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iDeCo Japan for US expats: 2026 limits, updates and US tax rules
iDeCo is Japan's individual-type defined contribution pension – a voluntary, tax-advantaged retirement account.
The minimum contribution is ¥5,000 per month, and the maximum depends on your employment category, topping out at ¥68,000 per month for self-employed residents. Funds are generally locked until age 60.
The IRS does not recognize iDeCo as a qualified retirement plan. Contributions are not deductible on your US return, and investment growth may be taxable each year.
Japanese mutual funds inside the account are generally classified as PFICs requiring Form 8621.
The account also triggers FBAR and Form 8938 reporting once you cross the filing thresholds.
The US-Japan tax treaty addresses pension income under Article 17, but it does not automatically make iDeCo tax-deferred for US purposes.
iDeCo: Japan's individual-type defined contribution pension
iDeCo – short for individual-type Defined Contribution, or 個人型確定拠出年金 – is a voluntary pension plan available to most Japanese residents enrolled in the national pension system, generally from age 20 up to 60 or 65 depending on your insured category.
You choose a financial institution, select your own investment mix, and your contributions are deducted from your Japanese taxable income.
Three asset types are available inside an iDeCo account:
- Mutual funds – domestic and international equity, balanced, and bond funds offered by the provider
- Time deposits – fixed-term bank deposits with guaranteed principal
- Insurance products – certain low-risk savings-type insurance plans
The provider you choose – SBI Securities, Rakuten Securities, Matsui Securities and others – determines which specific funds are available, the monthly account fee, and the quality of the English-language interface.
An iDeCo Japan account is separate from Japan's employer-sponsored defined contribution plan. If your employer already offers a corporate DC plan, your iDeCo contribution cap is lower.
Check the fund list before opening an account – switching providers later involves paperwork and a temporary cash-out period.
How iDeCo works: eligibility, investment options and the age 60 access rule
iDeCo accounts are opened through a bank, brokerage, or insurance company registered as an iDeCo plan administrator. Applications go through the institution you choose. Company employees also need their employer to complete a certificate confirming their employment and any corporate pension.
Eligibility
Any Japanese resident enrolled in the national pension system can join iDeCo – including US citizens on a work visa or permanent residency.
Company employees and civil servants – Category 2 insured – can join from 20 up to age 65. Self-employed residents and dependent spouses – Category 1 and Category 3 insured – can generally join only from 20 up to age 60, though you can extend this to 65 if you voluntarily continue National Pension coverage.
Enrollment requires active participation in one of Japan's public pension programs: National Pension, Employees' Pension Insurance, or the mutual aid association for civil servants.
The age 60 lock
Funds contributed to iDeCo cannot be withdrawn before age 60, with very limited exceptions. The minimum receiving age depends on how many years you have contributed.
Ten or more years of contributions let you begin withdrawals at 60. Fewer years push the starting age back – as late as 65 for someone with under two years of contributions.
Investment allocation
You allocate contributions across the funds your provider offers. You can change your allocation at any time without triggering a taxable event in Japan.
For US tax purposes, switching between funds may have consequences if the new fund is a PFIC – the switch can trigger a deemed disposition that must be reported on Form 8621.
iDeCo contribution limit 2026 in Japan: monthly caps by employment type
Your iDeCo limit depends on your employment category and whether your employer offers a separate corporate pension.
Current limits reflect the December 2024 reform that raised the cap for employees with a defined benefit or mutual aid pension from ¥12,000 to ¥20,000.
| Employment category | Monthly cap | Annual equivalent |
|---|---|---|
| Self-employed – including national pension add-on | ¥68,000 | ¥816,000 |
| Company employee with no corporate pension | ¥23,000 | ¥276,000 |
| Company employee with a DB or DC plan | ¥20,000 | ¥240,000 |
| Civil servant or mutual aid member | ¥20,000 | ¥240,000 |
| Homemaker or dependent spouse – Category 3 insured | ¥23,000 | ¥276,000 |
The iDeCo contribution limit for 2026 in Japan applies only until December 2026.
Japan's 2025 pension reform act, enacted on June 13, 2025, raises the cap to ¥62,000 per month for company employees and ¥75,000 per month for self-employed residents, and extends the contribution age limit from 65 to 70 for members who meet certain conditions.
