🕒 AS OF September, 2026
NISA: The Tax-Free Investing Account in Japan
| iDeCo | New NISA | |
|---|---|---|
| Official name | Individual-type Defined Contribution Pension (個人型確定拠出年金) | Nippon Individual Savings Account (少額投資非課税制度) |
| Main purpose | Retirement-focused private pension | Flexible asset building (any purpose) |
| Eligibility | Generally age 20 to under 65 (expanding toward under 70 in qualifying cases from Dec 2026) | Age 18+ Japan residents |
| Annual limit | Varies by status (see detailed limits below) | ¥3.6 million total(Tsumitate frame ¥1.2M + Growth frame ¥2.4M) |
| Lifetime / total limit | None (limited only by annual caps + years of contribution) | ¥18 million (of which Growth frame max ¥12 million) |
| Contribution / investment tax treatment | Full income deduction (lowers income tax + resident tax immediately) | No deduction (after-tax money) |
| Investment gains & dividends | Tax-free | Tax-free |
| Withdrawal / sale tax | Taxable, but retirement income deduction (lump sum) or public pension deduction (annuity) applies → often advantageous | Completely tax-free |
| Liquidity / Withdrawal | Principally locked until age 60 (almost no exceptions for housing, education, etc.) | Anytime – sell and withdraw freely |
| Account fees | Yes (account management fees; can be low or zero at online brokers) | Basically free |
| Investment products | Limited to those offered by the provider (investment trusts, deposits, insurance) | Broad range of approved stocks, investment trusts, ETFs, REITs, etc. |
| Frame reusability | Not applicable | Sold amount (book value) becomes reusable from the following year |
| Principal protection options | Available (deposits, insurance products) | Not available in tsumitate frame |
| Contribution flexibility | Monthly fixed amount (limited change opportunities) | Flexible timing within annual limits |
| Key advantages | Strong immediate tax saving via deductionForces long-term retirement savingPreferential exit taxation | High flexibilityMuch larger annual capacitySimple & broad product choiceEasy to use for multiple life goals |
| Key disadvantages | Money inaccessible until 60Lower annual ceilings (especially pre-Dec 2026 for employees)Fees & limited product choicePossible tax on withdrawal in some cases | No income-tax deduction on contributionsNo principal-protected products in main frames |
| Best suited for | Higher earners who can lock money until 60Self-employed wanting max tax savingsPure retirement focus | Anyone needing flexibilityLower tax bracketsHousing / education / emergency needsYounger people or uncertain cash flow |
| Typical priority guidance | Maximize first if high income + pure retirement money | Maximize first if liquidity needed or lower tax rate |
| Can be used together? | Yes | Yes |
iDeCo Annual Contribution Limits (Detailed) Link to heading
| Status | Current monthly limit | From Dec 2026 contributions |
|---|---|---|
| Self-employed / Type 1 | ¥68,000 (¥816,000/year) | ¥75,000 |
| Company employee (no corporate pension) | ¥23,000 (¥276,000/year) | Up to ¥62,000 (combined rules) |
| Company employee with corporate DC | ¥20,000 | Remainder after employer contributions (up to ¥62,000 total) |
| With DB / other pension or public servant | ¥12,000–¥20,000 range | Remainder after other contributions (up to ¥62,000 total) |
| Homemaker (Type 3) | ¥23,000 | Similar adjustment under new rules |