‘Dancing at both weddings’ as an American oleh

A sizable number of U.S. institutions no longer wish to custody or manage investments on behalf of citizens who are no longer resident in the U.S.

By AARON DJANOGLY
January 9, 2019 17:48
2 minute read.
The American and the Israeli national flags can be seen outside the U.S Embassy in Tel Aviv

The American and the Israeli national flags can be seen outside the U.S Embassy in Tel Aviv. (photo credit: AMIR COHEN/REUTERS)

 
X

Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analysis from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later

Olim from the United States are being evicted from their US financial institutions, thus creating a bureaucratic nightmare – and that is even before worrying about their 2018 portfolio returns!

A sizable number of US institutions no longer wish to custody or manage investments on behalf of citizens who are no longer resident in the US. Wells Fargo, Fidelity and Bank of America Merrill Lynch have all written to their clients in the last 18-24 months requesting that clients transfer their assets to other investment houses. Trying to organize this from afar can be stressful and difficult for those affected. Plenty of olim and potential olim from the US are retirees who have invested with the same US institution for a lifetime, making this whole process even more unsettling.

Unlike olim from almost every other jurisdiction, immigrants from the US will continue to report their global income to the IRS and pay taxes. This often entails American olim having a lower focus on the details of their US investments, and it falls below almost everything else on their aliyah priority list. Undoubtedly, the focus on moving assets out of countries like the UK, Australia or South Africa is a big push to ensuring that new immigrants from those countries focus on their finances prior to aliyah. American olim, however, who fail to prepare their portfolios prior to moving here, can lose out significantly as a result.

This occurs for three main reasons. Firstly, it is simply easier from an administrative perspective to open new financial relationships while still based in the US. Secondly, US non-resident taxpayers are taxed differently on certain investments and it is prudent to arrive in Israel without exposure to certain financial products that can lead to punitive tax rates. Thirdly, American mutual funds will not want to continue to serve clients who move abroad and clients may be forced to sell these investments.


For the American oleh, managing their retirement savings should be compared to “dancing at both weddings” – a dollar-based income and a shekel-based household spend. Having some investments denominated in shekels to provide at least some monthly shekel income is also worth considering. This is even more important to consider for those olim who have been here 10 years and now have to declare all their income to the Israeli tax authority anyway.

aaron@piowealth.com

The writer is a senior wealth manager at Pioneer Wealth Management.

Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>

Related Content

A Watergen machine produces clean drinking-quality water from the air
May 20, 2019
Israeli water-from-air company provides services to Uzbekistan orphanage

By TAMAR BEERI