Financial tips for this summer’s Nefesh B’Nefesh olim
As originally appeared in The Jerusalem Post on August 22, 2025.
Earlier this week, I celebrated my 33-anniversary living in Israel. While 33 years may be considered an old-timer, this week also marked the touchdown of a Nefesh B’Nefesh (NBN) charter flight, bringing 225 new Olim to Israel. On the flight, there were 125 children. Truly amazing.
When I heard that number, I remembered a story that took place more than 20 years ago. We were on vacation in Seattle and went to synagogue for Saturday night prayers. Rabbi Shalom Gold z”l happened to be also in Seattle, and we were talking to each other as we entered the synagogue. Suddenly, someone approached Rabbi Gold and said, “Rabbi, you guys in Israel have a real demographic problem!” Rabbi Gold cut him off and, in his very unique way, said, “Humm. We have a demographic problem? Well, you know it takes 9 months to have 1 child, but if you got on a plane with your family and made Aliyah, we’d have 6 more people as soon as you arrive. You are the solution to ‘our’ demographic problem.” And then walked away.
Kudos to NBN co-founders Rabbi Yehoshua Fass and Tony Gelbart, and the entire staff, for the incredibly hard work they put in to make this happen. It’s not just this flight, but over 1,000 olim are expected just in August. Over 7,000 have made Aliya since October 7th. Truly inspiring.
For olim ‘living the dream’ once the euphoria of the new move wears off and reality strikes one of the questions that is often asked is how they should approach their new financial situation. Should their money make Aliyah with them?
Good riddance
Many US brokerage firms are no longer servicing clients with non-US addresses, which has led to an increase in find another firm letters. This means anyone holding an investment account with an Israeli address often has only 30–60 days to move assets, a situation that can feel overwhelming for new olim who are already focused on settling families, helping children adjust to new schools, and finding employment. During this transition, professional tax preparation services can be helpful in understanding reporting obligations and avoiding surprises tied to account transfers or asset changes.
If you receive this letter, take it seriously. I know many people who didn’t pay attention to the letters and had their accounts moved to unclaimed property. Others have had accounts liquidated, creating an unnecessary capital gains tax bill.
Bring it to Israel
I receive many calls from individuals who want to bring most or all of their money to Israel. While that may be a rah rah “go Isael” Zionistic approach, in practice it’s not so easy. With regulations like Foreign Account Tax Compliance Act (FATCA), many local banks will refuse to deal with American citizens vis-à-vis investments. If they will deal with you, then you will need to be careful how you invest as certain Israeli investments like mutual funds may be subject to prohibitively high tax rates in the US, due to Passive Foreign Investment Company (PFIC) rules. This basically leaves you with having to invest in individual, local stocks and bonds. For most olim this is a non-starter as they are not familiar with the local stock market. Nonetheless, if you are going to invest locally, make sure that you speak with an accountant first, in order to learn what can and what can’t be bought.
It’s also important to keep your IRA(individual retirement account) in the US. Investors don’t always realize that if you close out your IRA, not only are you potentially looking at withholding taxes, but IRA withdrawals are treated as income, so if you were to liquidate the entire IRA that could cause a huge tax hit. That also applies to those thinking about funding a local real estate purchase with funds from a 401k or IRA. Many individuals are unaware of these issues, and mistakes can be quite costly.
Profit from real estate?
Many Olim have sold their homes in North America, and even after accounting for a new purchase in Israel, are left with large sums of cash. Many olim also have individual, joint and IRA accounts in the US. Due to what I mentioned above it makes sense to leave this money in the US. If you are a do-it-yourself investor (DIY) then managing your own money from Israel is no big deal- except for the non-US address issue. But what if you want to use a professional to advise you and manage your funds? Should you look for someone in the US or someone local? Questions about DST? Check out this website for more info.
If you have someone that you know and trust in the US, then it may make sense to use her. If you choose someone based in Israel, make sure that they are licensed both in Israel and in the US. There are a lot of ‘advisors’ running around under the radar screen without the appropriate licenses, pitching all kinds of investments, giving seminars and advice, that may or may not be in your best interests, so be careful.
Welcome to Israel.
The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.
Aaron Katsman is the author of Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, SIFMA, FSI. For more information, call (02) 624-0995 visit www.aaronkatsman.com or email aaron@lighthousecapital.co.il.
