Pension (as well as mortgage) is a daunting word that, when heard, the initial tendency is

"Change the subject or talk about something else. We tell ourselves stories like "we'll cross that bridge when we come to it," "go with the flow," "we'll survive," etc. That won't work. A much more fitting saying is "one who prepared on Friday evening will eat on Saturday.' In this case, Friday evening spans decades, and Saturday is also long. Regardless of your age, you should increase your knowledge and actions regarding retirement.

This article was written by The pic who serves as a senior mortgage consultant at Mishkanta Efektiva and as a consultant for financial management and growth towards retirement and in general. 

Every age is suitable for preparing for retirement (assuming you haven't retired yet, of course). Not only is it suitable, but you absolutely must prepare financially for the retirement period. How much will you receive from all your income sources combined? Is it enough for you to live with dignity? And maybe even travel the world a bit, buy gifts for grandchildren, help children... And what if you get sick – you'll need to buy medication too. And God forbid, long-term care.

It is important to plan in advance the monthly amount you can expect in retirement. The sooner you check it, the better you can prepare and take action so you won't be in financial distress after you retire.

In this article, I will briefly review the three sources of income for retirement. They are also called the three tiers (of economic protection):

1. Social Security
2. Pension fund retirement – pension fund and/or manager's insurance
3. Passive income that you have created for yourselves

On the allowance you will receive fromSocial Security You are not in control. Some believe Social Security will collapse by the time most of you reach retirement age. Indeed, Social Security is facing enormous deficits, but personally, I find it hard to believe the state would let it collapse and not pay out benefits. It should be remembered that in any case, it's not a high pension, and it's very likely it won't be enough for a reasonable living.

Regarding Passive income – These can include, for example, rent from an investment property you own, or a savings plan that pays out an annuity, etc. Liquid savings you have can be converted into an annuity, if necessary. There is also a reverse mortgage mechanism for your primary residence. These solutions can serve as a supplementary sum to the main pension bracket for most of you.

The main category for most of the population is provision number 2 – pension savings.

Pension savings

So what is your retirement savings made up of?

1. Pension fund
2. Executive Insurance
3. Provident fund

If we are employees, a significant amount (benefits and severance) is deducted from us each month for one or more of these products.

Let's briefly expand on each of them:

Pension fund

The pension fund has binding bylaws, which may change over time. Funds are accumulated in the fund and generate returns, with a portion of the amount earning a return guaranteed by the state (currently, the guaranteed return stands at 4.85% on approximately 30% of contributions, which is a lot!)—this is a unique advantage found only in the comprehensive pension fund. This advantage is particularly evident in a low-interest-rate environment such as the one that has prevailed over the past ten years.

At retirement age (currently 67 for men and 62 for women), "The coefficient"You take the sum you've accumulated and divide it by the coefficient – and that's the amount of the monthly allowance you'll receive for the rest of your life. For example, if you've accumulated one million shekels, and the coefficient is 200, you'll receive 5,000 shekels each month (1 million divided by 200). The coefficient is determined by the projected number of months you'll live after retiring. For example, if someone retires at age 67 with a coefficient of 200, it means the pension fund estimates it will need to pay them for 200/12, approximately 17 years, according to the average life expectancy on the day of retirement.

The pension fund has mutual guarantees among its members. This means that if the fund paid out "too much" money to its members, it may take money back from them in order to remain balanced. This is called Actuarial balance. Sometimes the pension fund pays out less than it estimated, and then it returns money to its insured members as part of that actuarial balancing. The Ministry of Finance has been working vigorously in recent years to significantly reduce the need for an actuarial balancing mechanism (e.g., by changing the percentage of bonds with guaranteed returns, reducing insurance costs, etc.), so it is very possible that in the coming years this figure will no longer be relevant at all.

The pension fund also has insurance. In addition to paying a pension after retirement, the pension fund also includes Survivor insurance (The surviving spouse and children under 21 will receive a monthly pension in case of your death before retirement age) And disability insurance (which is effectively disability insurance).

