Information that is worth a lot of money to people approaching retirement age or who have already reached retirement age!

Information that is worth a lot of money to people approaching retirement age or who have already reached retirement age!

So if you have parents, relatives, friends or acquaintances who are 55 or older with an emphasis on 60-75, you should get their attention.

A few months ago, a client of mine contacted me to inform me that he is ending his job soon because he has reached retirement age (age 67).

From past data I remembered that person had executive insurance with a very large sum of money with a policy opened in 1989.

A person who reaches retirement age can use various tax benefits that he can take advantage of such as forward or final tax spread. For every four years of work, he is entitled to one deployment year. If dividing by four gives a number with half or more, round up, otherwise round down. It is not possible to spread tax for more than six years. You don't have to spread tax for 6 years and spreading tax should be done for the optimal period.

In addition, it is possible to use the exempt capital balance to determine rights, as a one-time sum that will be received now or in the future or as a tax exemption on the qualifying allowance. The maximum exempt income that can be received on a qualifying pension in 2024 is NIS 4,903. The exemption does not depend on the amount of the pension to which you are entitled.

All of these things are part of a retirement planning process that I recommend to any client who is near retirement age and wants to understand how to make the most of the tax benefits to which they are entitled, but the reason I'm writing this post is something that not many people know about.

It turns out that in the 80's and 90's there was a transition from paperwork that is filed on paper to computers. Due to the transition, many mistakes were made. Mistakes that are worth a lot of money in the span of several decades that have passed since then. As a result of this phenomenon, a unique company emerged that claims to have developed a work process with special software that can find these mistakes.

According to the company, which has been in existence for 21 years, the chance of finding a mistake in old policies is 50% and the chance of finding a mistake in profit participating policies is about 20%. Of course, the company does not work for free and charges a fee for this service. People don't always choose to pay the fees, but if there is a 50% chance of finding a potential mistake worth perhaps hundreds of thousands of shekels can be very worthwhile to say the least.

I suggest that when it comes to your pension funds towards retirement age, don't skimp and invest a few shekels in a professional retirement planner and also consider the inspection for old policies if applicable. This is money that can make a difference in how your retirement will be.

Have a nice retirement! 🙂