RetireJapan

Butterball wrote: ↑Sun Jun 27, 2021 2:49 am No guarantees, but I think it's likely that current NISA accounts will end up giving more than 5 or even 10 years tax shelter. Somebody let me know if this is just wishful thinking!

Butterball wrote: ↑Sun Jun 27, 2021 2:49 am

zeroshiki wrote: ↑Sat Jun 26, 2021 1:28 pm
NISA: 1.2M invested, 5 years tax free, next 15 years with tax, compunded 5% annually = ¥2,847,524.66
T-NISA 1.2M invested broken up as 400k T-NISA and 800k normal account, full 20 years = ¥1,061,319.08 tax free + ¥1,324,526.72 (after tax) = ¥2,385,845.80

In this case, just regular NISA wins because of the compounding interest on the large initial amount. This doesn't even take into consideration the extra 5 years you get from rolling over regular NISA which would make it win even more in this comparison.

You mention the rollover, but it might be more powerful than just an extra 5 years. Ben or someone who knows better might correct me here, but I don't think there has been any indication that rollovers will be limited to once time only (extra five years). I think the general expectation is that NISA accounts will probably be allowed to be rolled over until further notice, or until regular NISA is discontinued, in which case regular NISA will likely be allowed to be rolled over into T-NISA. No guarantees, but I think it's likely that current NISA accounts will end up giving more than 5 or even 10 years tax shelter. Somebody let me know if this is just wishful thinking!

Butterball wrote: ↑Sun Jun 27, 2021 2:49 am

zeroshiki wrote: ↑Sat Jun 26, 2021 1:28 pm
NISA: 1.2M invested, 5 years tax free, next 15 years with tax, compunded 5% annually = ¥2,847,524.66
T-NISA 1.2M invested broken up as 400k T-NISA and 800k normal account, full 20 years = ¥1,061,319.08 tax free + ¥1,324,526.72 (after tax) = ¥2,385,845.80

In this case, just regular NISA wins because of the compounding interest on the large initial amount. This doesn't even take into consideration the extra 5 years you get from rolling over regular NISA which would make it win even more in this comparison.

You mention the rollover, but it might be more powerful than just an extra 5 years. Ben or someone who knows better might correct me here, but I don't think there has been any indication that rollovers will be limited to once time only (extra five years). I think the general expectation is that NISA accounts will probably be allowed to be rolled over until further notice, or until regular NISA is discontinued, in which case regular NISA will likely be allowed to be rolled over into T-NISA. No guarantees, but I think it's likely that current NISA accounts will end up giving more than 5 or even 10 years tax shelter. Somebody let me know if this is just wishful thinking!

adamu

tokyolights wrote: ↑

Mon Apr 12, 2021 3:19 pm
Also, another question. What happens in 2031? I assume I am not allowed to roll over assets that have already been rolled over before, so I am forced to move them into a taxable account at that point. Is this correct?

No. As far as I understand, there is no rule that prevents re-rolling over. You can roll it over again. What rolling over does is prevents you investing new money the following year by up to the amount you rolled over.

Although by 2025 we will have the New NISA system which is even more complex, with tier 1 and tier 2... but you will still be able to roll over.

RetireJapan

If you have an expiring ordinary NISA account you can also choose to roll some or all of the investments over into your new ordinary NISA account.

What you have done or not done in the past has no bearing on your NISA account in the current year.

...

I get the feeling that we will be allowed to roll over the fund portion (only) of the new ordinary NISA into tsumitate when the time comes.

...

Rollevers now can go over the annual limit (this year I rolled over 2.5m into my ordinary NISA) but the new ordinary NISA only has a 200k fund limit, so we'll see if anyone can get that over 400k in five years

• I don't know how rollovers from the old NISA will work with the new NISA's 2-level structure, but it sounds to me from Ben's blog post at https://www.retirejapan.com/blog/nisa-changes/ like the 200k tsumitate-portion can be filled with rolled-over funds, assuming they qualify of course

Butterball wrote: ↑Sun Jun 27, 2021 6:33 am I guess infinite regular NISA rollovers isn't exactly what I meant, but rather regular NISA rollovers until the end of that program, and then regular -> tsumitate (fund portion) rollovers. I certainly agree that it's best to assume the worst, but I feel like the conventional understanding of the NISA programs is that there's no "one rollover only" rule because funds that have been rolled over into year X are considered identical to funds that were newly purchased in year X:

viewtopic.php?f=4&t=1333&p=13390&hilit=roll#p13375

adamu

tokyolights wrote: ↑

No. As far as I understand, there is no rule that prevents re-rolling over. You can roll it over again. What rolling over does is prevents you investing new money the following year by up to the amount you rolled over.

Although by 2025 we will have the New NISA system which is even more complex, with tier 1 and tier 2... but you will still be able to roll over.

and:
viewtopic.php?f=4&t=1614&start=10&hilit=roll#p14713

RetireJapan

If you have an expiring ordinary NISA account you can also choose to roll some or all of the investments over into your new ordinary NISA account.

What you have done or not done in the past has no bearing on your NISA account in the current year.

...

I get the feeling that we will be allowed to roll over the fund portion (only) of the new ordinary NISA into tsumitate when the time comes.

...

Rollevers now can go over the annual limit (this year I rolled over 2.5m into my ordinary NISA) but the new ordinary NISA only has a 200k fund limit, so we'll see if anyone can get that over 400k in five years

Hope I didn't misrepresent anyone's thoughts there.

So my understanding is that it's expected to play out like this:

2019-2023: expiring regular NISA years can be rolled over into current year,
2024-2028: expiring regular NISA (old system) can be rolled over into current year's regular NISA (new system)

• I don't know how rollovers from the old NISA will work with the new NISA's 2-level structure, but it sounds to me from Ben's blog post at https://www.retirejapan.com/blog/nisa-changes/ like the 200k tsumitate-portion can be filled with rolled-over funds, assuming they qualify of course

2029-2033: expiring regular NISA (new system) tsumitate-fund portion can be rolled into current-year tsumitate NISA; remainder of regular NISA gets kicked out into taxable account.
2034~: no remaining regular NISA years to roll over; start contributing new funds to current year T-NISA like a regular Joe