For employees with a corporate pension, the ¥62,000 ceiling is shared with the employer's plan. The Ministry of Health, Labour and Welfare lists these changes as effective from December 2026 contributions, so the caps in the table above apply until then. Confirm the exact start date on the official iDeCo portal before changing your contribution
These increases are enacted and are scheduled to take effect in December 2026 – confirm the exact date on the official iDeCo portal before making contribution decisions.
Contributions above the ¥5,000 minimum can be set in ¥1,000 increments. Caps change with Japanese reforms, so check which version of the rules your financial institution is applying.
iDeCo minimum monthly contribution of ¥5,000 and account fees
The iDeCo minimum monthly contribution is ¥5,000 – roughly $32 at exchange rates in late 2026.
Three types of fees apply from the moment you enroll:
- Setup fee – a one-time ¥2,829 charged by the National Pension Fund Association
- Monthly account maintenance – ¥171 to the NPFA and the trust bank, plus a provider-specific fee that ranges from ¥0 at SBI or Rakuten to over ¥400 at some bank-affiliated providers
- Ongoing fund management fees – the expense ratio of each fund you hold, deducted from NAV
At the minimum contribution of ¥5,000 per month – ¥60,000 per year – fixed fees take a noticeable share. A provider charging ¥171 per month in total account fees consumes 3.4% of a ¥5,000 contribution.
Low-fee providers and larger contributions reduce this drag significantly.
iDeCo updates and recent reforms expats should know
iDeCo rules have changed repeatedly since 2022, so check which version of the rules a guide is describing before acting on it.
Recent Japan pension iDeCo news includes the following changes:
- 2022 – the enrollment age was extended from 60 to 65, allowing longer contribution periods for those who continue working and paying into the national pension system.
- December 2024 – the contribution cap for employees with a defined benefit plan or mutual aid pension rose from ¥12,000 to ¥20,000 per month. This change is already in effect.
- June 2025, effective December 2026 – Japan enacted a pension reform act that raises iDeCo caps to ¥62,000 per month for company employees and ¥75,000 for self-employed residents, and extends the contribution age limit to 70 for members who meet certain conditions.
These changes are significant for US expats because higher contribution caps mean more potential PFIC exposure, larger FBAR-reportable balances, and greater interaction with the foreign tax credit calculation.
If you already hold an iDeCo, the December 2024 change may allow you to increase contributions – but confirm your new cap with your employer or iDeCo provider first.
iDeCo vs 401(k): how Japan's pension plan compares to a US plan
Although people call iDeCo the "Japanese 401(k)," the IRS does not treat it as a qualified retirement plan – and that difference drives most of the US tax complexity.
| Feature | iDeCo | US 401(k) |
|---|---|---|
| Maximum contribution – employee | ¥23,000 – ¥68,000 per month depending on category | $23,500 per year (2025), plus a $7,500 catch-up for ages 50–59 and 64 and older, or an $11,250 catch-up in place of the $7,500 for ages 60–63 under the SECURE 2.0 catch-up rules |
| US tax deduction | None – the IRS does not recognize iDeCo as a qualified plan | Yes – contributions reduce US taxable income |
| Tax on investment growth | May be taxable annually in the US depending on treaty position | Tax-deferred until withdrawal |
| PFIC exposure | Yes – Japanese mutual funds are generally PFICs | No – US-domiciled funds are not PFICs |
| FBAR and Form 8938 reporting | Yes – once thresholds are met | Not applicable for domestic plans |
| Withdrawal age | 60–65, depending on contribution history | 59½, or 55 if separated from service |
iDeCo is similar to a 401(k) in structure – both are voluntary, defined contribution plans with tax advantages in the country of origin – but the US tax treatment is fundamentally different.
US citizens generally get no US deduction and may owe US tax on growth each year.
iDeCo vs Roth IRA: why the tax treatment is not equivalent
A Roth IRA uses after-tax dollars and delivers tax-free withdrawals. The annual IRA contribution limit is $7,000 (2025), plus $1,000 catch-up for age 50+.
Qualified withdrawals – after age 59½ with a five-year holding period – are completely tax-free, including investment gains.
iDeCo contributions are pre-tax in Japan, but that Japanese deduction has no US equivalent. Withdrawals are taxed as retirement income in Japan, not tax-free.
For US purposes, iDeCo investment gains may be taxable annually – the opposite of Roth treatment. A Roth IRA is a US-recognized account that grows and distributes tax-free. iDeCo is a foreign account whose tax benefits exist only on the Japanese side.
iDeCo and NISA: which Japanese account fits a US citizen?
