My case (overseas investment, capital gains, refinancing mortgage)

[midnightrambler]

First of all, I'm a new poster and I'm grateful for the wealth of information that I have already gained from reading this forum and watching the YouTube channel.

I will explain my situation.

I'm a permanent resident and I'm married with a young daughter. We bought a new house 2 years ago.

In 2021 before my daughter was born I decided to start investing. I was no aware of NISA at the time. Maybe I was living under a rock but I don't think it was as much a part of the public consciousness in Japan as it is now after the new NISA was established.

Anyway, I went with an overseas investment plan called the EVO 25 through a "financial advisor" called Argentum Wealth. I think a few posters on here are familiar with them. After reading up on various situations that are similar to mine I realize now that I made a mistake starting this plan. While the money seems to be growing, there are high fees and it is very inflexible. I pay 750US a month into it and this has made my financial situation fairly tight since we bought a house in 2022 and I am paying the mortgage on that (more to follow). I want to withdraw the money and put it into NISA instead but there are heavy surrender charges (it is a front-loaded investment).

My options as far as I can see are:
1. Keep the investment until year 10 (I am in year 4). In year 10 I get a loyalty bonus of 7.5%. I will then close the investment, withdraw the money and put it into NISA. BUT I am worried about how I will report the capital gains - a monthly investment rather than a lump sum makes reporting a lot more complicated. Should I hire a tax accountant when the time comes? In addition, what will my bank say when I try to deposit what should more than 10 million yen at once. I COULD deposit the money in stages but am aware of the red flags associated with structuring.

2. I could surrender the investment now and take a huge hit. At the moment the investment is worth about 35K and if I surrender it will probably only get about 15K of that back. The only good point about this is that I probably wouldn't need to report it for capital gains because it is a loss, am I correct?

3. Keep the investment open, decrease my contributions to a minimum (200US a month) and then withdraw the money and put it into NISA.

Which option do you think I should go for?



About my mortgage, I got a flat35 loan which is not ideal but it is all I could get since I am part-time university lecturer. I would like to refinance to a floating rate but would I at first need to get a full-time job?

The investment (monthly contributions too high, especially with the exchange rate) and the mortgage (interest rate too high) are weighting my down financially. I would appreciate any advice from the knowledgeable posters on this forum. Thank you!

[goodandbadjapan]

I was in a similar position once with a similar financial plan. I kept it for ten (out of 15) years and got the bonus before surrendering. Although it was a bad plan, it did make a very small amount of money (better than a bank). It's a hard call but if you think the current plan will make you some money I might be inclined to keep it at least until you can break even by cashing in. If you can afford to start a NISA at the same time, I would definitely do that, but if not it's a tough call.

With regard to CGT, it is not complicated if you cash in the whole policy at once. You simply add up the total amount you put in and subtract that from the amount you get out. That's your gain and that's what tax will be levied on. It is a bit more complicated if you make a partial encashment but I wouldn't let the CGT worry alone stop you from cashing in. The bank might ask about the funds. Just tell them - you're not doing anything wrong.

Good luck.

[RetireJapan]

Anyway, I went with an overseas investment plan called the EVO 25 through a "financial advisor" called Argentum Wealth. I think a few posters on here are familiar with them. After reading up on various situations that are similar to mine I realize now that I made a mistake starting this plan. While the money seems to be growing, there are high fees and it is very inflexible. I pay 750US a month into it and this has made my financial situation fairly tight since we bought a house in 2022 and I am paying the mortgage on that (more to follow). I want to withdraw the money and put it into NISA instead but there are heavy surrender charges (it is a front-loaded investment).

My options as far as I can see are:
1. Keep the investment until year 10 (I am in year 4). In year 10 I get a loyalty bonus of 7.5%. I will then close the investment, withdraw the money and put it into NISA. BUT I am worried about how I will report the capital gains - a monthly investment rather than a lump sum makes reporting a lot more complicated. Should I hire a tax accountant when the time comes? In addition, what will my bank say when I try to deposit what should more than 10 million yen at once. I COULD deposit the money in stages but am aware of the red flags associated with structuring.

2. I could surrender the investment now and take a huge hit. At the moment the investment is worth about 35K and if I surrender it will probably only get about 15K of that back. The only good point about this is that I probably wouldn't need to report it for capital gains because it is a loss, am I correct?

3. Keep the investment open, decrease my contributions to a minimum (200US a month) and then withdraw the money and put it into NISA.

Which option do you think I should go for?

Welcome! Your situation is fairly common, and actually the reason I started RetireJapan

We have several threads on the forum about similar situations. Generally speaking you should be able to calculate your likely returns in the three scenarios.

I seem to remember most people found that even with the redemption penalties, it was better to cancel the plan entirely and invest in NISA/iDeCo/normal taxable accounts with a Japanese broker. Paying only 0.05% in fees vs 3-5% for an offshore plan, and being largely tax free makes a lot of difference over a few decades.

But there is no need to go all in. Reducing your payments to your plan until you can cash out with less of a penalty might give you more peace of mind, and you can get started with NISA in the meantime with the money you are no longer putting into EVO25.

[captainspoke]

I'm not sure what you should do--which course of action you should choose--but I'll just offer that I was a 'participant' in one of these schemes, pretty long ago now. Luckily, I blundered into the lump sum version, and not the regularly-monthly contributions option. And didn't go all in.

