4-Minute Money Ideas

If you worked in America before your move to Israel, chances are you have an IRA account. What should you do with this American account if you live an ocean away?

Should you transfer your retirement accounts to Israel?

An IRA is an “Individual Retirement Account.” There are several categories of IRA, including traditional, Roth, Simple, and SEP IRAs. The main differences between them relate to when taxes are paid. (Check with your accountant about your own situation since this article does not constitute tax advice.)

Another common type of retirement account in the United States is the 401(k), which is a “defined contribution” plan. Contributions to the account are deducted from your paycheck and you only pay tax on them when you make a withdrawal. Sometimes contributions are matched by employers, which make it an especially sweet way to save. However, when you work in Israel, you normally cannot continue contributing to the plans (unless you are employed by an American company). However, if you had such a plan in the United States, you can often roll it over into an IRA and easily manage it from Israel.

Useless or useful?

Having American retirement accounts when living in Israel can be useful. One reason is because the money invested can continue to grow. If you were to withdraw the savings and deposit them in Israel, depending on your age, you may be hit with penalties and taxes on the amount withdrawn.

A second benefit of having American retirement accounts while living in Israel is that the savings are held in America, and that means easier reporting on American taxes. Your pension plans produce IRS-friendly tax reports so you save yourself (and your accountant) hours of paperwork.

Also, American retirement accounts are already in Uncle Sam’s purview, and therefore don’t need to be reported on FBAR forms.

Everything changes when you move abroad

If you made aliya, the incongruity of the tax laws in America and Israel create certain complications that affect how retirement accounts are run and their tax status. Work with an international brokerage firm that understands the regulatory requirements of dealing with cross-border clients. In this way, you get the best of both worlds. You can live in Israel – and still benefit from your American retirement accounts.

To learn more, download the Profile Toolkit, a guide to handling your U.S. investments from Israel at: www.Profile-Financial.com/toolkit

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation about handling your U.S. investments from Israel. 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

Should Your American Assets Stay in the United States?

By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel

When making aliya, many olim move their American assets to Israel and convert all their dollars to shekels. However, there is a strong case to be made for leaving your dollars in America. Here's why:

Efficiency

U.S. securities markets may still be the most efficient, and individual-investor friendly in the world. You can have a diversified basket of global assets within a "regular" U.S. brokerage account, and do it cost effectively. America has an established market, with steady government regulations and investor protection programs like SIPC, protecting the investor and his assets.

Diversification

A U.S. brokerage account can host a variety of investment vehicles in American or global companies. Furthermore, you can have checks, debit cards, and other instant access to your funds, even if you are an ocean away.

Mutual funds

Mutual funds are an easy way to spread risk among different stocks and bonds. They are one of the most popular investment vehicles, both for beginning and professional investors, and they come in many forms, including "Exchange Traded Funds" (ETFs).

Uncle Sam's bureaucracy

Having the majority of your financial investments in the United States means it might be simpler to file an FBAR, as there will be fewer foreign institutions and accounts to report. Having U.S. compliant accounts makes it easier to meet all your reporting requirements.

Cross-border expertise

Make sure your advisor is licensed in both the United States and Israel, and has experience dealing with issues that you are facing.

Free Toolkit

For more about having a U.S. brokerage account from Israel, download the most comprehensive, simple-to-use guide, "Toolkit for Opening U.S. Brokerage Accounts from Overseas" at www.Profile-Financial.com/toolkit.

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 about handling your U.S. investments from Israel. 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.

Should Your American Assets Stay in the United States?

 By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel

When making aliya, many olim move their American assets to Israel and convert all their dollars to shekels. However, there is a strong case to be made for leaving your dollars in America. Here’s why:

Efficiency

U.S. securities markets may still be the most efficient, and individual-investor friendly in the world. You can have a diversified basket of global assets within a “regular” U.S. brokerage account, and do it cost effectively. America has an established market, with steady government regulations and investor protection programs like SIPC, protecting the investor and his assets.

Diversification

A U.S. brokerage account can host a variety of investment vehicles in American or global companies. Furthermore, you can have checks, debit cards, and other instant access to your funds, even if you are an ocean away.

