The Retire Japan Guides to iDeCo and Nisa by Ben Tanaka

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I hesitate to call these books life-changing, partly as they are PDF documents (58 and 69 pages each) and well, even if you accept they are books, can any book read as a middle-aged man truly be considered life-changing?

But before I get to that, let me just summarise what these guides include. They are a no-nonsense, jargon-free explanation of two tax-efficient ways of investing for residents of Japan. The first is iDeCo, which basically allows you to invest up to ¥68,000  a month in approved global and Japanese stock and bond index funds tax free — you can take the contributions you make off your income tax and any capital gains (profits) made from your investments are tax free too. The proviso is that you can’t withdraw any money until you reach the age of 60. Nisa is an option that allows you to invest a maximum of ¥1.2 million a year (¥100,000 a month) and keep it invested for five years without paying any taxes on capital gains. The downside is that you can’t take contributions off your income tax but you can withdraw your investments at any time.

Bamboozled? Don’t be.  Tanaka, an English teacher by day, explains all the necessary terms in clear English and then offers a lot more, explaining the basic philosophy behind investing, when you should and when you shouldn’t invest, how not to get fleeced by unscrupulous investment advisers, and a highly practical step-by-step explanation of the process of opening iDeCo and Nisa accounts so that you could do that yourself without the need of paying for “expert” help.

Life-changing? For me, yes. Before I read these guides and studied what the RetireJapan website had to offer, I was in a bit of a financial panic. I knew the Japanese (or UK) state pension would never be enough for me to live comfortably on, but I didn’t know what to do to sort myself out, or whom I could turn to for trustworthy advice. I tried chatting to an ex-pat financial advisor but was put off by his desire to take all my (and my wife’s) assets, such as they are, and send them off to the Isle of Man. I just wanted to be in a position to make sensible investment decisions myself. And this is what these guides offer.

Since first reading these guides last year, my wife and I have now got eight months of investments accrued in iDeCo accounts and we’re just about to open our first Nisa accounts, hopefully this month (there are a few more hoops to jump through since the books were written — as a foreigner with a difficult to spell name, I had to apply by post rather than online, but the application process is inching forward).

The bottom line? I’m no longer in a panic over how I’m going to pay for our lives after retirement or how we’ll pay for our daughters’ educations. Sure, things may not work out as well as we imagine now, but with sensible plans in place thanks to these guides, there’s no reason to panic as we’re in as much control of our financial future as we can be. And that is truly life-changing.

Nos. 9 and 10 of 100 books I intend to read and review in 2020.

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Patrick Sherriff, an Englishman who survived 13 years working for newspapers in the US, UK and Japan. Between teaching English lessons at his conversation school in Abiko, Japan, with his wife, he writes and illustrates textbooks for non-native speakers of English, releases Hana Walker mystery novels, short stories, essays and a monthly newsletter  highlighting good fiction published in English about Japan. Saku’s Random Book Club is his latest project to spend more time with books.