RETIRING IN ISRAEL
You’ve worked all your life dreaming of retiring in Israel. It’s very important that you have taken the correct financial steps to ensure that you will be able to retire, and that you don’t have to go right back to work. According to a recent survey published in the US about retirement, that much-anticipated phase of life is increasingly proving to be nothing more than a very brief vacation for much of America’s working population. The survey found that seven million previously retired Americans returned to work for pay after a non-working hiatus that averaged only 1.5 years.
The number of working retired is only going to increase in the coming years, and it’s not because people are yearning to get back to work, rather, they need to work out of necessity. While there are many people who reach the age of 65 and find that retirement is not for them, and they would like to stay active and continue to work, the fear of running out of money and not having enough money to fund retirement, is the trigger which is pushing most people to rejoin the workforce. Add to that the recent financial meltdown, and many potential retirees are just plain short of money to retire.
The aforementioned survey showed the main reasons people who return to work after they retire is because they have not saved enough, they do not have an adequate retirement plan in place and they wished they had started saving much earlier on in their lives
Make a Plan
Statistically, Israeli’s and Americans tend to be the worst savers. While both contribute monthly to the various types of pension plans, they do little to put any other money aside, in order to supplement their retirement income. It’s important to take out some time and calculate how much money is spent each month (on each and every expense, even the occasional bottle of Coke Zero) and how much comes in. While this seems elementary, you’ll be surprised to see how much you spend, and to what things you spend the money on. Once you know what your income will be, figure in your expenses. If you will bring in 8,000NIS and you spend 12,000NIS a month, you will need to start a saving plan of your own in order to make up that shortfall.
Speak with a Financial Advisor
A professional will be able to do a financial plan for you can help you determine how much needs to be saved, monthly/annually, at what rate of interest, in order to help you make up that shortfall. When creating the long-term plan with your advisor, it’s important to also take into account future expenses. For example, the purchase of a car in 5 years, marrying off children in 8,10, and 12 years, is all relevant information necessary for the advisor to give you an accurate picture of what you need to do in order for you to be able to meet these future expenses.
Start Young
If you are young, don’t procrastinate and say that you will deal with retirement issues when you reach the age of 50. The more time you delay the worse off you will be. Because of compounding interest, each year that you put off saving for retirement can cost you 1-5 years of retirement income. The younger you are, the less expenses you will have and you should make a concerted effort to save as much as possible. It’s never fun of thinking what will be when we get older, and we are programmed not to even think about that far ahead in the future. But if you want to buck the emerging trend and actually retire for good, and not have to go back to work, it’s imperative that you make a plan and start saving immediately.
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 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. a registered broker dealer, Member FINRA, SIPC, MSRB, NFA, SIFMA. For more information, call (02) 624-0995 or email aaron@lighthousecapital.co.il.