Mutual funds

Mutual funds are an easy way to spread risk among different stocks and bonds. They are one of the most popular investment vehicles, both for beginning and professional investors, and they come in many forms, including “Exchange Traded Funds” (ETFs).

Uncle Sam’s bureaucracy

Having the majority of your financial investments in the United States means it might be simpler to file an FBAR, as there will be fewer foreign institutions and accounts to report. Having U.S. compliant accounts makes it easier to meet all your reporting requirements.

Cross-border expertise

Make sure your advisor is licensed in both the United States and Israel, and has experience dealing with issues that you are facing.

Free Toolkit

For more about having a U.S. brokerage account from Israel, download the most comprehensive, simple-to-use guide, “Toolkit for Opening U.S. Brokerage Accounts from Overseas” at www.Profile-Financial.com/toolkit.

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 about handling your U.S. investments from Israel. 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.

Why Gender Bias is a Good Thing in Financial Planning

By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel

One area where gender bias isn't discussed enough is in financial planning. Financial planning for women must be different than for men.

What do women need to know when planning their financial future?

Women work fewer years than men

Even though men are more involved with domestic duties than in previous generations, typically women take time off after childbirth more often than men take paternity leave. When children are young, mothers are more likely than fathers to work part-time or to stop working entirely for a few years.

Women's pension savings tend to be smaller than men's, due to fewer and shorter work years. Compound this with the difficulty of advancing in careers due to working part-time or non-consistently, and the result is that many women have less money saved than their male colleagues.

Women live longer

Statistically, women tend to live longer than men, meaning they face more years of needing to support themselves after retirement.

I often see widowed women who are financially illiterate because their doting husbands handled the finances. Unfortunately, this means that these widows are helpless when their husbands pass away, and may not even know what assets they have at their disposal or what to do with them.

Take the reins

If you are working, or even if you are a stay-at-home-mom, make sure to put some money aside into savings. Be involved in your family's financial decisions, rather than leaving it all up to your spouse. Financial communication and knowledge are essential to a good marriage.

Although gender equality has come a long way, I have found that women, especially elderly women, often have taken a backseat in handling their finances. If you're nervous about managing your money, call my office (02-624-2788) to find out what options are available to you.

To learn more about financial equality for women, check out the video at www.Profile-Financial.com/women.

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 about handling your U.S. investments from Israel. 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.

Why Gender Bias is a Good Thing in Financial Planning

By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel

One area where gender bias isn’t discussed enough is in financial planning. Financial planning for women must be different than for men.

What do women need to know when planning their financial future?

Women work fewer years than men

Even though men are more involved with domestic duties than in previous generations, typically women take time off after childbirth more often than men take paternity leave. When children are young, mothers are more likely than fathers to work part-time or to stop working entirely for a few years.

Women’s pension savings tend to be smaller than men’s, due to fewer and shorter work years.  Compound this with the difficulty of advancing in careers due to working part-time or non-consistently, and the result is that many women have less money saved than their male colleagues.

Women live longer

Statistically, women tend to live longer than men, meaning they face more years of needing to support themselves after retirement.

I often see widowed women who are financially illiterate because their doting husbands handled the finances. Unfortunately, this means that these widows are helpless when their husbands pass away, and may not even know what assets they have at their disposal or what to do with them.

Take the reins

If you are working, or even if you are a stay-at-home-mom, make sure to put some money aside into savings. Be involved in your family’s financial decisions, rather than leaving it all up to your spouse. Financial communication and knowledge are essential to a good marriage.

Although gender equality has come a long way, I have found that women, especially elderly women, often have taken a backseat in handling their finances. If you’re nervous about managing your money, call my office (02-624-2788) to find out what options are available to you.

To learn more about financial equality for women, check out the video at www.Profile-Financial.com/women.

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 about handling your U.S. investments from Israel. 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.

Is Risk Management the Best Financial Strategy?

By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel

What is risk management, and how does it affect your investment decisions?

