A couple sat across from me on a recent call, expecting the conversation about a pending shekel windfall to end with clarity. Instead, it ended with something harder to accept: There was no obviously right answer. They were about to receive a sizable tax refund in Israel and wanted to know whether to pay down their mortgage. The husband leaned toward paying it off. The wife was less certain. They asked what I would do, and I had to tell them: Either choice was defensible.
The mortgage decision many retirees face
Americans living in Israel often carry Israeli mortgages with relatively low fixed rates. This couple held a long-term mortgage under three percent. Paying it down would noticeably reduce their monthly outflow. That sounds appealing when you are in your sixties and prefer not to carry debt into your seventies. But the tradeoff was less obvious than it seemed. If they kept the money and invested it in dollar-based accounts, they would likely earn more over time, though with no guarantees and exposure to market risk. If they spent the shekels gradually to cover monthly expenses, they could let their dollar assets grow untouched. Neither option was wrong.
Why the numbers do not resolve the question
The financial math slightly favored keeping the mortgage and investing the difference. The emotional benefit of eliminating debt leaned the other direction. The shekel refund would disappear within a year if used for ordinary spending. Paying down the mortgage would free up cash flow each month, but they were not struggling to meet payments. The relief would be more psychological than financial. In many cases, mortgage decisions in retirement hinge more on comfort and control than optimization.
What matters more than the mortgage itself
This couple had diversified U.S. portfolios, strong liquidity, and manageable debt. The real risk was making a large financial decision without clarity on the broader picture. Over-concentrating assets, failing to coordinate cross-border planning, or reacting emotionally to market swings are far more consequential than whether to prepay a low-rate mortgage. If you are managing U.S. investments from Israel and facing decisions where no single answer feels correct, schedule a free introductory call at profile-financial.com/call or call 02-624-2788.
Douglas Goldstein, CFP® is the director of Profile Investment Services, Ltd. profile-financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for help with your U.S. brokerage and IRA accounts. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The author’s opinions are not necessarily those of PRG or its affiliates. Neither PRG nor its affiliates provide tax or legal advice.
Published November 10, 2026.