Many times when talking to people in their 30s and 40s about retirement savings, the responses are, "What about me and this?"
Or "do not understand anything about it", and of course "I have many more years to prepare".
Financial preparation for retirement It is important to start at as young an age as possible, in order to enable a financially comfortable life when retiring.
A saver who earns the same amount as the average wage in the economy and begins to save for retirement at the age of 30 will accumulate about NIS 1.4 million for retirement, while if he starts saving at age 50, he will accumulate only NIS 0.5 million.
To receive an annuity at the average wage level in the economy - if you start saving at age 30 you need to save NIS 2,300 per month, while if you start at age 50 you will have to save about NIS 3,000 per month (all calculations above are based on assumptions of the same pension returns).
As of 2008, there is an obligation to insure every employee in pension insurance through deductions from the salary, both of the employee and of the employer.
In addition, the employer must set aside for the employee's compensation fund.
At present, the rate of pension provisions for employees is 18.5% of wages, of which 6% is at the expense of the employee and the rest at the expense of the employer.
It is important to emphasize that the employee is entitled to choose both the type of pension insurance in which he wishes to be insured (pension fund, provident fund, executive insurance) and the body that will manage the pension insurance for him.
In addition, the savings can be transferred between the governing bodies according to the employee's decision and while maintaining the sequence of his rights.
The employee is not allowed to waive the provisions for pension insurance, and the employer must make them.
In some workplaces, there are better pension arrangements than the minimum obligation, and then the employer must set aside according to these arrangements.
From 2017, the self-employed are obliged to take out pension insurance for themselves.
A self-employed person is entitled to a tax benefit for independent deposits for pension insurance, and if he deposits additional amounts beyond what is stipulated by law, he will be able to receive additional tax benefits.
We have an important task ahead of us - to take care of and prepare for financial existence in retirement and to make sure that the pension products in which we save are indeed suitable for us, and to avoid mistakes in this context.
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