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Retiring in Israel

July 14, 2023 941 Time to read: 18 min.

If your immediate plans include retirement, take a closer look at Israel. The country is beautiful for its nature, climate, ecology, as well as the attitude towards pensioners. If you are interested in moving — here’s what you need to know to retire in Israel.

Retirement in Israel in 2024

The Israeli government is taking many steps to improve the comfort of living for pensioners in the country. For example, individuals aged 60 and over may be eligible for a ten-year tax exemption on foreign income. Additionally, foreign pension income is often tax-exempt, making it an attractive option for retirees looking to maximize their retirement savings.

  • The current retirement age for men is 67.
  • The retirement age for women is 60 to 65, depending on date of birth.

Israel has one of the highest levels of healthcare. Pensioners here receive decent medical care. In addition, the local climate and quality products provide people with a healthy and long life.

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    What the amount of payments depends on:

    • the age of the pensioner;
    • length of service;

    • the position held and qualifications;
    • the amount of contributions to pension, insurance and reserve funds.

    Types of pension payments

    Pensioners’ income comes from two sources:

    • Old-age benefits;

    • The cumulative part.

    The Israeli government provides pension benefits to all pensioners, not just the citizen.

    If a person was born and lived in the Middle East or moved to Israel before the age of 60 and worked there, benefits will be paid to him by the National Insurance Institute (Bituach Leumi). This means that the citizen can expect to receive additional payments and increase his or her pension several times over.

    For all other categories of citizens, the Ministry of Finance pays the benefit. It no longer provides any benefits or additional payments.

    pensioners in Israel

    The amount of the funded part of the pension depends on the work experience of the person. Important note: work experience is counted only with official employment. Throughout the entire work experience, a person pays interest to the pension fund, which subsequently provides him with a high pension.

    Under the old laws, a person could receive the entire pension payment in one lump sum. Now this amount is divided into regular monthly payments. If a person dies before receiving the full amount of pension payments, this money goes to his heirs. If the accumulated funds run out, the pensioner must apply to Bituach Leumi for additional payments.

    If a pensioner receives only social assistance, he cannot leave the country for more than two months. Otherwise, payments stop.

    Aliyah

    Aliyah is a term of Hebrew origin that initially meant “climbing” or “ascending”. However, in contemporary usage, it refers to the process of relocating to Israel and obtaining Israeli nationality, formalized through the Law of Return passed in 1948. The Aliyah process is exclusively for those of the Jewish faith, and those who undergo this process are referred to as “olim” (plural) or “oleh” (singular). Despite various resources available to facilitate this process, making aliyah can be somewhat challenging.

    To start the repatriation process, you must submit an application. It is necessary to prepare a package of documents consisting of a passport, birth certificate, confirmation of Judaism, a letter with your reasons for moving, and, in some cases, you will need a letter of recommendation. After submitting your application, you will be invited to an interview with a representative of the Jewish Agency for Israel, known as Shaliach. If your application is approved, the Israeli government will notify you of your aliyah status.

    Benefits of a pension

    After obtaining repatriation approval, new residents of Israel receive a huge list of rights to benefits, including financial and cultural assistance from the state. The Israeli government is taking many actions to help and support new immigrants. New residents can qualify for reduced taxes, low mortgage rates and subsidized rent after living in Israel for 8 months. In addition, new repatriates are waiting for a number of other benefits.

    The Aliyah process also provides social support by connecting new immigrants with their fellow travelers embarking on the Aliyah journey together. In some instances, private Aliyah companies can even arrange group flights for immigrants, creating an instant community and easing the transition for those without family or friends in Israel.

    Retired Israelis receive the following benefits:

    • 50% of the cost of public transportation is paid by the state;
    • 50% discount on visits to museums, exhibitions and theaters;
    • 50% discount on flights on Israeli airlines;

    • Reimbursement of the cost of medical insurance;
    • Municipal tax exemption or reduction;
    • Benefits for electricity, medicines and TV channels;
    • Benefits for various banking services.

    Most of these benefits do not require any extra steps: they are granted automatically upon reaching retirement age.

    Healthcare in Israel

    One of the most important benefits of moving to Israel for retirement is the high level of health care. Local hospitals use advanced technology, and the training of doctors and their level of qualification reach the highest level of professionalism. At the same time, the cost of health insurance can be very high. It is important to choose the right insurance option, which will include all the necessary services, but will cost adequate money.

    Israel’s public healthcare insurance system is managed by the National Insurance Institute, also known as Bituach Leumi. Bituach Leumi offers coverage to all applicants, irrespective of pre-existing health conditions. As a newcomer, you are not required to pay towards the national insurance scheme for the initial 12 months.

    There is a list of private insurance companies in Israel, but as a rule they do not provide services to people over 65 years of age or people with serious illnesses.

    In Israel, there are private insurance companies as well, but they typically do not accept applicants with existing health conditions or those aged above 65 years. Depending on your current insurance coverage in the US, you may retain it temporarily until you find a suitable healthcare insurance option in Israel.

