Comparison of iDeCo, NISA and Tsumitate NISA
2023 is the last year you can contribute to a NISA or Tsumitate NISA under the current system. A new system with a lifetime allowance that combines both NISA and Tsumitate NISA will be introduced from 2024. See the NISA article for more details.
The below table summarises the features, allowing for simple comparisons. This may be helpful to those trying to determine which account(s) might be best for them/their families.
Note that in any calendar year, an individual cannot contribute to both a NISA and a Tsumitate NISA.
|Eligibility||In principle, those enrolled in the Japanese pension system.||Residents aged 18+||Residents aged 18+|
|Term of investments||Funds remain invested until age 60-75||5 years||20 years|
|Maximum annual investment||Varies according to circumstances;
¥144,000 - ¥816,000
|Are contributions deductible from taxable income?||Yes||No||No|
|Investment options||Choice of about 35 investment options from your provider, including mutual funds, cash, etc.||Listed stocks, funds, ETFs, REITs||Mutual funds|
|Withdrawals possible?||No withdrawals before 60 in principle.
(Lump sum withdrawal possible for those who lose eligibility to contribute and have contributed for less than 5 years or have total investments of less than 250,000 yen; other criteria apply)
|Period when product is available to new investors||Ongoing (while investor meets the eligibility criteria)||Until end of 2023 (a new lifetime NISA that combines Tsumitate and regular NISA will be introduced from 2024).||Until end of 2023 (a new lifetime NISA that combines Tsumitate and regular NISA will be introduced from 2024).|
|What happens at the end of the investment term?||Funds can ordinarily remain invested between ages 60 and 75. Benefits can be taken as a lump sum, an annuity, or a combination of the two.||Investments are transferred to a taxable account||Investments are transferred to a taxable account|
|What happens if you leave Japan?||Non-Japanese citizen: can manage funds from abroad but not make contributions; able to receive benefits abroad. Lump sum withdrawal option available if eligibility criteria are met (the main one being < 5yrs contributions or < ¥250,000 value of assets).
Japanese citizen: can continue to contribute if also voluntarily paying the Japanese pension.
|What happens if you die during the investment term?||Lump sum payable to next of kin|
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- Exceptions include individuals aged 65 and above, individuals already drawing an old age pension, individuals who have already received iDeCo benefits, Category 1 subscribers with full or partial exemptions or those insured by the Farmers' Pension, and Category 2 subscribers with certain corporate-type DC plans