Junior NISA, NISA, iDeco plan

[cocacola]

Hello,

Long-time reader, first-time poster.

Been in Japan for a while, but only just am starting my investment plan.

During the course of my readings on the retirejapan website, as well as this forum, I've created a plan for myself, the wife, and two little ones.

We have created the kids' Junior NISA accounts, wife has a NISA-ready account, as do I (but mine is at a different bank that does not have the Emaxis Slim World fund available). Kids and wife accounts are at MUFJ, mine is at Mitsui Sumitomo Trust Bank.

Wife and I are in our 40's, kids are not yet teens.

We have some cash reserves from a recent inheritance, looking to put some of that money into long-term investments. We already have a decent amount of emergency savings, so I am considering the inheritance as long-term investment dry powder.

Could I ask your opinions on the plan?

Kids
Junior NISA1
Junior NISA2
100% Emaxis Slim All-World fund
Max-out this year, as well as next year. Next year will apparently be the final year for Junior NISA. Trying to take as much advantage as possible.

Wife
Regular NISA (5-year term)
100% Emaxis Slim All-World fund
Max-out this year, and subsequent years. I believe that after the 5-year term, those funds in the regular NISA will convert to a taxable investment. What would be your recommendation on how to utilize these funds? If we are thinking 20-year investment period, should we just do Tsumitate NISA?

Me
Regular NISA (5-year term)
World Five Income Fund
My NISA is at Sumitomo Mitsui Trust Bank, which does not have the Emaxis Slim World fund... I think the one linked is pretty close to the Emaxis one, but I'm not super experienced at reading charts or info sheets... would this be a viable option? Or should I "diversify" and invest in, say, S&P500? Same question with me, as my wife: if 20-year period for investment, should Tsumitate, instead?

Wife and I (TBD)
Start iDeco accounts and max-out monthly contributions for as long as we can.

Things happening around the world, as well as Japan, are so volatile right now, it's a bit hard for me to think of a solid plan, or to commit to it... of course, nobody can tell the future, but I'd like to hear how others in Japan are feeling about the near/mid/far future. I'm also considering metals, and bitcoin, but of course, not committed to anything in particular.

Thanks for any advice!!

[TokyoBoglehead]

Hello,

Long-time reader, first-time poster.

Been in Japan for a while, but only just am starting my investment plan.

During the course of my readings on the retirejapan website, as well as this forum, I've created a plan for myself, the wife, and two little ones.

We have created the kids' Junior NISA accounts, wife has a NISA-ready account, as do I (but mine is at a different bank that does not have the Emaxis Slim World fund available). Kids and wife accounts are at MUFJ, mine is at Mitsui Sumitomo Trust Bank.

Wife and I are in our 40's, kids are not yet teens.

We have some cash reserves from a recent inheritance, looking to put some of that money into long-term investments. We already have a decent amount of emergency savings, so I am considering the inheritance as long-term investment dry powder.

Could I ask your opinions on the plan?

Kids
Junior NISA1
Junior NISA2
100% Emaxis Slim All-World fund
Max-out this year, as well as next year. Next year will apparently be the final year for Junior NISA. Trying to take as much advantage as possible.

Wife
Regular NISA (5-year term)
100% Emaxis Slim All-World fund
Max-out this year, and subsequent years. I believe that after the 5-year term, those funds in the regular NISA will convert to a taxable investment. What would be your recommendation on how to utilize these funds? If we are thinking 20-year investment period, should we just do Tsumitate NISA?

Me
Regular NISA (5-year term)
World Five Income Fund
My NISA is at Sumitomo Mitsui Trust Bank, which does not have the Emaxis Slim World fund... I think the one linked is pretty close to the Emaxis one, but I'm not super experienced at reading charts or info sheets... would this be a viable option? Or should I "diversify" and invest in, say, S&P500? Same question with me, as my wife: if 20-year period for investment, should Tsumitate, instead?

Wife and I (TBD)
Start iDeco accounts and max-out monthly contributions for as long as we can.

Things happening around the world, as well as Japan, are so volatile right now, it's a bit hard for me to think of a solid plan, or to commit to it... of course, nobody can tell the future, but I'd like to hear how others in Japan are feeling about the near/mid/far future. I'm also considering metals, and bitcoin, but of course, not committed to anything in particular.

