RetireJapan

Hello,

I'm a 19 y.o. Japanese student at an American uni. I'm getting started on managing my finances during winter break, and RetireJapan has been a tremendous resource in introducing me to different investment options in Japan.

I wanted to know if opening a US investment account while in college is a good idea—either putting money into a Roth IRA/401(k) or investing in an index fund (S&P). Although I'm not a US citizen, I have an SSN, and I can see myself working and living between Japan and the US over my lifetime. I'm not currently earning money, but I will likely get a paid research assistant position on-campus soon.

Are there any benefits to investing in the US? Or, is the hassle with taxes and other things just not worth it, and I should opt for iDeCo once I turn 20 instead? (I don't have any income streams in yen as of now, but I used to and again could through tutoring, internships, etc.)

I would appreciate any other advice you could give a college student navigating personal finance at this stage of life.

Thanks!

Sounds like an interesting experience ahead! For US retirement account contributions you need earned income to be eligible for contributions but you don’t need to be a US citizen. Some school related income can be considered “earned” (eg when you have to work as a teaching assistant) but most scholarships are not. I think if I were in your situation I would try to invest in a regular taxable account while in the US just for the experience so I could compare with Japan in the future. The worst case scenario is that you need to liquidate the account when you return to Japan. For a Roth account you can take out the original contribution at any time but there is a 5 year rule on removing anything that grew in account so it’s actually not the best choice if you are uncertain about being able to maintain the account.