Hello All! Long time reader, first time poster - figured it's finally time to be active in the community.
Backstory: My wife is a Japanese citizen, and I have twins < 1 who are dual US/JPN citizens. We currently reside in Japan, I work for the US Military and spouse is a SAHM. Almost all of our financial dealings are US based - Retirement Accounts, Health Insurance, Checking/Savings Accounts, Residence. Most shopping also happens on Base, in US dollars - we occasionally will purchase groceries from the local Japanese economy. Currently, we receive what is known in Japan as "Kodomo Teate", or Child Allowance. This is 80,000 Yen paid every 4 months per child, so 480,000 Yen per year (~ $4,000) combined. This will continue for the next two years, after which it will scale down to 312,000 yen (~ $2,500) per year until they are in Middle School. I have been unable to find any good place to put this money on the Japanese side, but would like to keep it in some manner tied to the children - possibly a college fund paid for courtesy of the Japanese government?
Questions: I would like to keep this money somewhere where I can either gift it to my children or use it for College expenses or down payment etc... , but I have been unable to find anything on the Japanese side that gets any interest. I am unsure if it is a good idea to transfer this money from Yen to USD, especially considering the frequent fluctuations between the two currencies. I don't want to try to guess when which currency will be changing in which direction. Should I open a 529 (USD) and then just transfer all of the money into it every 4 months? Should I just throw it in a savings account based in USD? Should I keep it in a savings account in Yen? I am especially confused because Japan has essentially had no inflation for 30 years, but America does have inflation, so if I invest it in yen am I likely to lose money down the road if the kids want to go to an American College? Can anyone think of anything else I should use this money for, or a different investment vehicle to put it in in Japan? Just read this
http://forum.mrmoneymustache.com/investor-alley/ira-for-baby/ about IRAs for children - might I be able to claim the allowance from the Japanese government as income and stash it in each child's IRA?
Thanks everyone!