NISA

[Michel]

Hello everyone,

I just got my Rakuten account open and running and was thinking about starting a NISA account, but as I looked into it I see that there are two types 一般 and つみたて

My japanese reading skills being limited I could see that the amount you could invest and lenght were different.

I'm looking at buy and hold my investments so I feel like つみたて would be better for the tax advantage it offers.

Could someone give me a quick explanation between the two?

[N00bster]

This page will tell you everything you want to know about NISA:

https://www.retirejapan.com/nisa/

Note that つみたて is spelled in kanji (積立) on it.

[Michel]

Thanks! I actually read about it and made some research, however this "each year is counted separately " confuses me.

From my understanding, assuming you open a regular account next year 2020, it will be open until 2025 if I'm correct.
Now if I decide to switch to tsumitate let's say in 2022, does it mean I'll have 18 years left on my NISA account or the full 20 years? How about in 2026 can I come back to a regular if I wanted?

Therefore what would be the "best" approach assuming I could max out my account every year regardless of regular or tsumitate?

[RetireJapan]

Yeah, the NISA account rules are unnecessarily confusing. Hopefully they will sort them out soon (several proposals in the works).

Each NISA year has its own duration. For regular NISA, five years. that means this year's contributions are tax free until 2023. Next year's contributions will be tax free until 2024, etc.

The account does not have a duration, each year does. You can mix and match types. So this year regular NISA, next year tsumitate, the following year regular, etc.

[Michel]

I see, I was wrong on the duration point to begin with.

Thank you for your answer!