Introspection
When economist Irit Harel, 68, decided to take an interest in her pension situation prior to her retirement from her job as manager of the securities exchange liaison unit, she discovered that various laws had significantly changed and that you “need a PhD”, in her words, to become proficient in the field. • “If I had received pension counseling for comprehensive and good retirement planning from the beginning,” she says today, “I would also have saved myself certain sums of money that we lost and would have made different decisions than those I made.” Harel. “I only did my ‘homework’ after retirement, which of course was a mistake.”
“If I had received pension counseling for comprehensive and good retirement planning from the beginning, I would also have saved myself certain sums of money that we lost and would have made different decisions than those I made.” This is the statement made by economist Irit Harel, 68, who a year and a half ago left her position as manager of the liaison unit with the companies traded on the Tel Aviv Stock Exchange and retired. Harel, a mother of three, does not have much free time in her planner. She is regularly present in art lectures, studies bridge, invests endless time and energy in the apartment she has purchased in recent years and in a real estate project of one of her family members (“The issue of real estate is close to my heart”), marches daily at the HaYarkon Park, which is closer to her home, and at the end of the month, she will also begin interior design studies at the Open University. In between, Harel makes sure to report to the pension consulting and retirement planning department at Bank Hapoalim for the benefit of what she defines as “finally organizing my pension payments.”
Irit, is it not customary to receive pension counseling before retirement and not after?
“True, but I couldn’t bring myself to concentrate on the issue while I was working, nor did I really monitor the state of the amounts of money accrued to my credit. Since I have executive insurance, at some point in the last few years of work I stopped setting aside funds for the insurance component and transferred them to a savings path, but that’s where it pretty much ended. So, you could say that I did my ‘homework’ after retirement from work, because then I could concentrate more, but in retrospect - that was obviously a mistake on my part.”
What did you find when you got into the thickness of the beam?
“That the laws have changed significantly in the last two decades, and that for example, my money got ‘covered’ in all sorts of colors, according to the changing rates of tax brackets that weren’t present before. Sometimes I think a doctorate is needed to get acquainted with the various rights and benefits, including tax benefits, that come to people who reach retirement age - and I say that as an economist. Although I did receive counseling prior to retirement from a company that works in the field, today I know it was minimal and superficial. After I retired from work, I received a recommendation from a friend to come to retirement counseling at Bank Hapoalim, where I received very personal and professional advice. Thanks to their advice I realized what my rights were, the significance of each decision I made, and most importantly - I got personal accompaniment. There is no doubt that today I understand my pension savings structure much better.”
Does the fact that you did not receive in-depth and comprehensive pension counseling before retirement affect your standard of living?
I don’t feel a significant drop in this regard, but I am sorry that I did not receive good advice from the beginning, including conducting vis-a-vis the tax authorities. For example, when they asked me before retirement how much of my compensation money, I would like to have in cash now and how much they would serve as a basis for annuity. This was a decision of the here and now, and one of no return. Maybe today I would have chosen a different route, a better one for me. However, over the past year, I have been planning an ongoing budget for myself with the executive and social security funds that I receive, and I am very adherent to its limits and do not go overboard.”
Why did you not quit your job at the age of 62 and prefer to continue another five years until retirement?
“I admit that it didn’t even go through my head. I really liked what I was doing at the stock exchange, and I had no plans to start a different career or to move to another job. When I arrived at the stock exchange in my mid-30s, initially as a temp and later as an employee and a manager, there were 200 listed trading companies. By the time I left, there were already about 500, so you could say that the stock exchange and I grew up together.”
With the experience you gained, what golden advice would you give your employees today before retiring?
“Most important is not to repress the issue like I did and try to figure out where you stand as soon as possible. Look, before retirement, when I checked my pension situation a little, then the numbers, in a big way, seemed fine to me. So, I told myself I would get on fine with this money. At no point did I go down to sharper resolutions, nor did I intend for the amounts I am entitled to receive to get a tax exemption. These are all steps I recommend for any retiree to take several years before retiring, and not wait until the last minute, because it is impossible to change the situation from one end to the other within a year. More serious work needs to be done.”
Disclaimer: the bank is not a tax advisor. Everything stated above only comprises general information and explanation, that does not constitute pension advice, investment advice of tax advice, and it does not replace personal advice subject to provisions by law.
‘I did not receive retirement planning advice before leaving my job, nor did I go down to the sharp resolutions of my pension funds, and I also did not have any guidance on the amounts that I am entitled to receive a tax exemption. These are steps I recommend for every employee to take a few years before retirement, and not wait until the last minute.’