The pension fund has seven tracks, which differ from each other in the amount of payment to survivors and the amount of disability insurance. It is very important to choose the track that suits you at every stage of life. For example, if you do not have a spouse and you do not have children under the age of 21 (in other words, you have no survivors), then there is no need to pay for survivor insurance. Cancel it immediately! Don't forget to go back and cancel this insurance every two years if you still don't have survivors. Why every two years? Just because. Because after two years the cancellation is automatically canceled and you will start paying for survivor insurance again. The logic is that it is better for many people to pay insurance for free than for one child whose father dies and it turns out he is uninsured and will therefore grow up without survivor benefits. However, you really don't need to be the ones paying for insurance on a car you haven't even bought.

It is important to check the management fees your fund charges and the returns it achieves over time. The website Pension-Net This is exactly where you can see the return each fund has achieved and its average management fees.

The maximum management fees a pension fund can charge you are 0.61% of your contributions (i.e., of every monthly payment you or your employer makes to the fund) and 0.51% of your accumulated balance (i.e., of the amount you’ve accumulated in the fund). But that doesn’t have to be the management fees you actually pay. For example, in the Halman-Aldubi default fund, you pay 1.491% on contributions and 0.051% of the accumulated balance. These are reasonable management fees that you can definitely achieve.

Executive Insurance

In manager's insurance, the insured has a personal and binding contract (which cannot be changed) with the insurance company. There is no actuarial balance, but there is also no guaranteed return. There used to be a guaranteed coefficient as well (in old policies from before 2013).

Manager's insurance is generally more expensive than a pension fund., and it is very profitable for the insurance company and the insurance agent. Therefore, the main marketing efforts of insurance companies and your agent will be directed towards management insurance. This is, of course, often contrary to your interests.

The maximum management fees that executive insurance plans can charge you are 4.1% of your contributions and 1.051% of your accumulated balance. That’s much more than you’d pay with pension funds. And what do these management fees mean? It means you’ll receive a lower monthly pension. How much less? It could amount to hundreds or even thousands of shekels a month!

Managerial insurance may include both a life insurance component and a disability insurance component. Of course, the insurance components are not free – you pay for them, and much more than for a pension fund.

Basically, disability insurance for executive insurance has an advantage over the equivalent insurance in a pension fund because it is professional and not general (meaning, if you cannot work in your profession but can work in something else, you will receive an annuity from the executive insurance but not from the pension fund).

Here too, as I explained about the pension fund, the coefficient is determined towards your retirement (unless you have a guaranteed coefficient in old policies, in which case you're lucky).

Provident fund

There is no insurance component, no actuarial balance, and no guaranteed return. You simply deposit and accumulate returns.

This product can be used for pension contributions above the contribution limit (the contribution limit for a comprehensive pension fund with a guaranteed return is 20.51% of twice the average national wage, which was 4,061 NIS in 2018. In other words, a monthly salary of approximately 20,000 NIS). If you earn more than 20,000 NIS per month (gross, of course)—check where the payments exceeding the cap are being allocated. To a supplementary pension fund? To executive insurance? To a provident fund? This article is too brief to recommend what to do, but many believe there may be an advantage in contributing amounts above the ceiling to a provident fund. Of course, this recommendation varies from person to person based on their individual circumstances.

It is very important to track returns and management fees, and as mentioned, compare them to similar products using the website Camel-net. If it's not the best, then just move on.

Recommendation for closing: Do yourselves a personal favor – never withdraw your severance pay (even if it's tax-exempt, unless you're starving for bread!). You can't even imagine how much it could hurt you in retirement and the taxes you'll pay on it in the future.

So far, this is a brief overview of your retirement savings. It's important to emphasize that this is a general explanation only and does not cover all types of policies and funds available, but it does give you a pretty good idea of them.

How to save 1,000 NIS per month on phone calls

The importance we give to each of these topics is usually the reverse of their impact on our lives. For example, with a pension fund, management fees will take from our monthly allowance. Over a thousand shekels every month.

