RetireJapan

Butterball wrote: ↑Tue Jan 25, 2022 1:58 am

Jemineye wrote: ↑Mon Jan 24, 2022 2:24 pm Perhaps I have missed the thread but would anyone be able to point me in the direction of the thread or post with general information about the NISA in English. Me and my partner are complete newbies but while he can access the information quite readily in Japanese, I want to be able to fully understand what I’m getting into.

A good start is the link on the sidebar of the main RetireJapan page: https://www.retirejapan.com/nisa/
and the retirewiki.jp page: https://retirewiki.jp/wiki/NISA (check the tsumitate NISA page too if that's what you're interested in)

Dee.Geo wrote: ↑Tue May 17, 2022 3:14 am Thanks to RetireJapan site, guidebook and forum I am close to opening the NISA account. RJ guide makes it clear that one of the disadvantages of NISA is the way the valuation of capital is done after 5 years. It's the actual value of that day even if your capital depreciated. So my questions are:

(Using the RJ guide example of 500k going down to 300k after 5 years)
1. How would one deal with it? anyone got to do something like that yet?
2. Is rollover a solution for this? Can the 300k go into the next year's NISA? Probably not, because that NISA is restricted to be 1.2m! Or is it a different number? (I might have read Ben mentioning a higher valued rollover Sorry if I have misread. If possible what's the limit then?)

It's understandable that if your capital depreciated that badly then paying the 20% gain tax is not your No.1 problem. And at that stage you would wait till it gets back to 550k in case you wanna free up the money. Still, I feel this limitation deserves a clarification before I venture in.

Haystack wrote: ↑Tue May 17, 2022 5:14 am

Dee.Geo wrote: ↑Tue May 17, 2022 3:14 am Thanks to RetireJapan site, guidebook and forum I am close to opening the NISA account. RJ guide makes it clear that one of the disadvantages of NISA is the way the valuation of capital is done after 5 years. It's the actual value of that day even if your capital depreciated. So my questions are:

(Using the RJ guide example of 500k going down to 300k after 5 years)
1. How would one deal with it? anyone got to do something like that yet?
2. Is rollover a solution for this? Can the 300k go into the next year's NISA? Probably not, because that NISA is restricted to be 1.2m! Or is it a different number? (I might have read Ben mentioning a higher valued rollover Sorry if I have misread. If possible what's the limit then?)

It's understandable that if your capital depreciated that badly then paying the 20% gain tax is not your No.1 problem. And at that stage you would wait till it gets back to 550k in case you wanna free up the money. Still, I feel this limitation deserves a clarification before I venture in.

I deal with it by ignoring the Regular Nisa, and embracing the Tsumutate Nisa.

Tsumitate NIsa + Taxable account will match a Nisas gains very closely.* It also avoid the issue of being stuck in long-term bear market. **

A low-cost accumulating index fund (ala-Emaxis Slim All Country) will outperform 95%+ of active investors and stock pickers.

...................

*Those who contribute 1.2 million on Jan.1st in a lumpsum are at an advantage.
**Assuming no bear market lasts 20 years!

Haystack wrote: ↑Tue May 17, 2022 5:14 am Tsumitate NIsa + Taxable account will match a Nisas gains very closely.* It also avoid the issue of being stuck in long-term bear market. **

...................

*Those who contribute 1.2 million on Jan.1st in a lumpsum are at an advantage.
**Assuming no bear market lasts 20 years!

RetireJapan wrote: ↑Tue May 17, 2022 5:50 am Currently rewriting the NISA guide, and this is now my standard advice. Just use Tsumitate NISA and invest extra money in taxable account

TBS wrote: ↑Tue May 17, 2022 6:22 am This is true, but it is worth highlighting that the calculation relies on people staying the full 20 year course. Japan has a high attrition rate for foreigners, especially on the 5 to 10 year time frame. So anyone who is not absolutely set on Japan for the long term, normal NISA may remain a smart choice.

RetireJapan wrote: ↑Tue May 17, 2022 6:47 am A great point, although...

while RetireJapan is definitely for everyone, my impression is that most of our readers (and the majority of people I interact with) are very much in the 'lifer' camp

TBS wrote: ↑Tue May 17, 2022 6:59 am

RetireJapan wrote: ↑Tue May 17, 2022 6:47 am A great point, although...

while RetireJapan is definitely for everyone, my impression is that most of our readers (and the majority of people I interact with) are very much in the 'lifer' camp

If only if they had based NISA on a simpler system, without ifs, buts and uncertain choices, like the UK's ISA perhaps?

Haystack wrote: ↑Tue May 17, 2022 7:16 am
But I guess it is also Retired Japan and Investing Japan