US Citizen, no US residence. Am I out of luck?

[griffitp12]

Hi all

I am 36, starting (too late!) to think about retirement. I've been reading a bunch of JK Simmons and getting excited about how easy it seems - I can put away a man or so per month - but it seems like buying Vanguard shares is pretty difficult for my situation? I've lived over here for 10 years and have a family, and we've got some NISAs in my wife's name but I don't really know how to transfer anything I'm learning esp. about Vanguard to the Japanese options we have available, so I would really like to just...go the Vanguard route.

I guess I need to post my stats?

Age: 36
Married: Yep
Kids: Two
Both awesome?: Yep
Salary (seishain): 350,000 -> ~275,000 after insurance, tax, pension, etc.
Monthly household expenses: 160,000 (rent, utilities, food, diapers, gas, mobile)
Established monthly savings: 80,000 (into various buckets, non-negotiable)

Thanks very much in advance for your time!

[Kanto]

Hi all

I am 36, starting (too late!) to think about retirement. I've been reading a bunch of JK Simmons and getting excited about how easy it seems - I can put away a man or so per month - but it seems like buying Vanguard shares is pretty difficult for my situation? I've lived over here for 10 years and have a family, and we've got some NISAs in my wife's name but I don't really know how to transfer anything I'm learning esp. about Vanguard to the Japanese options we have available, so I would really like to just...go the Vanguard route.

I guess I need to post my stats?

Age: 36
Married: Yep
Kids: Two
Both awesome?: Yep
Salary (seishain): 350,000 -> ~275,000 after insurance, tax, pension, etc.
Monthly household expenses: 160,000 (rent, utilities, food, diapers, gas, mobile)
Established monthly savings: 80,000 (into various buckets, non-negotiable)

Thanks very much in advance for your time!

https://www.retirejapan.com/us-citizens ... d-holders/

US citizens and green card holders

US laws and IRS policy make it complicated for US citizens to maintain accounts and invest in other countries. Many banks and institutions now refuse to take on US clients due to the cost and risk of FATCA and similar legislation.
At time of writing, US citizens and green card holders cannot open accounts with Robo-Advisors in Japan.

They should avoid investing in foreign-domiciled mutual or index funds. Older US citizens may want to look at iDeCo as a way of reducing Japanese income tax by saving in cash, but for younger people this is unlikely to be a good strategy.

NISA accounts are a flexible way of reducing Japanese taxes on capital gains and dividends, but they would not be tax-exempt in the eyes of the IRS, and most brokers in Japan only allow US citizens to trade Japanese individual stocks.

There are two options that may simplify things for US citizens:

1. Interactive Brokers is an online broker service that is willing to deal with US citizens living outside the US. As they are an American company, reporting and tax compliance is greatly simplified.

2. American Citizens Abroad has a range of services and advice

.

[RetireJapan]

I am 36, starting (too late!) to think about retirement. I've been reading a bunch of JK Simmons and getting excited about how easy it seems - I can put away a man or so per month - but it seems like buying Vanguard shares is pretty difficult for my situation? I've lived over here for 10 years and have a family, and we've got some NISAs in my wife's name but I don't really know how to transfer anything I'm learning esp. about Vanguard to the Japanese options we have available, so I would really like to just...go the Vanguard route.

I guess I need to post my stats?

Age: 36
Married: Yep
Kids: Two
Both awesome?: Yep
Salary (seishain): 350,000 -> ~275,000 after insurance, tax, pension, etc.
Monthly household expenses: 160,000 (rent, utilities, food, diapers, gas, mobile)
Established monthly savings: 80,000 (into various buckets, non-negotiable)

Thanks very much in advance for your time!

Never too late. Mid-30s gives you plenty of time to get things in order and prepare for a comfortable life.
In Japan, mutual funds are a very good deal, check out this range and just swap the relevant category in to replace a Vanguard product: https://emaxis.jp/lp/slim/mattoco/
You can open an account with Interactive Brokers (and possibly other US brokers) as an expat. I don't think Vanguard takes new accounts from non-US residents though.

[griffitp12]

Hi hi

I had an Interactive Brokers account for a hot second, but balked at the fees:

>>New and casual investors should be aware of the miscellaneous fees and minimums charged by Interactive Brokers. Put simply, maintain a $100,000 >>balance or spend at least $30 in commissions each month, and you will be in the clear; otherwise, charges for inactivity can reach up to $20 per month.

Since I would only be putting in just under 100 bucks per month, once per month, my fees would be untenable, no?

[RetireJapan]

I had an Interactive Brokers account for a hot second, but balked at the fees:

>>New and casual investors should be aware of the miscellaneous fees and minimums charged by Interactive Brokers. Put simply, maintain a $100,000 >>balance or spend at least $30 in commissions each month, and you will be in the clear; otherwise, charges for inactivity can reach up to $20 per month.

Since I would only be putting in just under 100 bucks per month, once per month, my fees would be untenable, no?

