I will be joining a company soon that offers a DC plan.
I got a document where I can decide, in percentage, to which funds I want to allocate my monthly contribution to.
This is my first time dealing with a DC plan, have never heard of it before, neither the nearly 25 products I can choose from.
Any advice on how to make the ‘right’ choice would be appreciated!
I’m a resident here in Japan.
2 comments
Search DC on r/JapanFinance there are many threads about it. Nobody knows what the ‘right’ choice are. It’s based on how much risk are you willing to take. I suggest learning how DC works first, and take it slow. (Or just put them in deposit for now, and change them when you get the hang of it)
Are you a US citizen or US green card holder?
If so you’re going to want to make sure the fund/s you pick are not PFICs (chances are very slim edit: chances are slim that they are not PFICs I.e they are pretty much all likely to be PFICs) but some DC platforms offer an insurance type fund which grows by 0% I.e essentially park the cash. But that is pretty much all US citizens can do unless they want the PFIC tax nightmare (or of course unless they are just ignoring their US tax obligations….)
If you’re not a US citizen/US geeencard holder then you can go ahead and pick pretty much any fund which takes your fancy. For my DC I picked the foreign equity fund (was not many funds to pick from but meh…. It’s free money from my employer. I then contribute ¥20,000 to iDeCo thanks to the October 2022 law changes)