Perhaps you’ve worked all your life while dreaming of spending your retirement years Israel, relaxing and enjoying the fruits of your labors. Careful planning can prevent a rude awakening from that dream once you have retired.

It is vitally important to take financial steps to ensure that you actually will be able to retire without having to go back to work. According to a recent survey published in the USA, that much-anticipated phase of life is proving to be a very brief vacation for much of America’s working

Seven million retired Americans returned to work for pay after a non-working hiatus that averaged only 1.5 years.

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 yearn to get back to work. They do so out of necessity. Of course, there are people who reach the age of 65, find that retirement is not for them and continue to work.  However, the fear of running out of money or not having enough money to fund retirement to begin with, is the trigger that pushes most people back to the workforce. Add the recent financial meltdown, and you have many potential retirees who are simply short of money.

The aforementioned survey showed that the main reasons people return to work after they retire are not having saved enough and not having an adequate retirement plan in place. Many expressed the wish that they had started saving earlier in their lives. 



Statistically, Israelis and Americans tend to be the worst savers. While both groups deduct from their monthly salaries for various pension plans, they do little to put any other money aside to supplement their retirement income.

It’s a good idea to take the time to calculate how much money you spend each month (on each and every expense, even the occasional bottle of Coke Zero) and how much money comes in. You’ll be surprised to see how much you spend, and what things you spend your money on.  Subtract expenses that won’t exist once you retire, if any. If you have friends who have retired in Israel, ask them to tell you the living expenses that cost more than they do in the USA. 

Then find out what your income will be when you retire, so that you can see how much you will be missing. For example, if you will receive 8,000NIS monthly, but spend an average of 12,000NIS a month, you should start a saving plan of your own in order to provide for that future shortfall.

A professional will be able to do a financial plan for you can help you determine how much needs

Don’t procrastinate and say that you will deal with retirement issues when you reach the age of 50.

 to be saved, monthly/annually, at what rate of interest, by the time you retire  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 and save as well.

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 unavoidable expenses you have, even if it doesn’t seem that way. You should make a concerted effort to save as much as possible from as early on as possible.

It’s no fun thinking about what will happen when you get older. However, if you want to buck the emerging trend and actually retire for good, without having to go back to work, it’s imperative that you make a plan and start saving immediately.

Israel has neighborhoods populated by many retired Anglo Saxons who lead an active social life and enjoy varied cultural activities, so retiring in Israel can be wonderful if you plan ahead.

(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.Email: aaron@lighthousecapital.co.il. )