RetireJapan

Hi guys, I have a question about the NISA rollover process...Would appreciate your help!

I started my NISA in 2016 so this is the first year I need to decide whether to rollover. In 2016 I only contributed 463,470 to the NISA. That has risen to 668,751. Because that year is not maxed out, I assume it makes sense to do nothing and let it automatically come out of the NISA into the tax paying account. This will give me an extra NISA year to max out fully (I think!?).

The funds in the 2016 NISA are the 1550, 1348, and 1681 etfs that I replaced with the Emaxis Slim All Country because the ER was lower...

Have I got this right or am I missing something?!

Rolling over into a new NISA only uses the amount the investments are worth, unless they are worth more than 1.2m in which case you can roll them all over.

So it won't make much difference whether you roll your 2016 contents over or not, as they will only take up about half your 2021 allowance...

Another thing you could do is sell the ETFs for the tax-free capital gains, then use it to buy taxable investments now, or invest that money into your preferred fund in January using next year's NISA allowance.

There is a risk that the markets move against you while you're out of the market, though. A sudden drop is more likely than a sudden rise, so it should be OK, but worth keeping in mind.

I also had 1348 from 2016 and sold it last month. I already used the proceeds to buy eMaxis Slim in a taxable account though, so I'm not out of the market, and will just start putting new money into the NISA from January. I also had VT, but I decided not to sell that and let it expire into the taxable account.

If you don't sell them, then I think your plan to let them expire from the NISA is good. Better to have the cheaper funds in the NISA to maximise the tax-free gains.

In past years, my roll-over amount was less than the 1.2 million as well. I also was buying ETFs back then, such as 1680, 1681. Each year at NISA roll-over time, I have been selling these ETFs off in late December and buying back equivalent but cheaper toshin funds in early January. Also over time as I accumulated more assets, I started taking bond exposures out of NISA and putting them into taxable accounts, so as to leave more NISA allocation for stocks.

This year for the first time, I'm in a different situation - my 2016 NISA investments are worth about 1.5 million, and I think my stock exposure alone are worth more than 1.2 million. Because I can keep the entire 1.5 million invested tax-free as-is if I roll it over, that is what I'm planning to do. It would be nice to switch the ETFs over into cheaper toshin funds, but not if it means forfeiting the 300,000 extra tax-free investment in order to do so.

When it comes to the Tsumitate NISA, are the rules the same?

After 20 years can I roll over 40万＋capital gain/dividends？And keep doing that yearly?

Kanto wrote: ↑Mon Oct 12, 2020 6:28 am When it comes to the Tsumitate NISA, are the rules the same?

After 20 years can I roll over 40万＋capital gain/dividends？And keep doing that yearly?

That would make it more attractive, eh? I am putting together a blog post on my revised thinking on NISA/tsumitate NISA. I now see tsumitate NISA as a kind of bond ladder for retirement income, in that you can use it to 'send' your future self around 1-1.5m a year in tax-free income.

Great advice, thanks! I have one more question about this specific to SBI....I will probably sell the funds before they come out of my 2016 NISA, but how do I choose to sell only the funds held in the 2016 NISA? I can't seem to find that option anywhere?

TokyoTower wrote: ↑Mon Oct 12, 2020 7:11 am Great advice, thanks! I have one more question about this specific to SBI....I will probably sell the funds before they come out of my 2016 NISA, but how do I choose to sell only the funds held in the 2016 NISA? I can't seem to find that option anywhere?

I don't have NISA in SBI, but on Rakuten it is just a question of selecting 2016 NISA, then selling from there. Anyone use SBI?

Kanto wrote: ↑Mon Oct 12, 2020 6:28 am After 20 years can I roll over 40万＋capital gain/dividends？And keep doing that yearly?

As far as I understand, Tsumitate doesn't currently have any rollover mechanism. So after 20 years, it's done. But they could change that when the first batch is coming up for expiry.

TokyoTower wrote: ↑Mon Oct 12, 2020 7:11 am Great advice, thanks! I have one more question about this specific to SBI....I will probably sell the funds before they come out of my 2016 NISA, but how do I choose to sell only the funds held in the 2016 NISA? I can't seem to find that option anywhere?

I had this before: viewtopic.php?f=4&t=675&p=5564#p5562

Stocks are first-in-first-out. So if you click sell and choose NISA, the oldest ones will be sold first.

I see. That makes sense. Thanks for the help!