Every investment is risky

Every investment carries a chance of making a profit – and a risk of sustaining a loss. However, some investments are riskier than others. Generally speaking, the more profitable investments contain the most risk; if an investment can potentially make a high profit, it can also cause just as much of a loss. So if you're thinking about an investment that could give a high return, ask yourself if you could handle that level of loss if it doesn't work out.

Is it worth taking a chance?

If you're afraid of risk, you may prefer to play it safe by keeping all your money in a savings account in the bank. You won't make much profit as interest rates are low, but at least you minimize your chances of losing money. Savings accounts, money markets, and CDs offer protection against risk. However, when the product becomes due, the real value of your money may have decreased if the interest rate didn't keep up with inflation.

Risk management vs. risk avoidance

Fortunately, when investing, there are many choices and you don't need to single-handedly embrace or reject high-risk investments. There's a middle ground: follow a policy of risk management.

For example, if you're young and have many working years ahead of you, you may be able to withstand more risk than someone nearing retirement since you have time on your side to recoup any market losses. On the other hand, an older worker may be comfortable with some aggressive pieces in his asset allocation, but he might feel the need to have a more conservative portfolio so he doesn't get a nasty surprise if the market crashes just when he's entering retirement.

Consult with a financial advisor to help determine your risk level and develop a strategy to manage risk in your investment portfolio. To learn more about investment risk, read: www.RichAsAKing.com/risk.

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 about handling your U.S. investments from Israel. 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.

Is Risk Management the Best Financial Strategy?

By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel

What is risk management, and how does it affect your investment decisions?

Every investment is risky

Every investment carries a chance of making a profit – and a risk of sustaining a loss. However, some investments are riskier than others. Generally speaking, the more profitable investments contain the most risk; if an investment can potentially make a high profit, it can also cause just as much of a loss. So if you’re thinking about an investment that could give a high return, ask yourself if you could handle that level of loss if it doesn’t work out.

Is it worth taking a chance?

If you’re afraid of risk, you may prefer to play it safe by keeping all your money in a savings account in the bank. You won’t make much profit as interest rates are low, but at least you minimize your chances of losing money. Savings accounts, money markets, and CDs offer protection against risk. However, when the product becomes due, the real value of your money may have decreased if the interest rate didn’t keep up with inflation.

Risk management vs. risk avoidance

Fortunately, when investing, there are many choices and you don’t need to single-handedly embrace or reject high-risk investments. There’s a middle ground: follow a policy of risk management.

For example, if you’re young and have many working years ahead of you, you may be able to withstand more risk than someone nearing retirement since you have time on your side to recoup any market losses. On the other hand, an older worker may be comfortable with some aggressive pieces in his asset allocation, but he might feel the need to have a more conservative portfolio so he doesn’t get a nasty surprise if the market crashes just when he’s entering retirement.

Consult with a financial advisor to help determine your risk level and develop a strategy to manage risk in your investment portfolio.  To learn more about investment risk, read: www.RichAsAKing.com/risk.

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 about handling your U.S. investments from Israel. 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.

Estate Planning: What Happens to Your Money After You Die?

By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel

One of the most important issues in estate planning is what happens to your money after you die. How quickly your heirs receive the inheritance depends largely on your estate planning. (If you're having any difficulties with an inheritance, please email me at [email protected].)

3 things to consider when planning your estate

When setting up U.S. IRA and brokerage accounts for clients who live in Israel, I ask them to consider what will happen when they no longer need their money. Here's where to start:

1. Provide beneficiaries for your retirement accounts. Individual Retirement Accounts (IRAs), 401(k) plans, and many other retirement and insurance programs can be transferred to heirs via a beneficiary designation, and therefore do not need to be included in a will. When you fill in the new account paperwork, provide details about who should get the money and what percentage they should receive.
2. Consider a trust. If simply dividing up the money amongst the children and grandchildren wouldn't work for your family, a trust can provide more control, though you should be wary about trying to control your estate from the grave. In cases where children might not have financial skills or where there is a risk of litigation, a trust can protect assets. Israel passed new trust laws recently, so if you already have a trust, or if you're thinking of establishing one, speak to an attorney to get proper advice.
3. Make a clear will. When my office helps to disburse deceased clients' accounts to the heirs, we find the process goes smoothly if the clients had written a clear will with the help of an attorney. Folks who try to save on legal fees can end up costing their estate a lot more in the end since problematic documents mean hours of a lawyer's time to handle.