    Financial Planning and Budgeting

    One of the important steps for a successful and carefree move is to plan your budget and your financial situation in advance. Objectively assess your financial situation and draw up an approximate spending plan for the next.

    Pensions:

    Olim who arrive in the country over the age of 60 are generally not eligible for Israel’s standard state pension. But they are entitled to an old-age benefit.

    When immigrating to Israel from the USA and qualifying for social security benefits, it is typically possible to continue receiving these benefits while residing in Israel. However, there are certain limitations for those aged between 62 and full retirement age, which varies between 65 and 66 years old depending on their birth year. Specifically, if they are currently receiving social security benefits and residing in Israel, they can only work for up to 45 hours per month. In cases where they are working, the social security system may not pay benefits until they either cease working or reach full retirement age.

    If you are making aliyah from Canada, it is important to speak directly with an accountant and determine the best way to ensure that you continue to receive your pension after making aliyah.

    If you are making aliyah from the UK, the state pension can be paid directly to you in Israel in shekels. This is probably the most convenient way to receive your pension. The money will be exchanged at the bank rate, not the tourist rate. In addition, if you move to uncontested geographical areas (such as Tel Aviv), you will be entitled to an annual inflation increase. As for the non-state pensions, you will need to contact the program administrator to confirm that they will be paid directly to Israel.

    Amount of pension payments

    The amount of the old-age allowance in Israel is determined by the National Insurance Institute (Bituach Leumi). As of January 1, 2024, the rates are as follows:

    • For a married couple, the amount of assistance is formed according to the following scheme: an allowance for one spouse and a supplement for the second spouse in the amount of NIS 845.

    • For a married couple, the child allowance is only paid to one spouse at NIS 532 per child.
    • Only 2 children are eligible for the premium.

    caring for pensioners

    The spousal supplement is payable if he or she does not receive assistance from Bituach Leumi.

    Additional increase in pension payments

    Sometimes circumstances develop in such a way that the pensioner was not able to gain seniority. This may be the result of health problems, the inability to go to work, or a simple lack of desire to go to work. If in this case the pension payment is less than the declared subsistence level, the pensioner may qualify for additional state assistance.

    Here is a precise list of requirements for citizens who may qualify for benefits:

    • Have an income of no more than NIS 3,200 per single or NIS 5,100 per married couple;
    • Do not receive other social benefits;
    • No car more expensive than NIS 40,000;

    Average Cost of Retirement in Israel: What You Need to Know

    The cost of retirement in Israel is lower than in the U.S., with Tel Aviv being approximately 33% cheaper than New York City according to Numbeo. A family of four can expect monthly costs of around $5,560, while a single person can expect monthly costs of $3,150. The average cost of a 900-square-foot furnished apartment is between $2,100 and $2,500 per month.

    To increase pension payments, a pensioner has the right to apply for help from the State of Israel. In this case, the state can offer subsidies for rental housing, preferential mortgages. Financial assistance with repatriation, including flights, can be provided by the Israeli Ministry of Immigration and Absorption.

    Retirees eligible for Social Security benefits in the U.S. can continue to receive them while living in Israel, which can be a significant advantage since the Israeli government pension is generally not available to retirees over the age of 60. However, retirees who retire in Israel before reaching their full retirement age cannot work for more than 45 hours per month.

    How to save for your retirement

    It is better to think about a comfortable retirement in advance. To do this, you need to understand what kind of lifestyle you are going to lead in retirement and, based on this, calculate the approximate amount of necessary savings. Having decided on the approximate number, it will be easier for you to follow the set plan.

    If you’ve had a full-time career in the U.S., you’re probably eligible for some kind of Social Security benefit. Also, you may have some retirement income in retirement if you are a government employee or teacher. You will still have to save up to supplement that income. The most popular options for this are an individual retirement account (IRA) or a 401(k) plan. Note that you can only access a 401 (k) plan if your employer offers one.

    It is recommended to start thinking about retirement in advance. By saving over the course of your career, you can secure a carefree retirement.

    Tips for saving for retirement

    Saving for retirement is an important part of financial planning for your sustainable future. When you retire, you want to spend time carefree, not saving money on every little thing. We’ve put together a few tips to help you successfully build capital for a well-deserved retirement.

    Think about retirement early. Start planning your financial condition right now. The sooner you start saving, the more your retirement income will be. If at the moment you do not have the opportunity to save a large amount, it’s okay. Even a small amount set aside will make a huge difference in the future.
    1. Analyze your budget. Identify areas of spending where you can save now. Put that money into a pension fund.
    2. Try to contribute the maximum amount to the pension plan offered by the employer. So in the future you will have a bigger budget.
    3. Use smart investments. Investing in stocks and bonds will be a great helper in saving money for retirement.
    4. Don’t forget to pay off your debts. Debt holes can completely destroy your retirement budget. Take care of payments in advance.
    5. By following these simple yet important tips, you can secure a decent and serene retirement full of great travel and comfort.

