Are You Making the Most of Your IRA While Living in Israel?
If you’re living in Israel but still have retirement savings in the U.S., your IRA might be one of the most overlooked—and underutilized—tools in your financial life. Many people treat their IRA like a dusty filing cabinet: they know it’s there, but they rarely open it up, let alone explore what’s possible inside. But here’s the thing—an IRA isn’t just a retirement savings account. It’s a potential investment powerhouse that, with the right strategy, can help you build serious long-term wealth.
There’s over $15 trillion in IRAs across America. That’s not a coincidence—it’s because these accounts offer unique advantages that, when used wisely, can support major financial goals, protect assets from taxes while you grow them, and provide flexibility for the future. So, if your IRA is sitting on autopilot, it may be time to think bigger.
A Framework for Strategic Growth
A traditional IRA offers something that few other investment accounts do: tax-deferred compounding. That means your money grows without being taxed each year, giving you the full force of compounding on 100% of your gains. Over time, this can create a snowball effect—growth on top of growth—that accelerates your wealth much faster than in a taxable account.
But it’s not just about piling up returns. Your IRA can be shaped to reflect your broader investment vision. Want to tilt toward more income-generating assets? Or lean into growth stocks while you’re still years from retirement? You can do that. The range of investment options—from ETFs and mutual funds to bonds and bank deposits—lets you design a portfolio that evolves with your goals.
From Forgotten Account to Financial Strategy
For Americans in Israel, an IRA can play an even more critical role. Many clients I work with have old 401(k)s or 403(b)s still sitting with their former U.S. employers. These accounts often offer limited choices and no ongoing advice—especially once you’re overseas.
Rolling these plans into a self-directed IRA can unlock a wider investment universe and put you back in control. It also makes it easier to coordinate with a financial advisor who understands cross-border issues, including how to structure your portfolio in light of both U.S. and Israeli tax considerations.
Of course, a rollover isn’t always the right answer. But it’s worth exploring if you’re looking to align your retirement savings with your bigger financial picture—whether that means planning for a flexible retirement lifestyle, legacy giving, or simply greater peace of mind.
Withdrawal Strategy = Wealth Preservation
Eventually, the IRS will ask for its share. That’s where required minimum distributions (RMDs) come in—starting at age 73, you’re obligated to withdraw a portion of your IRA each year. And here’s where strategy matters again. When you take money out, it becomes taxable income. Without a plan, you might find yourself paying more in taxes than necessary—or withdrawing at a time when the market isn’t in your favor.
A carefully crafted withdrawal strategy—coordinated with both U.S. and Israeli advisors—can help you optimize timing, reduce your tax burden, and keep your long-term goals on track.
This article is for educational purposes only and is not intended as financial, legal, or tax advice. Please consult with a qualified professional who understands your specific situation.
Ready to Build a Bigger Future With Your IRA?
Your IRA isn’t just a passive account—it’s a flexible, powerful piece of your long-term financial strategy. Whether you want to grow wealth, create income, or prepare a tax-efficient legacy, how you manage it today makes all the difference.
If you’d like a second opinion on your IRA—or you’re wondering whether a rollover might help you align your investments with your life in Israel—schedule a free Cross-Border Financial Evaluation today. Let’s talk about your big-picture goals and how your IRA can help get you there.
