Episode 1.7 — Making Aliyah in Retirement: The Financial Realities, the Healthcare, and the Senior Anglo Community Nobody Told You About
There is a version of retirement aliyah that appears in certain brochures and promotional materials for life in Israel that goes something like this: you arrive in the golden years of your life, you find a beautiful apartment in Jerusalem or by the sea in Netanya, you take long walks in the warm Mediterranean air, you pray at the Western Wall on Friday afternoons, you eat wonderful food, your grandchildren visit, and you spend your days in a state of serene spiritual fulfilment.
This version is not entirely wrong. I have met people living approximately this version. But I have also met people who arrived expecting this version and encountered, instead, a complicated tangle of tax treaties, pension transfer questions, currency exposure, healthcare paperwork, and the discovery that their Hebrew, which they thought was reasonably serviceable from decades of synagogue attendance, does not in fact extend to a cardiology appointment.
So let us be honest, thorough, and practical — as we always are — and talk about what retirement aliyah actually involves.
The financial picture is the place to start, because it is the foundation on which everything else rests.
If you are retiring to Israel with income from abroad — a pension, Social Security, retirement account distributions, investment income — the ten-year tax exemption on foreign income that Israel provides to all new olim is extraordinarily valuable. For the first ten years after your aliyah date, income generated outside Israel is not subject to Israeli income tax and does not need to be reported to the Israeli tax authorities. This is not a small benefit. For someone living primarily on foreign pension or investment income, this can represent very significant tax savings over a decade.
However — and this is a large however — if you are an American citizen, the United States taxes its citizens on worldwide income regardless of where they live. You will continue to file US tax returns every year for the rest of your life. The US-Israel tax treaty provides some protection against double taxation, and Social Security income specifically is generally exempt from Israeli taxation even after the ten-year period, but the interaction between the American tax system and the Israeli tax system is complex enough that I will say it plainly: before you make aliyah, hire an accountant who specialises in US-Israel cross-border taxation. Not an Israeli accountant. Not an American accountant. Someone who works specifically in this space. This is not optional. This is necessary.
If you are British or from other countries, the situation is different but the principle is the same — the interaction between your home country's pension and tax system and Israel's deserves professional attention before you arrive, not after.
Let us talk about pensions specifically. If you receive a government or public sector pension from your home country — a teacher's pension, a civil service pension, a military pension — there may be specific provisions in the relevant tax treaty about where that pension is taxable. Some pensions that seem straightforward become complicated in a cross-border context. Again: professional advice, before you leave.
Social Security, for American olim, can be received directly into an Israeli bank account in shekels. The exchange rate applied is generally quite favourable. You can arrange this by contacting the US Embassy in Jerusalem after you have made aliyah and have an Israeli bank account. It is worth investigating once you have settled.
Currency risk is a real and often underestimated factor in retirement aliyah. If your income is in dollars or pounds and your expenses are in shekels, fluctuations in exchange rates directly affect your standard of living. The shekel has historically been a strong and stable currency, but "historically stable" is not a guarantee, and a ten percent shift in exchange rates changes your effective income by ten percent. Build buffers into your budget. Do not plan your Israeli retirement finances on the assumption of a fixed exchange rate.
The healthcare question is one of the most important for retirement olim, and it is also one of the areas where Israel's system is genuinely remarkable.
Israel's national health insurance system is excellent, particularly relative to its cost. You choose a kupat cholim — health fund — from the four options, you pay your Bituach Leumi contributions which fund the basic tier, and you access a comprehensive range of medical care. The specialist network is strong, the hospital system is good, and many doctors are internationally trained. For olim who are arriving from the United States, where healthcare costs can be devastating, this is often one of the most positive discoveries of their first year.
The supplementary insurance — called mushlam or zahav depending on the fund — is particularly important for retirement-age olim. This second tier provides faster access to specialists, some dental coverage, certain medications not included in the basic basket, and in some funds, access to specific hospitals and practitioners. The monthly premium for supplementary coverage is modest relative to what it covers. Do not skip it.
Your private health insurance from your home country, including any travel health insurance, should be reviewed before aliyah. Some policies have provisions for expatriates; many do not. Once you have Israeli kupat cholim coverage in place, the role of foreign health insurance changes, but there may be a transition period to manage carefully.
One important note: the quality and accessibility of specialist care varies somewhat by location in Israel. Tel Aviv and Jerusalem have the highest concentration of specialists and the most internationally-trained physicians. If you have complex or ongoing medical needs, this should factor into your choice of city. That said, the Israeli healthcare system is small enough, and the referral networks tight enough, that excellent care is generally accessible throughout the country.
Now let us talk about community, because for retirement olim, this is often what determines whether an aliyah succeeds or struggles.
The good news is that there is an active, mature, and genuinely welcoming senior Anglo community in Israel, concentrated in certain areas. Jerusalem, Netanya, Ra'anana, Modi'in, and several other cities have established communities of English-speaking olim in their fifties, sixties, seventies and beyond. These communities have developed their own social infrastructure — regular gatherings, cultural events, volunteer opportunities, shared synagogue communities, walking groups, book clubs, and the kind of informal social network that makes daily life rich and connected.
Nefesh B'Nefesh explicitly addresses the needs of retirement-age olim. They hold seminars and informational events specifically for this demographic, and their advisors understand the financial and practical questions that are specific to people moving in later life. I strongly recommend attending one of these events — in person if possible, online if not — before you make final decisions.
The honest challenge for retirement aliyah is twofold. First, distance from family. If your children and grandchildren remain abroad, you are choosing to live far from them. The emotional calculus of this is deeply personal and I will not pretend to resolve it for you. Many retirement olim find that they see their families more than they expected — Israel is a destination that draws Jewish families for visits, and video calling has transformed the experience of distance. But it is a real factor and it deserves honest conversation within your family before the decision is made.
Second, the language. Learning Hebrew at sixty or seventy is harder than learning it at thirty. I will not pretend otherwise. The ulpan system is available to retirement olim and there are classes specifically designed for older learners. Many communities offer an effective workaround through the sheer size of the English-speaking community — there are retirement-age olim in Israel who function almost entirely in English in their daily lives. This is possible. It is also, I would suggest, a somewhat impoverished version of the experience Israel can offer. Even basic Hebrew — enough to navigate a doctor's appointment, a municipal office, a conversation with a neighbour — opens the country to you in ways that living only in English cannot.
Retire to Israel with clear eyes, careful financial planning, good professional advice, and an honest conversation about community and family. It is a remarkable place to spend the years when you have time, finally, to actually look at where you are living.
The hummus is very good. That part of the brochure is completely accurate.
