November 21, 2013
Financial planning for a move to Israel
What I know about Israel comes from a variety of sources, including the news and commentary in this newspaper, countless books, my own experiences as a traveler to Israel, and the Facebook postings of my friends who live there. But the information and insights in “A Financial Guide to Aliyah and Life in Israel” by Baruch Labinsky (Mosaica Press, $19.99) filled in a great many gaps in my knowledge of the jewish homeland.
Labinsky is a financial planner and investment manager, and his book is intended for readers who are seriously considering — or who have already decided to make — a move to Israel. Much of the financial advice Labinsky offers is similar to what we might hear from a financial advisor in any country of the world. But it also contains information for any reader interested in Israel, even if he or she has no intention of making aliyah. Indeed, what I discovered in the pages of this book was fresh, surprising and illuminating.
The author acknowledges that there are many reasons a Jew in the Diaspora might choose to live in Israel — “religious beliefs, familial or culture ties,” among others — but he confines his book to single pointed query: “Can I afford to make Aliyah?” The practical issue becomes a lens through which to glimpse day-to-day life in Israel, a fascinating exercise even for those who are not yet packing up their possessions. It is also true, however, that Labinsky does not entirely ignore issue of faith: “Take things into your own hands,” he writes, “and with G-d’s help you can make it happen.” The point is made, by the way, in the playful illustrations by Menachem Jerenberg — almost all of the men, women and children are shown wearing a kippah or a head-covering.
Mostly, however, Labinsky accounts for how financial issues can shape one’s experience of Israel. Thus, for example, he discloses that “[a]ll Israeli citizens are entitled to join one of four health funds,” which cover basic medical services and offer supplementary insurance coverage. However, not everything is covered, and if you arrive in Israel with a medical condition that requires medicines or treatments not covered by Israel’s socialized medical system, the lack of coverage may impose costs so high that they “can even undermine an entire Aliyah plan.”
He is also alert to the practical problems of daily life. A new arrival in Israel “can get by with little or no Hebrew” in Jerusalem, Ramat Beit Shemesh and Efrat, he writes, but postponing the study of Hebrew may also make it difficult to “integrate professionally in Israel and attain financial stability.”
There are many other important considerations: Putting a stop-payment on a check, he cautions, “is considered a crime,” and he recommends consulting an attorney before doing so. U.S. Social Security payments received in Israel are not taxed at all in Israel but distributions from an IRA or a 401(k) account are taxable in both places (with a credit in the U.S. for taxes paid in Israel). He urges olim to master one of the most ancient practices of the Levant: “Living in the Middle East requires Westerners to change their ‘fixed-price’ mentality and start negotiating on all purchases,” he advises. “Don’t be embarrassed – that’s the way Israel operates and no one will think any worse of you.”
Some cherished myths are shattered along the way. “A once highly desirable option for olim was to look for a kibbutz to join,” he explains. “In recent years, however, most kibbutzim have been privatized. While kibbutz life still remains an option for some, the overwhelming number of olim aren’t interested in that lifestyle, and the options are far fewer with today’s kibbutzim.”
Other insights will be familiar to anyone who has spent time in Israel as a tourist. “Consumers pay significantly more for goods and services than their counterparts in most other Western countries,” which means that American spending habits can be catastrophic to a family budget. “For example, the average Israeli family spends about NIS 2,200 [about $625] a month on food,” he writes. “The average large Anglo family, when it comes to Israel, spends at least twice to three times that amount.”
Above all, however, the author insists that financial decisions are not purely a matter of dollars and cents. Holding onto one’s home back in the United States, for example, may be a prudent step for a new arrival to take, but Labinsky points out that it may weaken the resolve that is necessary for a successful aliyah: “Sometimes having an easy fallback plan prevents people from giving the Aliyah experience a real try,” he writes. “Psychology can play a tremendous part in whether or not Aliyah is successful.”
Jonathan Kirsch, author and publishing attorney, is the book editor of The Jewish Journal. His latest book is “The Short, Strange Life of Herschel Grynszpan: A Boy Avenger, a Nazi Diplomat, and a Murder in Paris” (W.W. Norton/Liveright), published in 2013 to coincide with the 75th anniversary of Kristallnacht. Kirsch can be reached at email@example.com.
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