts in Canada (eg for Condo expenses and RRSP).

We did a buy a home (outright) in Japan in 2023 which will be our retirement home.
Currently, brother in law has utilities in his name/account and we hired tax person local to the home to deal with taxes.

I realize that moving and becoming a Japan Tax Person will mean taking a hit on retirement funds, but I'm willing to deal with that rather than try to not become a tax person (while basing our retirement in Japan).

One thing I have gleaned is that we'll want to put/split assets under wife's name (almost everything in US is under my name) before the move.

Have you checked implications of spitting assets before moving to Japan. I cld be wrong but J tax authorities will take that a gift to your wife and there will be a gift tax ? ( I read somewhere that this condition is not valid if you are living away from Japan for more than 10 years).

On another note - J capital gain appreciation will be based on the average Japanese yen rate when you bought the securities. Given than JPY is near the lowest , it could be a big tax drain after moving to Japan and if you make any capital gains on sell of securities. Looks like an option will be sell all securities and buy it again to reset cost basis ( or your plan to convert to Roth looks ok too).

[Deep Blue]

He states his wife has been outside of Japan for 30 years, so well outside of the clutches of Japanese gift tax. Splitting up assets is a very sensible move to minimize IHT down the line.