iDeCo / NISA tax-savings calculator — Japan tax-advantaged investing
Estimate the tax savings of Japan's two main tax-advantaged investment accounts. iDeCo mode tallies the annual income-tax + 10% resident-tax deduction on contributions (using the progressive bracket table) AND the 20.315% capital-gains exemption. NISA mode only applies the 20.315% gain exemption. Compare against the after-tax outcome of doing the same monthly contributions in a regular taxable brokerage account. Runs entirely in your browser — your figures never leave the device.
How to use
Pick iDeCo or NISA, then enter your monthly contribution, the number of years, and the expected annual return. iDeCo also asks for your taxable income — used to look up the marginal income-tax bracket for the contribution-time deduction (added to the 10% resident tax). The result shows: total contributed, the annual / cumulative iDeCo contribution-time saving, the projected portfolio value and gain, the 20.315% capital-gains exemption value, the total tax savings, and a side-by-side comparison against the after-tax outcome in a taxable brokerage. iDeCo pay-out taxes are not modelled here — use retirement-tax-jp for that.
FAQ
- How do iDeCo and NISA differ in tax treatment?
- iDeCo is a three-stage benefit: contribution-time deduction, tax-free growth, and a separate (often favourable) tax treatment at withdrawal under retirement-allowance / pension rules. NISA is purely tax-free growth — no contribution deduction. This tool covers the first two stages.
- How is the contribution-time saving computed?
- Annual contribution × (income-tax marginal rate + 10% resident tax). For example a person with JPY 5M taxable income has a 20% income-tax bracket → 30% combined. Monthly JPY 23,000 (= JPY 276,000 a year) saves JPY 82,800 in tax per year. The tool picks the bracket from the income table.
- What annual return should I use?
- 3–5% is a common long-term estimate for diversified index funds. Historical S&P 500 / global-stock returns are 5–7%, but many planners discount to ~3% to allow for FX, costs and tax drag. Enter 0 for a principal-only baseline.
- How is this different from compound-interest?
- compound-interest gives a pure portfolio-growth simulation. This tool reuses the same compounding math but adds the tax-savings story: contribution deduction + the value of the 20.315% capital-gains exemption + a head-to-head comparison vs. a taxable brokerage. Use compound-interest for the year-by-year trajectory and this tool for the headline tax-savings figure.
- Does it enforce the new NISA caps?
- No. Contributions above JPY 360k/year or JPY 18M lifetime are still treated as tax-free here. Treat the result as 'what NISA would save you if it fit inside the cap'.
- What about iDeCo pay-out tax?
- Not modelled. Pay-out as lump-sum uses the retirement-income deduction; as annuity uses the public-pension deduction. Combine retirement-tax-jp for the lump-sum side.
- Is my input uploaded?
- No. All calculations run in your browser — your income and contribution figures stay on the device.
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