FINANCIAL TIPS FOR NEW OLIM, PART 2
With the landing of multiple Nefesh B’Nefesh flights over the summer I would like to continue my series of financial tips for new Olim. Last week I discussed the need for new Olim to get their ‘Financial Aliyah’ in order. I explained how important it is to get your hands around a budget and keep your retirement plans from the old country current. This week I would like to focus on issues of employment benefits and banking.
New Job
When job hunting, make sure that you get a fair compensation offer. Much to my chagrin, there are employers out there that will try to take advantage of your “new immigrant” status and offer you less than the market wage. They feel that you will be willing to ‘settle’ and be so happy to get any job that you will forgo a competitive salary. Hang tough when negotiating salary. As they say in the local vernacular: “Don’t be a frier!”
When discussing compensation, it is important to know that there are many social benefits that salaried workers are entitled to and you should make it clear that you want them as well. In fact, in most cases, it is now the law that you receive certain pension plans. Savings plans, both short term (Keren Hishtalmut) and long term (Kupat Gemmel), can help you realize the goals that you have set forth for yourself. Such expenses are often covered by the money that the worker has put away over the years, which is matched by their employer according to the terms of the policy.
Recent reforms in savings plans give more choice to employees than ever before. It’s important to speak with a professional to understand what you are going to be getting and which provider to choose. It is also important to verify that you are receiving your full complement of sick days and vacation days.
Your U.S. Investment Account
Since the 9/11 terrorist attacks, US investment firms have taken a very strict approach to non-US domiciled accounts (accounts without a US address). With the enactment of the Patriot Act and other new laws, it has become much harder for these firms to accept accounts from U.S. citizens living abroad. Many firms have just decided that they would rather not deal with the issue and have made clients close down accounts or have stopped servicing these accounts. Some firms will not accept transactions from clients living here and others have stopped allowing their advisors to speak with clients residing abroad.
Olim should investigate how their investment firms are treating the issue, and if there is a problem, I would recommend going local. I would find an advisor who is licensed both in Israel and in the U.S. to handle the accounts. A local professional with an arrangement with a U.S. firm should not have the same problem. He should have all the compliance in place for his clients to access the wide array of investment choices and advice that you’re used to.
Where to bank
While 20 years ago Israeli banks may have been the butt of jokes, today Israel has developed a very sophisticated banking system. While there are only a few banks which control the lion’s share of the market, they are all very competitive and offer a full range of investment products. While customer service has improved, it is still lacking what you were used to pre-Aliyah. As such, when investigating local banks you need to evaluate the plusses and minuses of each one and NOT compare them to your bank back in the U.S.
I would take that one step further: In order to integrate into Israeli society, it’s not productive to compare everything to the way it was back in the old country. It’s not worse – it’s just different. Some things may even be better here!
Here’s to an easy integration.
The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.
Aaron Katsman is author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, SIFMA, FSI. For more information, visit www.aaronkatsman.com or email aaron@lighthousecapital.co.il
