Earlier this week I celebrated the 20th anniversary of my arrival in Israel. I
came straight out of university and landed here with no job, no wife and no real
idea of what it was like to live in Israel. After 20 years I am happy to say
that I have a job, a beautiful wife and five great kids – and no real idea of
what it’s like to live in Israel! Just kidding. While my kids all make fun of my
Hebrew, I have managed to get by and establish my roots here.
also marks the culmination of another incredible summer of aliya brought to us
by Nefesh B’Nefesh. More than 2,500 olim this summer and over 30,000 in a decade
is a huge accomplishment. Along with support from the Jewish Agency, Friends of
the IDF and the Immigrant Absorption Ministry, Nefesh B’Nefesh has managed to
prepare olim for the trials and tribulations of making aliya. From helping them
find employment, a community to live in and a built-in support system, the model
must be working because they are sporting a 90%-plus success rate of olim
staying, while about 50% of my friends and acquaintances from 20 years ago are
still here. Not bad! While they do a great job of preparing olim, from my
experience as a financial adviser, the one issue that gets lost in the aliya
process is how to deal with investments. After all, getting children acclimated
in a new school and learning a new language is more sensitive than whether to
buy of sell shares of IBM.
That being said, if I can give a tip based on
my 20 years of living here and professionally working with olim, it’s to take
care of your finances. I can’t tell you how many veteran olim I have met who
neglected their finances and are now paying the price.
Here are a few
tips that will make your financial aliya a bit easier.
Tip No. 1:
For olim living off their investments abroad, it’s very
important to have some non-US dollar exposure. Shekel strengthening can
adversely impact your revenue stream and even put your aliya in
Let’s look at a real-life example. A few years ago a retired
couple came with $1 million thinking that they needed to generate $40,000 a year
to supplement their pension and Social Security.
In local terms they had
NIS 4 million, and it was little problem to generate the money needed. Then in
the span of six months the shekel strengthened by 20 percent, and all of the
sudden there were issues.
Why? Because in local terms that $1m. was now
worth $800,000 and to generate the money needed became more
The millionaire was able to weather the storm, but the oleh
with $300,000 to $500,000 who suddenly lost 20% of his net worth in a few months
because of currency movement was stuck. Speak to a financial adviser with
experience in these issues to make sure that you are protected.
2: Keep your IRA current
One of the most common issues I see when I meet with
prospective clients is that they haven’t looked at their IRAs (Individual
Retirement Account) or 401ks in years. The thought process is usually that since
this money is for retirement there is no sense in doing anything about it now
anyway and there are more pressing issues at hand. Olim tend to forget about
these accounts altogether, only to wake up in a decade or so to realize that the
value of their account is the same as it was pre-aliya.
Recently at a
wedding I started up a conversation at the smorgasbord with an English speaker.
After some small talk he asked me what I do for a living. I told him that I am a
He then proceeded to fill me in on his financial
situation. (I guess it is customary to give free financial advice while filling
up a plate with roast beef and schnitzel fingers!) He said he made aliya about
14 years ago. He came with a couple hundred thousand dollars, which he
liquidated to buy an apartment. He told me the biggest mistake he made was with
his IRAs. He had one worth about $65,000 and his wife had about $30,000. He said
he basically left them alone and never made any changes. Well, 14 years later
and they are still worth the same amount of money.
I can’t tell you how
many times I have heard similar stories. If you have a long-term savings account
and you never look at it, you are doing yourself a disservice.
it’s tough, but take some time to get your financial aliya in order as well. It
will save you a lot of money down the road.
Good luck and welcome to
Aaron Katsman is a licensed financial
adviser in Israel and the United States who helps people with US investment