Context:
Moving to Japan in 2026 for the long haul.
Investments in a Roth IRA, tIRA, 401k (current employer), and taxable brokerage account.
All accounts except the 401k are with Schwab and in ETF index funds.
Before moving to Japan I am planning on converting any 401k Mutual Funds at Fidelity to ETF equivalents.
Questions/Ideas:
I am also considering resetting the cost basis for all my investments prior to relocating. It seems to me that it would simplify future cost basis calculations for tax filings and also realize all gains prior to living in Japan (and I'm in a lower marginal tax bracket this year than usual). Good/bad idea?
My understanding is that a Roth equivalent does not exist in Japan, and under the Japan-US tax totalization agreement, effectively the Roth account is a taxable brokerage account (apparently the NTA is pretty ambiguous on its stance for IRAs in general).
Assuming this is the case, I think it would probably be best if I just leave those investments as-is. Thoughts? I don't see a compelling case for changing anything with the Roth account.
Do US-based companies typically disallow 401k contributions once relocated, and offer a Japanese equivalent (Nisa?).
My concern would be PFIC avoidance if investing in a Japanese pension scheme. Perhaps it's easier for me to just take all post-tax money and dump it into my Schwab account for investing.
Gray area:
As far as future investing goes, from a tax compliance perspective, is notifying Schwab of international relocation (they allow international accounts, but will close the US checking account and convert it to an international one) "better" than just transferring my cash to Schwab and maintaining the US address?
What do you guys do? I've heard pros and cons on the sub and just really was hoping for some frank discussion of the different investment approaches.
I guess my biggest concerns are:
- Making tax filings easy (being compliant)
- Simplifying calculations (few cost basis line items, and probably using Yen to invest so I don't have to track currency conversions AND cost basis for new investments)
- Minimizing tax exposure
Thanks for reading if you made it this far.
by CpCdouchebag