Let's say, for example, someone has accumulated one million shekels in their pension fund and they are paying the maximum management fees on the accumulation.
At 0.51% of the total savings. That amounts to 1 million * 0.51% = 5,000 shekels per year, or 417 shekels per month.
In addition, that person continues to deposit 2,500 every month and will pay a maximum fee of 6% * 2,500 = 150 shekels
And together, 567 shekels per month (and the amount keeps going up).

These 500 shekels that went to management fees instead of accruing to your pension will reduce your allowance by thousands of shekels per month.
For each month from age 67 until your death and the death of your spouse (up to 120).
The problem is, of course, particularly acute among low-income workers, who find it much harder to negotiate management fees or even to understand what they are.

The outgoing Supervisor of Insurance and Capital Markets, Ms. Dorit Salinger, created a mechanism that eliminates the need to negotiate management fees.
With the pension funds. Instead, the state created a tender among the pension funds. The two companies that offered the lowest management fees.

Won the tender And every employee is entitled to join them and benefit conditions that were previously reserved for the Electric Company, Israel Aerospace Industries, or other strong entities that could negotiate with pension funds on behalf of their employees.

What is the lowest management fee you can get?

• At Halman Aldubi and Altshuler Shaham, you will pay 0.11% of the accumulated balance and 1.491% of deposits. (After the tender closed, Halman Aldubi announced that it would cut the fees on the accumulated balance in half to 0.051%).
• Meitav Dash – 0.05% from the accumulation and 2.49% from the deposit
• Peaks – 0.0905% from the accumulation and 1.68% from the deposit.
This is an addition to the income of approximately 1000 shekels for a pensioner who had an average income. Of course, the higher the income, the greater the increase in the pension.

I highly recommend looking into one of the funds listed above.

You can quibble about returns and so on, but the sad fact is that even after Best Dov began charging reduced management fees to those who joined their default fund, many people remained with them in the regular fund with the high management fees, even though it's the same investment manager with the same return.

השאלה בכותרת חוזרת על עצמה פעמים רבות. במקומות שונים באינטרנט אפשר לשמוע תשובות שונות. לפני הכל חשוב לומר שאין תשובה אחת המתאימה לכולם. בסרטון שלמטה אשר נלקח מהרצאה שלי ליועצי משכנתאות נתתי את שני הצדדים של מטבע זה ואני מקווה שזה יעזור לכם לקבל החלטה.

The overarching goal of the website is to improve your financial well-being. One of the biggest expenses for a family is housing, and I specialize in assisting with real estate decisions, such as mortgages.

However, sometimes there are other very important issues that I am happy to report on in order to bring about well-being.

This is the pension insurance agent reform. Dorit Salinger, the Capital Markets, Insurance and Savings Authority commissioner at the Ministry of Finance, has approved the pension insurance agent reform. Ms. Salinger is part of the "female power" that Yair Lapid appointed to head almost all of Israel's economic leadership. Unlike in the past when regulators grew within the Ministry of Finance and then looked for high-paying jobs in insurance companies, Ms. Salinger came to the Ministry of Finance after building her career in the business sector.

After years in which every employee could choose which insurance company and insurance product they wanted to save for retirement with, under the current reform, the employee will also be able to choose who their insurance agent will be.

Optin Architect

As strange as it may sound, until today, the employee was tied to the insurance agent determined by the employer. Let's assume there's a small employer with 50 employees (the exact same principle applies to an employer with 500 or 5,000 employees). The employer could transfer one sum per month to the insurance agent they worked with. The insurance agent provided the employer with a "free" service and split the payments to the various pension funds and manager insurance policies of the employees. The problem?