For US citizens, iDeCo vs NISA is less about Japanese tax savings and more about which account creates fewer US reporting headaches.
NISA – the Nippon Individual Savings Account – was overhauled in 2024 with two investment frames: Tsumitate at ¥1.2 million per year and Growth at ¥2.4 million per year, for a combined annual cap of ¥3.6 million and a lifetime limit of ¥18 million.
NISA has no age lock – you can withdraw anytime – and no required contribution period.
Both accounts generally hold Japanese mutual funds, and both create PFIC exposure for US filers. The practical difference is that NISA has no lock-up period and no Japanese income tax deduction, while iDeCo locks funds until age 60 and gives a Japanese income tax deduction on contributions.
iDeCo's Japanese tax deduction has real local value – it lowers your Japanese income tax and resident tax. But it adds complexity because you must also handle FBAR and Form 8938 reporting plus potential PFIC filings. NISA creates the same PFIC problem without the lock-up.
Neither account gives a US tax advantage. The choice depends on whether the Japanese tax deduction and the forced savings discipline of iDeCo outweigh the flexibility of NISA.
See our TFX guide to pension and retirement in Japan for a broader view of the Japanese pension system and how it interacts with US filing.
How the IRS treats iDeCo as a foreign pension plan
The IRS classifies your iDeCo Japan pension as a non-qualified foreign pension plan. This means contributions are not deductible on your US return, and income earned inside the account may be currently taxable.
Four key consequences for US filers:
- No US tax deduction – the Japanese income tax deduction does not carry over to your US return. Your iDeCo contribution is made with after-tax dollars for US purposes.
- Investment income may be taxable annually – interest, dividends, and gains inside the account are not tax-deferred for US purposes. The exact treatment depends on whether you claim treaty benefits on Form 8833.
- The account triggers FBAR and Form 8938 reporting – once your foreign financial accounts cross the reporting thresholds, your iDeCo balance must be disclosed.
- Japanese mutual funds are PFICs – each fund inside iDeCo may require a separate Form 8621 filing.
This treatment applies regardless of how Japan taxes the account. A US tax outcome that mirrors the Japanese tax-deferred treatment would require either a specific treaty provision or an IRS ruling – neither of which currently applies to iDeCo directly.
The same framework applies to other foreign retirement accounts – not just iDeCo.
Any non-qualified foreign pension is taxable in the US unless a treaty provision or specific IRS guidance provides otherwise.
US-Japan tax treaty pensions: Article 17 and Form 8833
The US-Japan tax treaty addresses pension income under Article 17.
It states that pensions and similar remuneration paid for past employment are taxable only in the country of residence.
Article 17 does not automatically grant iDeCo the same tax-deferred status as a US 401(k). Whether treaty relief applies depends on the plan's legal structure and whether the IRS accepts it as a "pension" under the treaty.
If you take the position that Article 17 shelters iDeCo income from current US taxation, you must disclose it on Form 8833.
This form explains to the IRS why you are claiming a treaty benefit and must be filed with your return each year you rely on the position.
A treaty-based position does not remove the FBAR or Form 8938 reporting obligation – those exist independently of any income tax treaty. And if the IRS disagrees with your treaty interpretation, the deferred income becomes currently taxable, potentially with penalties.
This is one area where working with a CPA who handles US-Japan tax returns makes a measurable difference. The treaty language is broad enough to support an argument for deferral, but narrow enough that the IRS could challenge it.
PFIC Form 8621: the Japanese mutual fund problem inside iDeCo
Most Japanese investment trusts and index funds – the products available inside iDeCo – meet the IRS definition of a passive foreign investment company.
A PFIC is any non-US fund where 75% or more of gross income is passive, or 50% or more of assets produce passive income.
Japanese mutual funds almost always qualify.
Each PFIC held inside your iDeCo requires its own Form 8621. If your iDeCo holds three different funds, you file three separate forms.
Three election methods are available to report PFIC income:
- Qualified Electing Fund – QEF – you report your share of the fund's income annually, but Japanese fund companies rarely provide the statements needed for this election
- Mark-to-market – you report unrealized gains and losses based on year-end fair market value, available if the fund trades on a recognized exchange
- Default excess distribution – the IRS applies the highest tax rate plus an interest charge on any "excess distribution," which includes gain at sale
If the aggregate value of all your PFIC stock is $25,000 or less – $50,000 if filing jointly – and you did not receive an excess distribution or recognize gain selling any of it that year, you can skip the detailed reporting for those funds. If you had a distribution or a sale with gain, this exception does not apply, and you still need to file.
