Tuesday, 16 January 2018

What You Need to Know about Retirement in Israel

I have had the opportunity to visit a few assisted living residences for seniors. The first detail that stands out is, you have to be really wealthy in order to be a pensioner. Yes the facilities offer services to clean your apartment and they have activities, but the expense is far more than the cost of a basic apartment. What is the lesson here?

Actually there are a few lessons to learn.

1) Needs of Senior Citizens:

When a person reaches retirement age, many needs arise. For those who lack family or social support, living in a residence where various activities are prepared and available becomes appealing. This enables a pensioner to enjoy interacting with people of their own age group. It means that the pensioner can engage in events, groups and activities that meet their needs without having to travel far.

A person who is a pensioner, often has the need for other assistance such as house cleaning, availability of healthcare etc

2) Planning required for Retirement:

Though some may want to remain independent in their own home once they reach their more senior years, it wont be possible for everyone. For those who require moving to an assisted living facility, it is important to know that there are many costs involved. The pensioner will have to pay rent and services. Some packages require paying a hefty deposit upfront and then paying monthly services. This hefty deposit can be NIS 1.5 million. Or, they can pay NIS 50 000 deposit plus rent and services. The types of rent I am hearing of so far range from NIS 5000 - NIS 20 000. 

Quite clearly, these kinds of figures are going to require very nice pension plans. In order to prepare adequately for one's pension one has to earn well during one's younger years. This indicates very clearly that earning minimum wage is not a good idea. It is important to earn a salary that will enable you to plan and prepare for your retirement appropriately.

3) Important Lesson to Glean From These Residences:

Ever since I made Aliyah, people love to say that no-one in Israel has money and hence I can not charge for any services. Now this piece of information does not match up with the residences I am seeing. Let's take a look at this a little further.

If there are residences that are mostly full with seniors able to pay a hefty deposit, plus at least NIS 10 000 a month if not double that, then there are people in Israel earning very nicely. Let's be honest here, this is monthly payment that does not include one's transport, toiletries etc. Also keep in mind, they are not replenishing their bank account. This is coming from their pension or life savings. If someone is paying minimum NIS 10 000 a month, they can not have been earning around NIS 5000 a month. To me I look at this information and learn that there absolutely is money in Israel. So for those wanting to work privately, go ahead and do so. The question now is not there is no-one who can afford private services but rather where are those who can afford to pay.

Personally, we as a greater community here in Israel have a responsibility to reframe our thinking towards earning. The strong habit of pushing Olim into minimum wage is leading to a pattern that will have very damaging consequences. There already is a high level of poverty. What will be when the younger generation who earns only minimum wage reaches retirement? The small amount that Bituach Leumi offers does not even cover a basic rent. It certainly wont enable a pensioner to live in the kind of residences I am finding here.

In summary:
Don't be put off by those who have limited thinking wanting to keep you down by insisting you earn minimum wage and nothing more. Know that there is money in Israel and do your homework to find out how and where you can earn better. Know also that there are lots of opportunities to earn now thanks to the development of technology, especially the internet.

Next, understand that in order to retire you are going to need to have a really good pension. So start planning early on. Don't wait until you reach retirement age and discover you have no pension.

And lastly, if you have an entrepreneurial spirit, don't be put off. Do your market research and make sure to structure your services to those who can afford private rates or to purchase your products if you create products.

In short, knowledge, planning and preparation enable you to put in the effort to create the life that you need and deserve.

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