RetireJapan

buckbunny wrote: ↑Tue Mar 08, 2022 5:10 am I like the idea of using margin loans instead of selling stocks, after retirement (much lower taxation, and no need to sell things at a bad time).

What brokers support them, in Japan?

Certainly it is possible, but you would need to shop around for rates.

However, it introduces a lot of unnecessary risk and considerable cost. What portion of your retirement income would be supported by stock sales? (Vs. Pension / fixed income / cash?).

Margin loans are callable and fluctuate with the market making them more expensive in volatile times. You rates will also depend on your principle holdings.

Also do to currency risk I believe the broker may favor Japanese equities/etfs over foreign ones.

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I'm currently holding cash because I expect a big recession to hit this year.

I caution against this approach.
Source: https://www.blackrock.com/us/individual ... -va-us.pdf

What portion of your retirement income would be supported by stock sales? (Vs. Pension / fixed income / cash?).

Most of it. I'm planning around a 4% permanent withdrawal rate, at the moment. I would use margin loans as an hedge to price volatility, i.e. avoid repayments when my stocks are in a low phase. Of course, this assumes no long bear market, but it can be enough to offset a short crash like 2008 or 2020. I can also make repayments whenever I have irregular income. The point is to be able to give myself a regular "salary" while minimizing long-term losses.

Margin loans are callable and fluctuate with the market making them more expensive in volatile times. You rates will also depend on your principle holdings.

Indeed. This strategy can only work if you limit yourself to a safe portion of your margin limit, so that you don't risk a call if stocks suddenly lose 70% of their value.