Time deposits and insurance products inside iDeCo are not PFICs. If PFIC reporting is a concern, allocating part of your iDeCo to time deposits reduces – but does not eliminate – the filing burden.
Is iDeCo a foreign trust? Form 3520 and 3520-A considerations
Some foreign pension arrangements raise a foreign trust question under IRS rules.
Form 3520 and Form 3520-A are the reporting forms for US persons with interests in certain tax-favored foreign trusts.
Whether iDeCo is treated as a foreign trust depends on the plan's features and whether relief exists under the treaty or IRS guidance. The IRS has not issued specific guidance classifying iDeCo as a trust or exempting it.
Eligibility for any reporting relief depends on the plan's structure and should be reviewed with a tax professional experienced in cross-border pension issues.
If iDeCo is treated as a foreign trust, the annual reporting requirements on Form 3520 and Form 3520-A apply.
The penalty is the greater of $10,000 or 5% of the trust assets you're treated as owning, so a larger iDeCo balance means a larger opening penalty, not just a flat $10,000. This is a risk worth evaluating early – not after you receive an IRS notice.
FBAR FinCEN 114 and Form 8938 reporting for a Japan iDeCo account
An iDeCo account is generally reportable on both FinCEN Form 114 – the FBAR – and Form 8938 once you cross the filing thresholds.
| Reporting form | Filing threshold – abroad, single | Filing threshold – abroad, MFJ | Applies to iDeCo? |
|---|---|---|---|
| FBAR – FinCEN Form 114 | $10,000 aggregate across all foreign accounts at any point during the year | Same – $10,000 aggregate | Yes – iDeCo is held at a foreign financial institution |
| Form 8938 – FATCA | $200,000 end of year or $300,000 at any time | $400,000 end of year or $600,000 at any time | Yes – iDeCo is a specified foreign financial asset |
The FBAR threshold is based on the aggregate value of all your foreign accounts – not just iDeCo. If your Japanese bank account, iDeCo, and any other foreign accounts together exceed $10,000 at any point during the year, all accounts must be reported.
The FBAR is filed electronically through FinCEN's BSA E-Filing System by April 15, with an automatic extension to October 15.
Penalties
Non-willful FBAR penalties can reach $16,536 per year (2025), assessed per report rather than per account under the Supreme Court's 2023 ruling in Bittner v. United States.
Willful violations carry penalties up to $165,353 (2025) or 50% of the account balance, whichever is greater.
Form 8938 penalties start at $10,000 and can increase for continued non-filing.
See our FBAR vs Form 8938 comparison for the full breakdown of how these two filings differ and when each applies.
Taxation of iDeCo withdrawals: lump sum vs annuity in Japan and the US
How you take your iDeCo money affects both your Japanese tax bill and the foreign tax credit you can claim on your US return.
iDeCo offers two withdrawal options starting at age 60: a lump-sum payment or an annuity paid over 5 – 20 years. You can also combine both.
| Factor | Lump sum | Annuity |
|---|---|---|
| Japanese tax treatment | Retirement income deduction – lower effective rate for long contribution periods | Public pension deduction – taxed similarly to National Pension income |
| US tax treatment | Taxable as pension or annuity income in the year received | Taxable as ordinary income as each payment is received |
| Basis recovery | No US basis unless you already paid US tax on contributions | Same – no US basis unless US tax was previously paid on contributions |
| Foreign tax credit potential | Claim credit for Japanese tax paid on the lump sum | Claim credit for Japanese tax on each year's annuity payment |
Lump-sum withdrawal in Japan
In Japan, lump-sum withdrawals are taxed as retirement income, not ordinary income. A retirement income deduction applies – ¥400,000 per year of contribution for the first 20 years, then ¥700,000 per year beyond that.
For someone who contributed for 25 years, the deduction is ¥11.5 million before any tax applies – but only if no other retirement-type payment falls within the overlap window.
If you also receive a company retirement payment, Japan's overlap-adjustment rule generally excludes the years your iDeCo and your employment overlapped from one of the two deductions, which can reduce it substantially.
A 2025 law change reportedly widened this window for payments made from January 2026 onward, so check the timing of both payments with a Japan-qualified tax preparer before deciding when to take your iDeCo lump sum.
