Comparison of iDeCo, NISA and Tsumitate NISA

iDeCo, NISA and Tsumitate NISA are all tax advantaged accounts for Japan-resident adults which are suitable for long-term savings and investments.

2023 was the last year you could contribute to an Old NISA or Tsumitate NISA under the previous system. A new system with a lifetime allowance that combines both NISA and Tsumitate NISA has been 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.

Comparison of iDeCo, NISA and Tsumitate NISA

	iDeCo	Old NISA	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	¥1.2million	¥400,000
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)	Yes	Yes
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