RetireJapan

I have been using a robot advisor for the last 7 years and it has accumulated very well (+30%!) , but the fees are pretty high and so just want it to keep accumulating from here without adding more, and put my monthly investments into a tax-free NISA account.

I read up on the differences between growth and tsumitate accounts, such as the yearly limits, total limits, and the difference in the types of products you can buy. I understand the technical difference between the two, but I don't know which one is "better" or "why" from an investment towards retirement perspective?

mike2011ca wrote: ↑Wed Jan 31, 2024 2:38 am I read up on the differences between growth and tsumitate accounts, such as the yearly limits, total limits, and the difference in the types of products you can buy. I understand the technical difference between the two, but I don't know which one is "better" or "why" from an investment towards retirement perspective?

They are exactly the same for retirement purposes, and you can use both. The only difference between the tsumitate portion and the growth portion is 1) what you can buy in the account, and 2) the timing of purchases.

If you want to max out your NISA allowance you will need to use both sections.

It depends what you mean by better.

Tsumitate is just Growth with more restrictions, but you need to use Tsumitate if you want your full lifetime tax-free entitlement.

For regular investing:

1. Start by maxing out your ¥1.2M annual Tsumitate allowance.
2. If you have more to invest that year, put it in the Growth portion.

adamu wrote: ↑Wed Jan 31, 2024 3:49 am It depends what you mean by better.

Tsumitate is just Growth with more restrictions, but you need to use Tsumitate if you want your full lifetime tax-free entitlement.

For regular investing:

1. Start by maxing out your ¥1.2M annual Tsumitate allowance.
2. If you have more to invest that year, put it in the Growth portion.

Or if you expect to have ongoing income to invest through the year, dedicate the cashflow to Tsumitate and any lump sums to Growth Portion...

Tsumitate just allows you to set it and forget it...

Growth Portion, or additional Bonus injections to Tsumitate (IF you have not allocated the total Tsumitate Allowance of Y1.2M to the Automatic Payments by the end of the year), require manual processing.

So I can use either or without much difference, but the goal being to max out my yearly contributions? Ok.

I just checked Rakuten and I found the option to automatically accumulate into a specific fund. Thanks for pointing that out!

mike2011ca wrote: ↑Wed Jan 31, 2024 4:19 am So I can use either or without much difference, but the goal being to max out my yearly contributions? Ok.

I just checked Rakuten and I found the option to automatically accumulate into a specific fund. Thanks for pointing that out!

Both...

Tsumitate is just Automated for regular cashflows through the year.

Growth Inputs (or Bonus Inputs to Tsumitate if you have any extra allowance there that is not budgeted for your automated payments to the end of the year) require manual processing...

mike2011ca wrote: ↑Wed Jan 31, 2024 4:19 am So I can use either or without much difference, but the goal being to max out my yearly contributions? Ok.

I would say that, you need only invest as much as you are comfortable investing.
If you take 10 or 20 years etc to max out your nisa account, that is no problem, especially if you are investing in riskier assets that will sooner or later go through some kind of correction. Tsumitate does very nicely with those types of assets.

If you have the funds and would invest them in a taxable fashion otherwise, then sure, max out as soon as possible is fine too.