RetireJapan

NISA and iDeCo both grow safe from capital gains tax.

iDeCo payments are made out of pre-tax income, NISA are not.

At withdrawal, iDeco is taxable as a retirement bonus for lump sums or as pension income for a monthly pension (or a mixture of both).

But what happens when I draw down NISA in retirement? The iDeCo guide goes into tax but the NISA doesn’t. Is it all just tax free for ever…?

New NISA is just tax free forever (prior version was only for 5 years) in Japan.

banders wrote: ↑Wed Jul 10, 2024 1:00 am Is it all just tax free for ever…?

Yep.

So filling up a new NISA account as soon as possible might just be the only thing most people will need to do in Japan to sort out their finances once and for all.

Fill it by 45, then leave it to grow for 20 years (18m x4 = 72m or so?) and then sell it as needed in retirement to supplement pensions etc.

RetireJapan wrote: ↑Wed Jul 10, 2024 2:33 am
Fill it by 45, then leave it to grow for 20 years (18m x4 = 72m or so?) and then sell it as needed in retirement to supplement pensions etc.

This plus iDeCo, even at 23,000 per month, if planning to stay in Japan.
If I can 'encourage' my kids to do this when they start work, they will hopefully not have too many money worries.

OK, nice. Thanks all. So when I retire, I can simply sell, say, ¥100m of NISA and transfer it to my local bank? Do we simply not declare that ¥100m that suddenly appears in my account on our tax return? Won't the bank or tax office ask where it's from? (I don't do our taxes so not sure how things work).

banders wrote: ↑Wed Jul 10, 2024 4:01 am OK, nice. Thanks all. So when I retire, I can simply sell, say, ¥100m of NISA and transfer it to my local bank? Do we simply not declare that ¥100m that suddenly appears in my account on our tax return? Won't the bank or tax office ask where it's from? (I don't do our taxes so not sure how things work).

Because the NISA is not taxable there isn't anything you need to report when you sell. Banks in Japan may ask about the source of large money transfers but if they don't ask there isn't anything you need to. If you are subject to reporting assets then the NISA account would be included in your asset declaration each year.

A bank may caution a new depositor that that max protected/insured threshold is well below ¥100M.