Thanks for any advice!!

Kids - Good plan

Wife- Good, but I would say go Tsumutate.

You - Red Alert- That fund has a 2% fee- insanely high "純資産総額に対して最大年2.20%（税込）の率を乗じて得た額。なお、商品により別途運用実績に基づき計算される成功報酬額がかかる場合があります。"

I would suggest moving to a real broker (Rakuten/sbi/Monex) If not, go with something like this https://fund.smbc.co.jp/smbchp/main/ind ... 1=79313207

Again, I would say tsumutate over regular Nisa.

.....

If you already have an adequate cash reserve, statistically investing your windfall as a lump sum will perform better, vs Dollar cost averaging. Regardless, sitting on the money is seldom the right choice.

Dry power implies you feel you can time the market. I would recommend against this.

[cocacola]

TokyoBoglehead, I have read many of your posts, thank-you for taking the time to respond to mine.

Wife- Good, but I would say go Tsumutate.

Would the benefit of tsumitate be that, although the principal invested would be smaller, the tax-free time is much longer than regular NISA, so the upside is greater at the time of maturity? Sorry, n00b here. I was just thinking that, because of the inheritance, investing more of it into a tax-sheltered investment is better than keeping it as cash, especially considering the volatility of the Yen, currently... so, would you be suggesting that we keep appropriate amounts of the inheritance in Yen to facilitate the monthly tsumitate investments over a long-term? (I am not against that, just asking for some clarification)

You - Red Alert- That fund has a 2% fee- insanely high

Ah, dang, I had thought that a 2% was the average fee, but actually, it would be %0.2, yes? My mistake. Thanks very much for pointing that out.
I had started the process of opening a Monex account (received the verification letters in the mail already), but thought that, since the end-of-year is approaching, and I already have a NISA-ready account at Mitsui Sumitomo, I should just bite the bullet right now, get funds into a NISA asap, then work on moving said NISA to Monex next year. I just don't want to risk missing this year's NISA allotment. But if you suggest that tsumitate is the way to go for me, too, then maybe the loss of a couple of months isn't that big of a deal, and I should just get on with moving my NISA to Monex (which will take time, apparently... maybe 6-weeks from what I gathered) and start the tsumitate there when all is said-and-done there. What do you think?

I guess my biggest question would be to pick your brain about the benefits of tsumiate over regular NISA, especially considering that I have a lump-sum of cash ready... if we do go with tsumitate for my wife and I, there will be quite a bit of left-over cash (the dry powder). I know that time in the market beats timing the market, so I wasn't implying that I want to snipe anything... I wouldn't even know what to aim for! Any suggestions of what to do with the excess cash? Of course, something tax-sheltered would be the best option, but we are maxing-out our NISA and iDeco, so no more room there... anything else I could look into?

[TokyoBoglehead]

TokyoBoglehead, I have read many of your posts, thank-you for taking the time to respond to mine.

Wife- Good, but I would say go Tsumutate.

Would the benefit of tsumitate be that, although the principal invested would be smaller, the tax-free time is much longer than regular NISA, so the upside is greater at the time of maturity? Sorry, n00b here. I was just thinking that, because of the inheritance, investing more of it into a tax-sheltered investment is better than keeping it as cash, especially considering the volatility of the Yen, currently... so, would you be suggesting that we keep appropriate amounts of the inheritance in Yen to facilitate the monthly tsumitate investments over a long-term? (I am not against that, just asking for some clarification)

You - Red Alert- That fund has a 2% fee- insanely high

Ah, dang, I had thought that a 2% was the average fee, but actually, it would be %0.2, yes? My mistake. Thanks very much for pointing that out.
I had started the process of opening a Monex account (received the verification letters in the mail already), but thought that, since the end-of-year is approaching, and I already have a NISA-ready account at Mitsui Sumitomo, I should just bite the bullet right now, get funds into a NISA asap, then work on moving said NISA to Monex next year. I just don't want to risk missing this year's NISA allotment. But if you suggest that tsumitate is the way to go for me, too, then maybe the loss of a couple of months isn't that big of a deal, and I should just get on with moving my NISA to Monex (which will take time, apparently... maybe 6-weeks from what I gathered) and start the tsumitate there when all is said-and-done there. What do you think?

