A lawyer in New York explained to me that he and his wife want to retire in Israel since the majority of their children and grandchildren already live here. “I’ve been working hard to save,” he said, “but I don’t know how much money I need to retire in Israel.”
It’s not only the amount that you have
For this lawyer, and all new immigrants, the calculation requires more than just a number. For some folks, having $300,000 will suffice, but others may require millions of dollars.
Why people need different amounts
Many of my clients often have great pensions, and also receive Social Security. Some of them get an Israeli pension and also Bituach Leumi payments. Combined these provide a significant percentage, if not all, of their monthly bills.
Other clients don’t receive a fixed monthly pension. Perhaps they have a 401(k), an American retirement account (like an IRA). They must rely on their own nest egg to provide enough money to pay the bills for the rest of their lives.
Compare these two types of people and you can see why one needs more savings. Someone getting a fixed sum each month can manage with less principal since he won’t need to use his own funds. On the other hand, people without regular income need their portfolio to generate income.
And, it all depends on lifestyle. Your budget (including gifts and donations in addition to paying daily bills) will influence how large your nest egg needs to be.
How can you generate income for your retirement?
Those that need to pull money out of their accounts will seek portfolios that generate dividends and interest so that they do not eat into their principal. Depending on the total value of their portfolio, it might be fine to use some principal, but they need to be careful that they don’t spend down their savings too quickly.
If you need help figuring out how much money you can generate from your portfolio to pay for your retirement, call (02-624-2788) or email me, doug@profile-financial.com.
Douglas Goldstein, CFP®️ is the director of Profile Investment Services, Ltd. www.Profile-Financial.com He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.
Published August 25, 2022.