1. There are no free lunches in life. The employer did not spend money out of their own pocket, and the employees paid for the insurance agent's service through the management fees on their pensions, which were split between the insurance agent and the insurance company.
2. Free is no longer enough, so to entice employers to work with a particular agent, the agents could offer additional benefits, such as a discount on the company's car insurance or on the company's office building. You already know who paid for these benefits to the employer.
3. Not all insurance agents work with all insurance companies. Each insurance agent chooses companies with which they will work based on the commission they receive from them for new policyholders. When an insurance company chooses to charge low management fees for a particular product, you can be sure that these specific products will not be offered to clients by the employer's insurance agent.
4. The large insurance agencies that the brokers like are often fully or partially owned by one insurance company or another. The insurance agent is also the employee's advisor on insurance matters. As readers of this blog, you already know what advice from someone who earns more the more they sell is worth.
5. The obligation to pay a commission to the insurance agent has, as stated, caused management fees to be higher. As a self-employed individual, I owe nothing to anyone, and therefore insurance companies offered me exceptionally low management fees on condition that I transfer funds directly to them and not through an insurance agent. Until today, employees were bound, and from now on they will be able to act like me and set up monthly payments directly to the insurance company and thus save on brokerage fees.

Things aren't all roses yet.

The discussed reform affects the cost of living much more than a thousand Milky Cups. However, management fees are a type of hidden cost, and therefore there are no demonstrations or protests because of them. The change currently being discussed was supposed to take effect in 2013 and it did not happen because of the elections.

The reform has passed the Ministerial Committee for Legislation in preparation for the Arrangements Law, which is part of the budget discussions. The reform has not yet been approved by the Knesset, but already many powerful voices of insurance company CEOs are being heard, announcing that employees will be harmed by the move. I remember exactly the same voices from the CEOs of cellular companies who claimed a few years ago that customer service would be severely damaged if competition were introduced into the market dominated by the PCS companies (Orange, Pelephone, and Cellcom). Does anyone remember that we paid 300 shekels a month for a line plus a "free' device and in return for the right to service centers where at any time you could come and hear customers shouting that they were cheated and that the five-page bill was not what they were promised? Personally, I am happy that this "service" was hurt.

I hope the Knesset approves this important reform. I will follow.

This week, the Treasury published two decisions that will allow you to save A lot Money.

Both decisions concern promotions that were published in the past and unfortunately did not receive a public response despite their advantages:

1. Eligibility mortgage refinancing campaign

Eligibility loans are loans that were granted in the past at an interest rate indexed to the CPI plus 3%-4% (depending on the year). These interest rates were low at the time, but today they are nearly double the market rate. The Ministry of Finance has instructed the banks to contact all customers and offer to refinance these loans into cheaper loans. Using one meeting at your branch. The fact that so few customers have taken advantage of this option is a subject for extensive social research, in my opinion.

Bank of Israel has now announced that it is extending the validity of the operation by three months. If you have such a loan, please repay it. I'm sure you have better things to do with the money than pay it to the bank. Click here for more details about the offer

2. Withdrawal of funds from pension funds without tax liability (up to NIS 7,000 from each fund) –

Many of us have significant funds accumulated in provident funds, study funds, and various pension funds. In the past, every workplace would contribute to a fund chosen by the employer. In other words, the employer would select a fund based on the benefits offered. that he should be credited towards employee management fees. Additionally, there are parents who have deposited funds for their children in provident funds. In practice, there are individuals with funds scattered in various places without their knowledge. This is convenient for the study fund/provident fund because when the client is unaware of the funds they possess, they do not pay attention to management fees and do not withdraw these funds.

The beginning of wisdom is for everyone to know All the places in which they may have money. For this purpose, the Treasury has opened a website through which it is possible to obtain a report containing a list of all entities holding money belonging to a specific person (identity number). Website address for locating funds: https://itur.mof.gov.il/After that lengthy introduction, let’s get down to business. For provident funds, the maximum management fees are approximately 11% per year. When there is little money in a fund under a specific saver’s name, these management fees do not cover the costs, according to the insurance companies that manage the provident funds.

The Treasury took two steps:

A. Approved a minimum monthly fee of 6 shekels for provident funds, instead of 11 shekels per year.

b. Allow savers with less than 7,000 NIS to withdraw these funds in the next three months without paying taxes.

