Israelis could lose a third of their pension - how it will happen

The article analyzes the impact of inflation on the purchasing power of Israelis' pension savings. Calculations show that with an average inflation rate of 2.5%, a retiree receiving 15,000 shekels per month will be able to afford goods and services worth only 9,600 shekels in current prices by age 85. Scenarios at different inflation levels and capital preservation strategies are examined.

The article, based on material by Anat Gilad for bizportal, analyzes how inflation undermines the purchasing power of Israelis' pension savings. Specific calculations are provided: with an average inflation rate of 2.5%, a retiree retiring at age 67 with an income of 15,000 shekels per month will be able to afford goods and services worth only 9,600 shekels in current prices by age 85. To maintain the standard of living after 18 years, 23,400 shekels per month will be needed. Scenarios are considered at inflation rates of 2% (21,400 shekels) and 3% (25,500 shekels). It is noted that expenses for home care and medical care for the elderly may rise faster than the general price index. The article recommends evaluating pension savings under several scenarios and diversifying savings by dividing them according to usage periods: liquid funds for the near future, less volatile instruments for the medium term, and assets with growth potential for the distant future. An example of a family with a budget deficit of 5,000 shekels per month is given, which will expand due to inflation.