RetireJapan

I entered into the working world 5-6 years ago and have managed to save up about 3 million yen. When NISA first came out I was somewhat interested but my naive younger self kept saying "Stocks?? Do you want to gamble your savings??"

Sometime this year, maybe after getting married I started to think about getting my life more organized financially and thought my 3mil has been doing nothing when it could be growing and decided to open a NISA account. During the (over a month now) application period I started to research a ton about investing, even reading a couple of Japanese books that were listed on the Retire Japan blog.

I have pretty much decided to go with:
40% US Stocks (Heavily considering VTI)
25% Domestic Japan Stocks (probably eMaxis Slim Topix or Nikkei - or both?)
15% World Stocks (probably eMaxis Slim nonJapan Worldwide, yes it has some US stocks so I will balance it with the VTI)
20% Undecided/Emerging Stocks (Not sure yet)


I have two trains of thought that I would like an opinion on.

My situation.

• Changing jobs in the next 2 years.
• Saving 1.2mil a year may be difficult. (At my current job 600-700k is likely)
• Plan to get into iDeCo asap when I start my new job.
• Early 30s, married without children (for now)
• Possibly taking out a home loan in <5 years.

My options.
1. 1.2mil NISA forever (most years will not be 1.2mil)
2. 1.2mil NISA for 2 years (2.4mil) then Tsumitate Nisa, When the 2 1.2mil NISA's are about to expire I switch back to 1.2mil Nisa and roll them over.
3. Only Tsumitate Nisa (I can do the 400k a year easily) and put some investments in a 特定口座

Some basis for my options ( https://hass104.blog/simulation_of_nisa ... tate_nisa/ )


I feel like #2 seems like the best path for me, get as much of my stagnant funds invested then do monthly contributions. But is it really?

I think one advantage of #1 is that any dividends I may earn from previous NISA's can be re-invested in the current year in addition to my regular contributions. Also roll-over seems like it doesn't have a limit so I can roll-over say a 1.3mil account without any problem. However, that will mean I will have a year of not being able to do any investing in my NISA account.

I could however do something like this:
Year 1 1,200,000->(1,400,000 in 5 years)
Year 2 1,200,000
Year 3 600,000
Year 4 600,000
Year 5 600,000 (+600,000 from sold Year 1)

I could sell some of my "maxed" years (Year 1/2) to max out my Year 3-5 then I would be able to start contributing again after the roll-over to Year 6.

Year 6 800,000
etc.

Other: I am getting my wife to sign up for Tsumitate and she probably can do the 33k a month payment.


Do I have any of my information wrong?

Welcome! Great to have you on the forum.

I'm sure others will chip in but two minor points for now:

1. not sure I understood you right, but rolling over a NISA account only allows you to move up to the limit into the new account, right? So if the expiring year is worth 1.4 million you could only move 1.2 million and the excess would have to go into a taxable account or be sold...
2. regular NISA is due to expire in 2023. Unless they extend or replace it the system will end then: https://www.fsa.go.jp/policy/nisa2/abou ... index.html

1. not sure I understood you right, but rolling over a NISA account only allows you to move up to the limit into the new account, right? So if the expiring year is worth 1.4 million you could only move 1.2 million and the excess would have to go into a taxable account or be sold...

Here is what I read. Search for NISAのロールオーバー　上限撤廃

これまでは、5年後に保有している金融商品の時価が120万円を超えた場合、120万円分しかロールオーバーができず、超過分は通常の口座（特定口座）に移すか、売却する必要がありました。例えば1年目に非課税投資枠で100万円を投資し、5年後に時価総額で300万円となった場合、翌年にロールオーバーできるのは非課税投資枠の上限の120万円分だけで、残り180万円は特定口座に移すか売却することになります。

　18年から始まる新制度では、従来あったロールオーバーの上限がなくなります。5年間の非課税期間終了時に、非課税投資枠で投資していたすべての資産をロールオーバーできます。先ほどの例では300万円全額を、実質的に5年間延長して非課税投資枠を使えます。

Source: https://style.nikkei.com/article/DGXMZO ... 0120166599

Editing in a quick translation:
Previously if you earned say 3mil on a 1.2mil investment in 5 years you would have to sell 1.8mil and only be able to roll-over the 1.2mil amount. Starting in 2018 this 1.2mil limit for roll-over has been removed and you may now roll-over the complete amount, in this case, 3mil, essentially a 5-year extension.

Now that is extremely interesting (and beneficial). I completely missed that. Thanks for filling me in! Changes a lot about NISA.

Now we just need them to extend the validity...

It seems a bit academic to be trying to decide now which Nisa to go with in 3 years time. I would do this:

1. Decide how much of your 3M to keep in cash as an emergency fund. I'm guessing it could be a good chunk, especially if you have more liabilities on the horizon (think: losing your job during a stock market crash with a pregnant wife and a mortgage. How long do you want to survive without selling your depleted investments?)
2. See how much is left and use that to decide which NISA to go for and put in the NISA.
3. If you went for the full 1.2M, put anything left, if any, in a tokutei account.
4. Next NISA year, use your tokutei balance + planned new savings to decide the type of NISA for that year.

40% US Stocks (Heavily considering VTI)
25% Domestic Japan Stocks (probably eMaxis Slim Topix or Nikkei - or both?)
15% World Stocks (probably eMaxis Slim nonJapan Worldwide, yes it has some US stocks so I will balance it with the VTI)
20% Undecided/Emerging Stocks (Not sure yet)

This isn't far off from a simple global fund, except it's got more Japan/Emerging weight. If you want some home bias, you could maybe simplify to two funds: Global Ex-Japan, and Japan, which will be less of a headache to rebalance down the line.

Thank you for your reply.

Yea I have pretty much decided on saving 1mil of my 3 for an emergency fund. My wife also has about 1.5mil saved and currently, her full salary goes into savings while mine is used for living expenses.

Putting the extra in a tokutei account is a good idea actually, getting the extra amount working then moving it in about 6 months to next years NISA.

As for asset allocation, I am still on the fence for a few things so I might just keep researching.