US treatment
On the US side, the lump sum is taxable as pension income in the year received.
You can claim a foreign tax credit for the Japanese tax paid, but the credit cannot exceed the US tax owed on that same income.
Annuity payments are taxed in Japan under the public pension income deduction and in the US as ordinary income each year. The foreign tax credit applies year by year.
Foreign tax credit vs Foreign Earned Income Exclusion when you contribute to iDeCo
The Foreign Earned Income Exclusion – FEIE – excludes up to $130,000 (2025) of foreign earned income from US tax.
You claim it on Form 2555.
The foreign tax credit – FTC, claimed on Form 1116 – lets you offset US tax with taxes you paid to Japan instead.
The iDeCo deduction lowers your Japanese taxable income. If you use the FEIE, excluding income already reduces your US tax – and you cannot also claim a foreign tax credit on the excluded income. The Japanese tax savings from iDeCo do not carry over to the US side.
If you use the FTC instead, every yen of Japanese income tax paid becomes a potential credit against your US tax. The iDeCo deduction reduces your Japanese tax, which in turn reduces the foreign tax credit available.
Whether you use the FEIE or the FTC changes how much of an iDeCo contribution is "worth" from a combined-tax perspective.
NOTE! When claiming the foreign tax credit, note that the Gensen Choshu Hyo – your Japanese withholding tax slip – shows only national income tax in field F. You must add the separate resident tax amount to calculate the full Japanese tax paid.
For tax year 2026, the FEIE increases to $132,900.
US-Japan Totalization Agreement: how it fits with iDeCo
The US-Japan Totalization Agreement coordinates Social Security and Japan's public pension system.
It prevents double taxation of social security contributions and lets you combine work credits from both countries to qualify for benefits.
The agreement covers public pension contributions – National Pension and Employees' Pension Insurance – not voluntary private accounts like iDeCo.
Moving back to the US does not cause your iDeCo to transfer into Social Security or a US retirement plan. iDeCo is a voluntary private savings plan outside the totalization framework. It remains a Japanese account subject to Japanese rules regardless of where you live when you withdraw.
Leaving Japan: can you withdraw your iDeCo early?
Most long-term residents cannot withdraw iDeCo funds before age 60. Moving back to the US does not unlock your iDeCo unless you meet strict lump-sum withdrawal conditions.
Early withdrawal is possible only if you meet all of the following:
- You are a non-Japanese national living outside Japan
- You are not currently enrolled in a corporate DC plan
- You are under 60
- You are not currently receiving a disability benefit
- Either your iDeCo balance is ¥250,000 or less, or you contributed for five years or fewer
- You apply within two years of losing your corporate DC or iDeCo eligibility
These are the conditions that apply to most departing expats. The full eligibility test, per the official eligibility conditions, also excludes anyone who still qualifies to join iDeCo under Japan's National Pension system in specific categories, so confirm your exact eligibility with your iDeCo provider or the National Pension Fund Association before applying.
Per Mizuho Bank's iDeCo guidance and Sony Bank's iDeCo guidance, the balance and contribution-period tests are generally treated as alternatives rather than combined requirements, and a Japanese national living overseas generally does not qualify.
If you qualify, you receive a lump-sum refund minus 20.42% Japanese withholding tax. You may be able to recover part of that withholding by filing a Japanese tax return through a tax representative in Japan.
If you do not meet these conditions – and most long-term residents will not – your iDeCo remains in Japan until you reach the withdrawal age. You can stop contributing when you leave, but the account stays open and continues to be invested.
The account continues to be reportable on your FBAR and Form 8938 as long as you hold it, even after returning to the US.
See our guide to moving to Japan from the US for the broader tax picture when relocating between the two countries.
Worked example: a US citizen in Tokyo contributing ¥23,000 per month
Based on a common TFX client scenario, here is how the annual US filing obligations stack up.
Assumptions: single filer, age 35, Japanese salary of ¥8 million, iDeCo contributions of ¥276,000 per year, iDeCo balance of ¥2.5 million across two index funds.