I guess my biggest question would be to pick your brain about the benefits of tsumiate over regular NISA, especially considering that I have a lump-sum of cash ready... if we do go with tsumitate for my wife and I, there will be quite a bit of left-over cash (the dry powder). I know that time in the market beats timing the market, so I wasn't implying that I want to snipe anything... I wouldn't even know what to aim for! Any suggestions of what to do with the excess cash? Of course, something tax-sheltered would be the best option, but we are maxing-out our NISA and iDeco, so no more room there... anything else I could look into?

I would suggest reading through the forum to see the arguments regarding Tsumutate vs Regular Nisa, there are quite a few good back and forths.

Is say invest it all Now in a lump sum, and setup the Tsumutate Nisas and iDecos going forward.

If you cannot stomach a lump sum, split it in half. Lump sum invest half, and DCA the other half.

[zeroshiki]

Moving NISA providers is not a walk in the park. Just find the most low cost fund that Prestia is offering (I assume this is what you mean by SMBC Trust unless you're in the other Mitsui Sumitomo Trust Bank) but try to move NEXT YEAR's NISA to Monex (don't bother trying to move this year's or, really, ever, since the effort is too much for little gain).

[adamu]

I guess my biggest question would be to pick your brain about the benefits of tsumiate over regular NISA, especially considering that I have a lump-sum of cash ready... if we do go with tsumitate for my wife and I, there will be quite a bit of left-over cash (the dry powder).

This is the sort of thing the wiki is made for. This is also the most popular article on the wiki.

https://retirewiki.jp/wiki/Comparison_o ... itate_NISA

At the moment it's just the raw facts, but of course we are always looking for improvements if people have good quality information and analysis to share.

[cocacola]

I would suggest reading through the forum to see the arguments regarding Tsumutate vs Regular Nisa, there are quite a few good back and forths.

Is say invest it all Now in a lump sum, and setup the Tsumutate Nisas and iDecos going forward.

If you cannot stomach a lump sum, split it in half. Lump sum invest half, and DCA the other half.

I tried searching for Tsumitate vs Regular NISA, but the search function isn't so good... didn't allow me to search with those keywords.

I was thinking of the lump-sum/DCA method. Will have another think about that. Might be the way to go, for my own peace of mind.

Thanks for your suggestions!

[cocacola]

Moving NISA providers is not a walk in the park. Just find the most low cost fund that Prestia is offering (I assume this is what you mean by SMBC Trust unless you're in the other Mitsui Sumitomo Trust Bank) but try to move NEXT YEAR's NISA to Monex (don't bother trying to move this year's or, really, ever, since the effort is too much for little gain).

Yeah, I read somewhere (I think on this forum) that changing NISA providers is a pain in the butt. I think I might do a Regular NISA at my current provider (Mitsui Sumitomo Trust Bank), then, when I switch providers next year, change it to Tsumitate NISA.

Thanks for the heads-up!

[cocacola]

This is the sort of thing the wiki is made for. This is also the most popular article on the wiki.

https://retirewiki.jp/wiki/Comparison_o ... itate_NISA

At the moment it's just the raw facts, but of course we are always looking for improvements if people have good quality information and analysis to share.

I checked the Wiki, but must have somehow missed this one. Thank-you for the link. I will check it out!

[Tkydon]

If you have the cash, go full NISA this year... too late to take advantage of Tsumetate-ing and Tsumetate limit is much lower.

The Limit for Regular NISA is Y1.2M. The limit for Tax Free Gift is Y1.1M per year per recipient, so suggest you do Full NISA Y1.1M per person.

Yen is still weak against USD, but promises to strengthen against USD by end of year. You only have 6 weeks to get the funds invested for this year...

Next year, max out iDECO for both, and remember the Tax Free Gift limit of Y1.1M per year per recipient... so with iDECO and T-NISA contributions you would still be well under that limit... max iDECO and complete the Y1.1M with NISA.

Start of Next Year promises to be the bottom for the start of the next Bull Market... Get ready to pull the trigger to put the money in...

J-NISA; Max it this year and next, and after that it will be included in the new arrangements, so max each year out to the max Tax Free Gift Tax Threshold of Y1.1M per recipient...


See

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