Difference iDECO and zaikeichochiku(財形貯蓄)

[crew]

We have an option to option to open a zaikeichochiku at work and I am unsure if this is the same as iDECO, an alternative, or something you can get simultaneously. Anyone familiar with it?

While I am at it does anyone know if it is possible to leave Japan, and re-start contributing to iDECO in case you return, or are you stuck with whatever you had when you left and wait til you are 60?

[tokyojoe]

Regarding your second question, my understanding is that you can't contribute further to your ideco if you leave Japan,
but you may be able to manage the existing funds. The following sentence appears in the RetireJapan guide to idecos:

What happens is that you will no longer be able to pay into the account but can still
manage and rebalance it as normal.

[RetireJapan]

Yes, you can only contribute to iDeCo if you are resident in Japan and paying into the pension system. If you leave the country you will no longer be able to contribute, but can manage the account (rebalance, change investments). If you come back, you can resume payments (assuming you are paying into nenkin again).

If you reach the age of 60 while abroad and want to cash out, the providers I have spoken to will send the money to a foreign bank account (I presume most if not all will).

However, I am not familiar with zaikeichochiku. I'll have a look tomorrow.

Anyone else?

[RetireJapan]

Okay, so I found this: http://www.mylifenavi.net/c_zaikeityotiku.html

Seems to be a kind of savings account with some limitations. Interest is tax-free up to 5.5m in capital, and there are penalties for unauthorised withdrawals (you lose the tax-free on the interest).

Doesn't seem to save you anything on income tax, and you don't seem to be able to invest in mutual funds so I would say for long-term investments iDeCo is probably more attractive. In fact, given the limited benefits and seeming limitations, I would say zaikeichochiku does not seem particularly interesting. NISA might be a better option even, or pension insurance.

[adamu]

My employer offers Zaikeichochiku every year. The main point seems to be they take the deposits directly from your salary, and you have to ask HR if you want to make a withdrawal, ensuring you save the money. It was just a cash savings account with some tax benefits on the interest. There were two kinds, a normal savings account and one where you can only withdraw to buy a property (with slightly better benefits). They didn't mention the interest though... last time I enquired over a year ago it was something like 0.04%.

Tax benefits on non-existent interest in exchange for attached strings, doesn't seem worth it. If you're disciplined enough you might as well just open your own savings account. If the interest rates were of any significance it would be an interesting scheme though.