    How to retire in israel if you are a us citizen

    For a US citizen, retiring to Israel will be a great way to change the environment, diversify your life and enjoy a good climate and a high standard of living.

    Prepare for the move by collecting the necessary documents. First of all, get a visa. You can stay in Israel for 90 days without a visa, to stay in the country you will need an A5 visa, which has the possibility of an annual extension.

    Choose the city that suits you. Israel has many pleasant cities with developed infrastructure. Choose a place closer to the sea or in the center of city life. Choose a place based on the planned lifestyle.

    Learn Hebrew: Although many Israelis speak English, learning Hebrew will make your daily life easier, interacting with the locals, and fully immersing yourself in Israeli culture.

    Ensure your financial security. Take care of planning your retirement expenses in advance. Perhaps the best solution would be to hire a professional financial advisor who can advise you on how best to allocate funds in your individual case.

    Don’t worry about adaptation. In Israel, you can easily join the local society. There are many small cozy communities that are happy to accept new friends. In Israel, you will not feel lonely. The atmosphere here is comfortable, safe and friendly.

    How to retire in israel if you are a uk citizen

    If you have British citizenship but want to retire in sunny Israel, you have the opportunity to do so! In Israel, you will find a rich cultural environment, an excellent level of ecology, as well as a sea coast and a high level of medicine.

    Prepare documents. Without a visa, you can stay in Israel for 90 days. It is best to get a residence permit. When you retire to Israel, you will be issued a residence permit for a period of 3 years, and then you can renew it.

    Israeli medicine. The level of healthcare here is excellent. Many people of different ages strive to come to Israel to receive quality services. Pensioners are provided with the highest quality medical care.

    Cost of living. Spending in Israel may be more than you are used to spending in the UK. However, while in Israel, you can receive a British pension without taxing it. Also, an assistant in reducing costs will be owning your own real estate in Israel.

    Cultural adaptation. Many Israelis understand and speak English. However, it does not hurt you to take Hebrew courses offered by government programs. This will make it easier for you to integrate into the local community.

    Climatic conditions. This is one of the biggest pros that attracts people to move to Israel. There are many sunny days in the country, there are several seas around, many clean beaches. The country has good ecology and at the same time developed infrastructure.

    For a British resident, retiring to Israel can be a great opportunity to diversify your life. And competent financial planning will allow you to enjoy life without worries.

    How to retire in israel if you are a canada citizen

    If you are a Canadian citizen but want to spend your retirement years in Israel, you have the opportunity. It is necessary to think over the details of this process in advance and take care of all the steps.

    Choose health insurance. You must have a medical plan to move to Israel. If your age is over 65, you can qualify for free health insurance in Israel.

    You need to obtain a suitable visa. For such a purpose, a long-term visa is required. Without a visa, a Canadian citizen can stay in Israel for only 3 months. Most likely, obtaining a visa will not be difficult. However, you need to study the necessary information and take care of this step in advance.

    Study the information and choose the most suitable city of residence for you. There are many resort towns in Israel, for those pensioners who appreciate a calm and measured lifestyle, and there are also cities with a faster pace of life.

    Take care of your financial situation in advance. Familiarize yourself with the Israeli tax system and prepare a financial airbag so you don’t have to worry about the money issue.

    Adapt to the country. The Israeli government is taking many steps to easily accommodate new residents. You have the opportunity to learn the language and easily integrate into society.

    Get a free consultation from
    an Israeli citizenship specialist

      Retirement communities in israel

      Israel has created a comfortable environment for a full life of pensioners. The government of the country creates all the necessary conditions for every pensioner to live a happy life in retirement.

      In Israel, pensioners most often lead an active and healthy lifestyle. They attend fitness centers, yoga classes, regularly sunbathe and enjoy swimming. The state organizes many cultural events for pensioners.

      Here pensioners do not feel lonely. The country has an actively developed community of pensioners. Even in adulthood, people find new friends, friends with interests, and also find new hobbies. This is also due to special cultural and social programs.

      In Israel, a fund for social assistance to pensioners is actively developed. Social workers can help with everyday tasks and make life easier for retirees. A social worker helps with food preparation, household chores and moving around. Of course, there are many options for medical care and physical therapy for retirees.

      The Israeli government pays attention to each pensioner in particular. Even if a person’s life has developed in such a way that he could not work and could not receive sufficient payments in the future, the state provides financial and social assistance. Those pensioners who have been able to accumulate sufficient work experience will enjoy a carefree and comfortable retirement.

      Since in Israel, along with good social benefits, there are high prices for living, it is better to take care of savings in advance or purchase your own housing in advance, since renting an apartment in the country is quite expensive. However, pensioners are offered many benefits to help cope with the price level.

      For pensioners in Israel there is a huge list of social benefits. This includes free medical care, which is at a very high level.

      In Israel, the life of pensioners continues to develop and be vibrant. Someone decides to continue working while in excellent health, and someone learns languages or decides to go in for sports and fitness. Moving to Israel for a happy retirement is an important and wonderful step to think about now.

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      an Israeli citizenship specialist

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