You can look at it this way: if you have less than 7,000 shekels in your provident fund, that money won’t make it to retirement anyway. You can now choose whether to withdraw it and use it as you wish, or leave it in the provident fund and let the fund gradually erode it through monthly management fees until all your savings are depleted. Which do you prefer? It seems like an easy decision to make, but the Ministry of Finance was disappointed to discover that only 12% of these funds (300 million out of 2.5 billion shekels) had been withdrawn. Therefore, an extension was granted for making the withdrawals. Don't wait until the last minute. The foundations are not enthusiastic about releasing 2.5 billion shekels and do not make the process easy. What a shame!

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Optin Architect

מראש השנה דרך יום הכיפורים ועד לסוכות, תחילת השנה היהודית שהיא גם תחילת השנה הכלכלית של העולם הקדום (תחילת המחזור של זריעה-גשם, גידול, קציר) כוללת מספר חגים אשר מאפשרים לנו זמן מחשבות וחשבון נפש אישי ואם תרצו אז גם כלכלי. באופן טבעי מאמר זה יעסוק בחשבון נפש כלכלי.

Mortgage refinancing

יש לכם משכנתא בת יותר מארבע שנים? קרוב לודאי שאתם יכולים לחסוך המון המון כסף. לפעמים ברמה של מאות אלפי שקלים. לשם כך, תוכלו לפעול בשתי צורות: לרכוש ידע בנושא משכנתאות ולהתמודד לבד מול הבנק לצורך מיחזור המשכנתא. לפנות למומחה משכנתאות אשר יבצע את המיחזור עבורכם תמורת תשלום. מה אסור לעשות? לשאול את פקיד הבנק האם כדאי למחזר. דבר זה שקול לשאלה של נציג שימור לקוחות של הוט האם כדאי לעבור ללוויין. בתחתית מאמר זה ישנה הצעה עסקית בנושא מיחזור משכנתא. 

קרן השתלמות

  התקשרו מייד לאחר החג לקרן ההשתלמות שלכם. אם אינכם יודעים את המספר, בררו באינטרנט לאחר שתבדקו בתלוש השכר שלכם לאיזו קרן אתם מפקידים כסף. בדקו מהם דמי הניהול שאתם משלמים. אם לא עשיתם זאת עד היום אף פעם, כנראה שאתם משלמים דמי ניהול גבוהים בהרבה ממה שתוכלו לשלם לאחר שיחות טלפון בודדות.Fund

Pension / Executive Insurance

כמו בנושא קרן ההשלמות אך ההפסד מאי התמקחות על העמלות גדול בהרבה. נניח חוסך לקרן פנסיה שמתקשר פעם ראשונה כדי לברר את דמי הניהול שלו. פקידה חביבה אומרת לו 0.5% מהצבירה ו- 6% מההפקדה ומוסיפה את השקר המקובל: "על פי הנחיות האוצר". האוצר כמובן לא הנחה מעולם את קרנות הפנסיה לגבות תשלומים גבוהים אלו. לעומת זאת האוצר אסר על קרנות הפנסיה לגבות תשלומים גבוהים יותר. נניח עובד שמפקיד כל חודש 2500 שקלים לקרן הפנסיה (הפקדת מעביד+הפקדת עובד). אותו עובד צבר כבר 400,000 שקלים בקרן הפנסיה. לפיכך בכל חודש הוא ישלם 6%*2500 = 150 שקלים וכן חצי אחוז * 400,000 = 2000 שקלים לשנה. כלומר בסך הכל ישלם העובד לקרן: 150*12 + 2000 = 3800 שקלים. על פני 20 שנים התשלום יהיה 3800*20= 76,000 שקלים. מספר מועט של שיחות טלפון ואיומי עזיבה יכול להקטין סכום זה במחצית. בפפועל החיסכון הכספי אפילו גדול יותר בגלל השפעת הריבית דריבית. בביטוח מנהלם ניתן לחסוך סכומים דומים או גדולים יותר.

ביטוחים רגילים

האם אתם יודעים כנגד מה אתם מבוטחים? האם אתם בטוחים שכל הביטוחים נחוצים ? האם ידעתם למשל שחברות ביטוח ישמחו לגבות פרמיה כפולה או משולשת על ביתכם אך במקרה של נזק, ישלמו כאילו שילמתם רק על פוליסה אחת? בעבר כתבתי מאמר שלם על Insurance.