Annual filing obligations:
- Japanese income tax – iDeCo contributions are fully deductible, reducing taxable income by ¥276,000 and saving roughly ¥55,000 – ¥83,000 in combined national and resident tax depending on the marginal rate
- US Form 1040 – Japanese salary is reported as foreign income. The filer claims either the FEIE or the FTC – not both on the same income
- Form 8621 – PFIC reporting – at roughly $16,700 (¥2.5 million), the combined value of the two index funds is below the $25,000 threshold for single filers, so Form 8621 is generally not required for a year with no excess distribution and no gain on a sale or switch. If the filer switches funds at a gain, one Form 8621 per fund is required. Japanese fund companies rarely provide the statements needed for a QEF election.
- FBAR – FinCEN Form 114 – the ¥2.5 million iDeCo balance combined with a Japanese bank account likely exceeds the $10,000 aggregate threshold. All foreign accounts are reported
- Form 8938 – at an iDeCo balance of roughly $15,800, this filer is below the Form 8938 threshold of $200,000 for single filers abroad. No Form 8938 needed at this balance level
- No US deduction – the ¥276,000 iDeCo contribution does not reduce US taxable income
Should US expats open an iDeCo? A decision checklist
Whether an iDeCo is worth it for a US citizen depends on your Japanese tax savings versus US compliance costs and reporting complexity.
Use this checklist:
- Check your Japanese tax bracket – the higher your marginal rate, the more valuable the iDeCo deduction. At a 30%+ combined rate, the tax savings are meaningful.
- Estimate PFIC compliance cost – each mutual fund requires Form 8621. If your tax preparer charges per form, two or three PFICs can add $500 – $1,500 to annual filing fees.
- Consider low-PFIC options – time deposits inside iDeCo avoid PFIC exposure entirely. You lose the equity upside but eliminate the filing burden.
- Compare with NISA – NISA offers flexibility with no lock-up and creates the same PFIC problem. If you do not need the Japanese tax deduction, NISA may be simpler.
- Confirm your reporting thresholds – an iDeCo balance combined with other foreign accounts can push you past the $10,000 FBAR threshold quickly.
- Factor in the age 60 lock – if you plan to leave Japan before 60 and your balance will exceed ¥250,000, your funds are locked until withdrawal age.
An iDeCo can still make sense for some US citizens if the Japanese tax savings and long-term returns outweigh the US compliance costs. The calculation is individual – it depends on your Japanese tax bracket, your account size, and how long you plan to stay in Japan.
Frequently asked questions
iDeCo – individual-type Defined Contribution pension – is Japan's voluntary, tax-advantaged retirement savings plan. Contributions are deductible from Japanese income tax, and funds are generally locked until age 60. It is similar in concept to a US 401(k), but the IRS does not recognize it as a qualified plan.
The minimum iDeCo contribution is ¥5,000 per month. Above that, you can set your contribution in ¥1,000 increments. At this minimum level, fixed account fees represent a larger share of your total investment.
The maximum depends on your employment category. Self-employed residents can contribute up to ¥68,000 per month. Company employees without a corporate pension can contribute ¥23,000. Those with a defined benefit or mutual aid pension can contribute ¥20,000 – raised from ¥12,000 in December 2024.
Yes. An iDeCo account is held at a foreign financial institution and must be reported on FinCEN Form 114 if your aggregate foreign account balances exceed $10,000 at any point during the year.
The FBAR deadline is April 15, with an automatic extension to October 15. For the tax year 2025 filing season, the regular return deadline is April 15, 2026, with an automatic two-month extension to June 15, 2026 for US citizens living abroad.
iDeCo itself is not a PFIC – it is an account. But the Japanese mutual funds and investment trusts held inside iDeCo are generally PFICs, requiring Form 8621 for each fund. Time deposits and insurance products inside iDeCo are not PFICs.
No. The IRS does not recognize iDeCo as a qualified plan, so contributions are not deductible on your US federal return. The Japanese income tax deduction does not carry over. Your iDeCo contribution is treated as an after-tax investment for US purposes.
Only if your balance is ¥250,000 or less, you contributed for five years or fewer, you are not currently receiving a disability benefit, and you apply within two years of losing pension enrollment. Most long-term residents do not qualify.
If you do not meet these conditions, your iDeCo remains in Japan until withdrawal age – between 60 and 65 depending on contribution history.
iDeCo and a 401(k) are both voluntary defined contribution plans, but the IRS does not treat iDeCo as a qualified plan.
US 401(k) contributions of up to $23,500 (2025) reduce US taxable income and grow tax-deferred. iDeCo contributions reduce Japanese taxable income but give no US tax benefit, and investment growth may be taxable each year on your US return.
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