Haircuts and being careful with IRA distributions

As originally appeared in The Jerusalem Post on December 2, 2022.

“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair.” -Sam Ewing

Earlier this week I went running and when putting on my hat realized that my hair was very long. Then I calculated it had been since the week before Rosh Hashana since I last visited the famous MispaRafi on Ussishkin Street in Jerusalem. I made an appointment, got the haircut, then got home, and again while looking in the mirror to see if it was a good haircut, I saw a huge block of white hair.

I always notice after a haircut that more and more white and grey hairs appear. It’s actually a joke among some of my children, especially when I don’t shave for a few weeks pre-Yom Haatzmaut. Inevitably my oldest son says, Abba you can take some blue coloring and put it on the other side of your face and you will look like the Israeli flag!” Ha ha—just hilarious, another sign that I am getting older.

As I embrace these humorous moments, I’ve also come to appreciate the importance of a solid grooming routine, especially as the years go by. A well-chosen haircut can truly make a difference, and for men, the classic crew cut is always a reliable choice. It not only offers a clean, polished appearance but is also low maintenance, allowing for more time to enjoy life instead of worrying about styling. The crew cut emphasizes facial features and can help draw attention away from those pesky grey hairs that seem to multiply overnight.

Keeping up with regular haircuts and finding a style that suits you can boost confidence, making those little signs of aging feel less daunting. Plus, there’s something refreshing about stepping out of the barbershop with a sharp look, ready to tackle whatever the day has in store!

After a fresh haircut, the discovery of more white and grey hairs can feel like a humorous reminder of the passage of time. It’s a moment to reflect on how hairstyles and the colors within them tell a story of life experiences and stages. The playful banter with loved ones about aging and changing appearances adds a lighthearted touch to the journey of self-care and grooming.

For those looking to embrace different styles effortlessly, especially amidst playful family teasing, exploring options like glueless human hair wigs can offer a fun and versatile way to switch up appearances while maintaining a sense of authenticity and comfort. As time marches on, hairstyles evolve, whether it’s a regular trim at the barber’s or the occasional indulgence in a new look. Additionally, if you have dreadlocks, consider using a loc gel product to maintain healthy hair and prevent breakage. Shop now for an affordable price!

In the book of Leviticus 19:32, we have the command, “You shall rise before a venerable person and you shall respect the elderly, and you shall fear your G-d. I am the Lord.” A few sentences prior to this the Torah speaks of “When you come to the Land (Israel)” and brings laws of Orlah, how many years you need to wait before eating the fruit from the tree you plant.

Explaining the reason for Orlah, an AISH.com article says, “A student of the great Kabbalist, the Arizal, extends this idea by pointing out that Adam only had to wait three hours until the twelfth hour before he could eat from the Tree. This is why Orlah is prohibited for the first three years: Since the first man could not wait three hours, the Torah gives us a lesson in waiting – three years to atone for Adam’s sin of not waiting three hours.”

The article continues, “Rabbi Yissachar Frand adds that immediately following the mitzvah of Orlah, the Torah states, “do not eat on the blood.” The Sages derive a number of mitzvot from these words, one being not to eat from the animal until its blood is completely drained out. Rabbi Frand explains that this mitzvah is addressed to people who do not even have the patience to wait for all the blood to drain out – the Torah tells them to slow down and wait until the proper time. This is the same lesson derived from the Midrash about Orlah – that it is fine to eat fruit, but only at the correct time.

Over the last 2 weeks, I met independently with 2 retirees who are planning on making Aliyah. I want to stress that these were 2 different meetings with 2 people who didn’t know each other. We got to talking and they both mentioned that they have been looking for and identified specific apartments to purchase so that when they arrive, they will already own a place to live. When we started discussing how they were planning on paying for the apartments they both said that they have approximately $2m in a traditional IRA (Individual Retirement Account) and that they would take out approximately $1 million and use that to fund the purchase. Yikes- they both noticed that I made a face and shook my head (those who know me realize that I also must have rolled my eyes but they didn’t mention that!).

They asked me what was wrong. I asked them if they understood how IRAs work and what happens when you take money out of the IRA-called a distribution. I explained that if you have an IRA worth $200,000 and it increases in value to $300,000 you will not pay US tax on the appreciation. But when you take a distribution from the IRA it’s taxed as income. So if you were to withdraw $1m, and it’s treated like income, you can only imagine how much in the way of taxes you would pay—hundreds of thousands of dollars potentially. Needless to say, I burst their apartment purchase bubble. I am not an accountant and am not giving any tax advice. You need to speak with a licensed tax professional in order to understand your specific tax situation both in Israel and the US.

There is a reason they say patience is a virtue. It’s great that they are making Aliyah through Nefesh B’Nefesh this summer. But just like they are planning out their Aliyah the same attention needs to be paid to their financial Aliyah. They need to speak with someone about their finances to make sure they are doing things correctly. Financial mistakes when you are in retirement can be extra costly because not just did you lose money, but since you are no longer working, it’s hard to make up for the money lost.

Slow down and be deliberate before making big financial decisions and make sure you understand all the facts and ramifications of your decision before pulling the trigger.

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 the author of 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, call (02) 624-0995 visit www.aaronkatsman.com or email aaron@lighthousecapital.co.il.