When clients pass away, we work with the family and guide them step by step through the money transfer. If you have questions about handling your estate, send me an email ([email protected]) or call (02-624-2788) and let's begin a conversation about how to make the right moves.

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 about handling your U.S. investments from Israel. 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.

Estate Planning: What Happens to Your Money After You Die?

By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel

One of the most important issues in estate planning is what happens to your money after you die. How quickly your heirs receive the inheritance depends largely on your estate planning. (If you’re having any difficulties with an inheritance, please email me at [email protected].)

3 things to consider when planning your estate

When setting up U.S. IRA and brokerage accounts for clients who live in Israel, I ask them to consider what will happen when they no longer need their money. Here’s where to start:

1. Provide beneficiaries for your retirement accounts. Individual Retirement Accounts (IRAs), 401(k) plans, and many other retirement and insurance programs can be transferred to heirs via a beneficiary designation, and therefore do not need to be included in a will. When you fill in the new account paperwork, provide details about who should get the money and what percentage they should receive.
2. Consider a trust. If simply dividing up the money amongst the children and grandchildren wouldn’t work for your family, a trust can provide more control, though you should be wary about trying to control your estate from the grave. In cases where children might not have financial skills or where there is a risk of litigation, a trust can protect assets. Israel passed new trust laws recently, so if you already have a trust, or if you’re thinking of establishing one, speak to an attorney to get proper advice.
3. Make a clear will. When my office helps to disburse deceased clients’ accounts to the heirs, we find the process goes smoothly if the clients had written a clear will with the help of an attorney. Folks who try to save on legal fees can end up costing their estate a lot more in the end since problematic documents mean hours of a lawyer’s time to handle.

When clients pass away, we work with the family and guide them step by step through the money transfer. If you have questions about handling your estate, send me an email ([email protected]) or call (02-624-2788) and let’s begin a conversation about how to make the right moves.

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 about handling your U.S. investments from Israel. 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.

Avoid These Common Mistakes When You Receive an Inheritance

By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel

A new client recently told me, "My late father left me an inheritance of an IRA (Individual Retirement Account) worth $1.5 million, and I'm the sole beneficiary. What should I do with it? If I bring the money to Israel, I'll have to sell the stocks and wire the money to my account here. But if I do that, I'll have to pay tax in the United States and maybe Israel, too."

Unfortunately, many beneficiaries make costly money mistakes. Read about the mistakes you should avoid if one day you receive an inheritance, and then check out our free interactive tool at www.profile-financial.com/interactive.

Don't take money out of the IRA

If a beneficiary withdraws the funds from the IRA, he'll lose a fantastic American tax benefit. People with regular IRAs only pay tax on the money they withdraw. Any money remaining in the account can continue to grow untaxed. An inheritor can transfer the original IRA into a "beneficiary IRA" (a.k.a. "stretch IRA") and this maintains the tax-deferred status of the account until the money is eventually withdrawn.

No U.S. capital gains tax on sales inside an IRA

According to IRS rules, U.S. citizens holding IRAs don't pay capital gains tax (or tax on interest and dividends) when they sell stocks for a profit inside their account. This is a huge benefit when compounded over many years.

Probably no estate tax

U.S. citizens who leave their estates to their American-citizen spouses or children don't have to pay estate tax as long as they don't exceed the "federal estate tax exemption," which is $5.45 million (as of 2016). (Be sure to consult with a qualified tax advisor in case there's any state or local estate tax.)

As I don't give tax advice to clients, I always tell beneficiaries of an inheritance to consult tax professionals. I often work directly with clients and their accountants to make sure that their investments and tax obligations are handled properly.

If you're getting an inheritance and you live in Israel, make sure to check out www.profile-financial.com/interactive.

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 about handling your U.S. investments from Israel. 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.