מה היה לנו עד כאן? מאות אלפי שקלים חיסכון אפרי במשכנתא, עשרות אלפי שקלים חיסכון בפנסיה, אלפי שקלים חיסכון בקרן ההשתלמות ומאות שקלים חיסכון אפשרי מביטוחים מיותרים.

הכנסו לכאן כדי לקבל הצעה בנושא סיוע במיחזור משכנתא. זוכרים? מאות אלפי שקלים על הכף. פעלו עכשיו.

שימו לב, על פי החוק המעסיק שלכם ,חייב להעביר את ההפקדות לפנסיה/ביטוח מנהלים ולקרן השתלמות אליו You are תורו לו להעביר את הכסף. זהו כסף שלכם בסופו של דבר והוא משולם לכם בתמורה לעבודה קשה.

כמובטח, הצעה עסקית

פנו עכשיו באמצעות הטופס שלמטה. בעלות של 4880 שקלים תוכלו לקבל שירות VIP למיחזור המשכנא שלכם.

השירות כולל:

• בדיקה של המשכנתא הקיימת (ללא התחייבות)
• קביעה של תמהיל מיטבי עבורכם למשכנתא חדשה לאחר איסוף פרטים כלכליים על משפחתכם.
• משא ומתן עם הבנקים לקבלת תנאי משכנתא חדשה.
• בדיקה בחינם למשכנתא שלכם בעוד שנה ובעוד שנתיים (אשלח לכם תזכורת).

אם שירות מלא מיותר לדעתכם, תוכלו בעלות של 1850 שקלים לקבל ממני תמהיל תמהיל משכנתא

מיטבי עבורכם, כך שאת המשא ומתן עם הבנקים תוכלו לבצע בעצמיכם.

למיחזור משכנתא וחיסכון של עשרות או מאות אלפי שקלים צרו קשר.

המון הצלחות. שנה טובה ופוריה.

According to an article published in the newspaper The Marker, The Australian government is planning to raise the retirement age to 70. This will make Australia the first country to raise the retirement age to 70. I have often written that in my opinion, in Israel and the rest of the Western world too, the retirement age will be raised to 70 (at least).

In my opinion, this is unavoidable due to the inability of pension funds to fund more than 20 years of retirement after only 30 years of work.

In other words, the increase in life expectancy, which seems like good news to us, is not so good news from the perspective of pension funds: we start our careers later, work less, and expect to live many more years at the expense of our pensions. This doesn't work. You can't square the circle like that. Therefore, pension funds are experiencing deficits, and the government's way of dealing with this is by increasing working years and decreasing pension years. This is done by raising the retirement age. Here's the rub: a large portion of citizens will not have jobs at an older age. In other words, instead of 68-year-old pensioners, they will become 68-year-old unemployed individuals.

I think Australia is a wake-up call for all of us: Pension funds are not the solution! The notion that we manage most of our lives by letting experts handle problems simply won't work. Experts have no good way to handle problems. Our standard of living in old age is Our responsibility And not of the experts. We need to be the ones who take ourselves in hand, learn how to manage our finances, and take care of By ourselves So that we can live with dignity after age 60, regardless of the age the government sets for retirement.

I love real estate investments and use them to provide for my family and myself in old age. Of course, there are other ways to do the same thing. For example, you can learn to invest in the stock market or elsewhere. But, it's important to remember, wherever you choose to invest, it will be your sole responsibility. Therefore, you are the ones who need to make decisions and bear the consequences. If you choose the stock market as your preferred investment channel, learn to invest in the stock market. The bank's investment advisor, for example, is no more qualified than you. Statistics also prove that he will not achieve better than average results. But the investment advisor has sub-goals that you do not share with him. For example, the investment advisor makes more money for the bank the more commissions you pay, or in other words, the more transactions you make. Educate yourselves and make decisions on your own and responsibly, and thus your prosperity will increase.

Good luck.