I think the minimum to open an account is 10,000 USD as well, so might not fit your needs. The main issue is you being a US citizen and thus subject to US tax laws. Anyone else could just open a tsumitate NISA account and pay in from 100 yen a month.

There may be other US brokers who might let you open an account from Japan. Anyone have info?

[Kanto]

Op, have you looked through this resource?

https://www.bogleheads.org/wiki/Investi ... _residents

https://www.bogleheads.org/wiki/Investing_from_Japan

It seems to spell things out pretty well.

[griffitp12]

OK yep, seems like I need to open an account with Nomura, SMBC Nikko, or Daiwa

>>> Nomura, SMBC Nikko and Daiwa allow US persons to open accounts, and also to trade in US-based ETFs.

and see if they're still trading SPY

>>> UPDATE: As of January 22, 2018, the only US-domiciled ETF still trading on the Tokyo Stock Exchange is SPY (1557). The iShares ETFs have all been delisted.

Anyone have experience with this? Any pitfalls I should be aware of?

[Kanto]

OK yep, seems like I need to open an account with Nomura, SMBC Nikko, or Daiwa

>>> Nomura, SMBC Nikko and Daiwa allow US persons to open accounts, and also to trade in US-based ETFs.

and see if they're still trading SPY

>>> UPDATE: As of January 22, 2018, the only US-domiciled ETF still trading on the Tokyo Stock Exchange is SPY (1557). The iShares ETFs have all been delisted.

Anyone have experience with this? Any pitfalls I should be aware of?

Step 1 - Make sure you have 3-6 months of living expenses. This is your rainy-day fund, do not invest it.

Step 2 - Since you have young kids, do you have a life insurance policy?

Step 3 - If your wife is Japanese, make sure you look into setting her up with an iDeco or NISA account, depending on your future goals.

Step 4 - I would consider setting up a Japanese brokerage account, investing in Bluechips and SPY. Once my holdings reached $10,000 I would move to International Brokers.


Step 5 - If your kids are Japanese, look into setting up a Junior-Nisa to save for college. These accounts will not be available after 2024.

[griffitp12]

OK yep, seems like I need to open an account with Nomura, SMBC Nikko, or Daiwa

>>> Nomura, SMBC Nikko and Daiwa allow US persons to open accounts, and also to trade in US-based ETFs.

and see if they're still trading SPY

>>> UPDATE: As of January 22, 2018, the only US-domiciled ETF still trading on the Tokyo Stock Exchange is SPY (1557). The iShares ETFs have all been delisted.

Anyone have experience with this? Any pitfalls I should be aware of?

Step 1 - Make sure you have 3-6 months of living expenses. This is your rainy-day fund, do not invest it.

Step 2 - Since you have young kids, do you have a life insurance policy?

Step 3 - If your wife is Japanese, make sure you look into setting her up with an iDeco or NISA account, depending on your future goals.

Step 4 - I would consider setting up a Japanese brokerage account, investing in Bluechips and SPY. Once my holdings reached $10,000 I would move to International Brokers.


Step 5 - If your kids are Japanese, look into setting up a Junior-Nisa to save for college. These accounts will not be available after 2024.

Steps 1-3 and 5 are all set. I'm really just thinking about how to apply what I'm learning about Vanguard Index Funds to my situation. But maybe for my specific situation, that's not the way to go, eh? Instead I need to look at setting up a Japanese brokerage account. My holdings won't reach 10,000 for many years at a 1 man/month rate.

[Kanto]

OK yep, seems like I need to open an account with Nomura, SMBC Nikko, or Daiwa

>>> Nomura, SMBC Nikko and Daiwa allow US persons to open accounts, and also to trade in US-based ETFs.

and see if they're still trading SPY

>>> UPDATE: As of January 22, 2018, the only US-domiciled ETF still trading on the Tokyo Stock Exchange is SPY (1557). The iShares ETFs have all been delisted.

Anyone have experience with this? Any pitfalls I should be aware of?

Step 1 - Make sure you have 3-6 months of living expenses. This is your rainy-day fund, do not invest it.

Step 2 - Since you have young kids, do you have a life insurance policy?

Step 3 - If your wife is Japanese, make sure you look into setting her up with an iDeco or NISA account, depending on your future goals.

Step 4 - I would consider setting up a Japanese brokerage account, investing in Bluechips and SPY. Once my holdings reached $10,000 I would move to International Brokers.


Step 5 - If your kids are Japanese, look into setting up a Junior-Nisa to save for college. These accounts will not be available after 2024.

Steps 1-3 and 5 are all set. I'm really just thinking about how to apply what I'm learning about Vanguard Index Funds to my situation. But maybe for my specific situation, that's not the way to go, eh? Instead I need to look at setting up a Japanese brokerage account. My holdings won't reach 10,000 for many years at a 1 man/month rate.

Well, SPY is basically VOO. That is the classic Boglehead Vanguard investment vehicle. (Nowadays VTI and VT are more popular.)

With some budgeting, expense cutting and side-income you can reach your target in no time!