If you’re an American living in Israel, chances are your U.S. investments haven’t kept up with your new life. Why? Because many people are afraid to make changes that might trigger taxes. But letting fear freeze your portfolio could quietly sabotage your financial future. Not making changes can sometimes cost more than paying the IRS.
Old Strategies Don’t Always Work Overseas
One new client, recently retired in Israel, had structured his financial life with care. He took a reduced pension to ensure his wife would be protected with spousal benefits when he passed and he managed several American accounts. But his portfolio still focused on aggressive growth, which was completely mismatched for a stage of life that demanded stability and income.
When we reviewed his accounts, the issue wasn’t poor performance. It was misalignment. His plan hadn’t adapted to the changing priorities of his newly retired life in Israel. Selling stocks to align his investments with his new lifestyle would result in paying capital gains tax, so he resisted rebalancing. But holding onto a heavily growth-oriented portfolio meant staying exposed to market volatility and losing real money.
Taxes Matter but Timing Matters More
Investors often let tax consequences dictate their entire investment strategy. Paying taxes is never fun, but this tunnel vision creates risk. If markets drop before you make changes, you may lose more than you would have paid in tax.
This client didn’t need to overhaul everything. Instead, he trimmed risk by selling a portion of growth assets, accepted the tax cost, and shifted toward income-generating investments that gave him more predictability. That decision turned his portfolio into a tool for security, not just growth.
Another tax saving strategy popular among philanthropists is to donate appreciated stocks to a donor advised fund (DAF), whereby they meet their charitable goals and avoid paying capital gains tax on appreciated donated stock.
Your Portfolio Should Reflect Your Life
Life in Israel comes with new financial realities. Your investments need to reflect where you are in life now, not where you used to be. Sticking with an old strategy out of habit or fear of taxes can cost more than you expect.
Ask yourself: Does my U.S. portfolio still fit my goals here in Israel?
Find out by scheduling a free Cross-Border Financial Evaluation here. We’ll help you determine if and how we can help you adjust your strategy.
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 provide tax or legal advice.
Published December 24, 2025.