I checked out after ten years, and was fortunate enough to get my money back. And I hadn't committed to a monthly dollar amount. Also, when I repatriated the money to japan, I was audited, and paid taxes and penalties. That was unfortunate, but I was soooo happy to be rid of this metaphorical gum on my shoe that I didn't care. They even tried contacting me with further offers after I'd cashed out(!), but I simply said no, please don't contact me again.

It was a hit that I took, but it's been a couple decades, so I've recovered. What you're facing is a personal decision--not something that someone else can tell you what is best. You have to choose from a palette of bad choices.

These advisors get significant portion of the amount contracted paid up front when they hook someone. The product they sell has both high fees and then an encashment clause, which guarantees that the outfit sponsoring the product gets their generous cut, too.

Thankfully, the internet has been wonderful as a source of shared information and experiences with these advisorss (not for these outfits, just for the marks that they were targeting).

[midnightrambler]

Thank you to the above posters for their sound advice!

At the present time my plan is to see it through to year 10 for the loyalty bonus and then withdraw all the money. My mind has been set at ease somewhat about capital gains tax by goodandbadjapan. I guess I should keep a spreadsheet of all my monthly payments in yen. I know there are websites that give date specific data on the exchange rate of the yen to the dollar so I can backtrack it. In any case, honesty with the bank and the NTA is the best policy. What would happen if I didn't declare it?

At the present time I have made 8% on my contributions which is not too bad. I'm not sure how I would go about creating a spreadsheet where I can run simulations comparing my investment with its fees compared to NISA with its almost non-existent fees. If anyone can show me a template then I would really appreciate it.

I started NISA last month and I will put 10,000 yen per month into it for now. Hopefully more soon but once I hit year 10 of my investment portfolio with Argentum I will close it and put all my investments into NISA.

Thanks again.

[Wilbur]

At the present time I have made 8% on my contributions which is not too bad. I'm not sure how I would go about creating a spreadsheet where I can run simulations comparing my investment with its fees compared to NISA with its almost non-existent fees. If anyone can show me a template then I would really appreciate it.

https://www.getsmarteraboutmoney.ca/cal ... alculator/

Here's a fee calculator you can use to compare these two investments. It's in Canadian dollars but you can just add two zeros for yen.

[midnightrambler]

Thanks for the calculator!

I must also mention that I’m 43 years old so I’ll be 49 by the time I get the loyalty bonus on the EVO plan. That will hopefully give me about 15 more years to grow the money in NISA, all going well.

Another thing I should also say is that about 7.5% of my portfolio is invested in Bitcoin, which I cannot invest in with NISA, am I correct?

[beanhead]

6 more years of investing in this plan may cost you more in fees than you will get back in the 'bonus'. If I were you, I would be inclined to do the simulation in excel or google sheets or whatever, just to make sure you are making the decision based on accurate assumptions.
First step, compare the return you have made over the last 4 years with the same return based on NISA with eMaxis Slim All Country or a similar fund.
You may be surprised by the difference.
ChatGPT, Gemini etc make this calculation a lot easier now.

Bitcoin is currently seen by the Japanese authorities as closer to gambling than investing. No virtual currency options are available in NISA, as of March 2025.

[Wales4rugbyWC23]

I'm not sure what you should do--which course of action you should choose--but I'll just offer that I was a 'participant' in one of these schemes, pretty long ago now. Luckily, I blundered into the lump sum version, and not the regularly-monthly contributions option. And didn't go all in.

I checked out after ten years, and was fortunate enough to get my money back. And I hadn't committed to a monthly dollar amount. Also, when I repatriated the money to japan, I was audited, and paid taxes and penalties. That was unfortunate, but I was soooo happy to be rid of this metaphorical gum on my shoe that I didn't care. They even tried contacting me with further offers after I'd cashed out(!), but I simply said no, please don't contact me again.

It was a hit that I took, but it's been a couple decades, so I've recovered. What you're facing is a personal decision--not something that someone else can tell you what is best. You have to choose from a palette of bad choices.

These advisors get significant portion of the amount contracted paid up front when they hook someone. The product they sell has both high fees and then an encashment clause, which guarantees that the outfit sponsoring the product gets their generous cut, too.

Thankfully, the internet has been wonderful as a source of shared information and experiences with these advisorss (not for these outfits, just for the marks that they were targeting).

I am so glad that when I cashed in my Gerneralli one, I sent it back to the UK from Hong Kong. I thought the Japanese tax office might get suspicious if I sent it here.

[beanhead]

3. Keep the investment open, decrease my contributions to a minimum (200US a month) and then withdraw the money and put it into NISA.

This seems like a sensible option. And put whatever you can in NISA each month, whether that is 20,000yen or 30,000yen or whatever.

However, these companies make sure they get their 'admin' charges in full. So a common condition is that you pay charges on whatever amount you have originally committed to investing, even if you then reduce the amount. So you pay charges based on $750 per month even though you are now investing $200 with them. This makes the effective admin charges of your plan even higher.
Worth double checking if that is the case if you do reduce the amount you put in.

This is why RJ says that statistically, it is usually better to rip off the band-aid, take the hit and start again with the $15k that they allow you to keep. But, psychologically, a tough call to make...\