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Retiring in Israel

Residency routes, healthcare and pension tax · ILS

Routes to residency

Healthcare

Israel's National Health Insurance Law covers only those formally recognized as residents by Bituach Leumi (the National Insurance Institute). Jewish immigrants/oleh under the Law of Return are enrolled automatically on arrival. Other foreigners on a long-stay (non-Aliyah) visa must separately establish 'resident' status with Bituach Leumi (generally requiring an appropriate visa and proof the 'center of life' is in Israel); tourists and short-term visitors have no entitlement to subsidized public care and are billed at full private rates.

For new olim there is generally no waiting period (about a 3-week processing time). Non-oleh foreign residents establishing residency, and returning citizens who were abroad, can face a waiting period of up to 6 months before Bituach Leumi health coverage begins (this can be 'redeemed' for a fee).

Because of the possible multi-month waiting period before Bituach Leumi coverage starts, private/traveler's international insurance is commonly obtained to cover that gap and any period before formal resident recognition; typical products are international expat health plans, cost and scope vary by provider and are not set by Israeli law.

US Medicare: US Medicare does not cover medical care received in Israel; Medicare generally only pays for care inside the United States (with very limited exceptions near the border), so retirees in Israel must rely on Bituach Leumi coverage, private insurance, or out-of-pocket payment.

Pension income tax

Israel taxes foreign pension income of its residents.

Israel exempts foreign pension and other foreign income for the first 10 years for new residents and 'senior' returning residents (10+ years abroad). After that 10-year exemption ends, the taxpayer can generally choose between a 35% exemption on the foreign pension or Israeli tax capped at the rate that would have applied in the pension's country of origin.

There is a US income tax treaty with Israel.

Under Article 20 of the US-Israel tax treaty, private pensions and similar remuneration are taxable only in the recipient's country of residence, and US Social Security benefits are exempt from tax in both countries. However, the treaty's 'saving clause' (Article 6) lets the US continue to tax its citizens on worldwide income, including US pensions, as if the treaty did not exist, so US citizens living in Israel typically remain subject to US tax on US private pensions even while Israel applies its own exemption/cap rules; government-service pensions are generally taxed by the paying country, with a US foreign tax credit available to US citizens who are also taxed by Israel.

Sources: Bituach Leumi - Nefesh B'Nefesh · Israel - Health Service - Expat Focus · Health Insurance for Returning Citizens (through Bituach Leumi) - Nefesh B'Nefesh · Your Taxes: How does Israel tax foreign pensions? The laws all immigrants should know - Jerusalem Post · Does the U.S.-Israel tax treaty's savings clause prevent American expats from claiming treaty benefits on Israeli income? - Greenback Tax Services · Democrats Abroad Requests Clarification Of U.S.-Israel Treaty Provisions - Tax Notes

Checked Oct 2026

Customs & etiquette

• Modest Dress at Religious Sites — When visiting churches, synagogues, mosques, and holy sites such as the Western Wall, dress modestly: shoulders and knees covered, and loose-fitting long-sleeved tops and pants are recommended. Some sites provide shawls or wraps to borrow if you arrive under-dressed, and men may be asked to wear a head covering (kippah) at synagogues or the Western Wall.
• Shabbat Observance — Shabbat runs from sunset Friday to sunset Saturday. During this time many shops, restaurants, and public transport shut down, especially in Jerusalem and religious neighborhoods, and Orthodox areas may be blocked to traffic. Visitors should plan meals, transport, and activities in advance, as kosher restaurants close for Shabbat.
• Shabbat Dinner Etiquette — If invited to a Shabbat dinner, dress modestly and somewhat formally (dresses or skirts for women, a nicer shirt for men); jeans are often considered too casual. Bringing a small gift such as wine, flowers, or kosher dessert is appreciated, and the meal typically includes blessings, wine for Kiddush, and challah bread.
• Kosher Dietary Customs — Many Israelis keep kosher, meaning meat and dairy are not served or eaten together, and only certain foods and preparation methods are permitted. When dining with or hosting Israeli guests, it is respectful to assume kashrut observance unless told otherwise and to ask about dietary restrictions in advance.
• Greetings and Physical Contact — A firm handshake with direct eye contact is standard in business and casual settings, while close friends and family may greet with hugs or cheek kisses. However, physical contact between unrelated men and women should be approached cautiously, as some Orthodox Jews avoid touching members of the opposite sex entirely.
• Direct Communication Style — Israelis are known for a straightforward, direct communication style that can seem blunt or even confrontational to outsiders, including loud debate and interruptions in conversation. This is generally a cultural norm rather than a sign of genuine hostility, and visitors should not take it personally.

Religion

Jewish 73.5% · Muslim 18.1% · Christian 1.9% · Druze 1.6% · other 4.9%

Other countries in Middle East, North Africa, Afghanistan & Pakistan

Malta · Morocco · United Arab Emirates

Reference information compiled from the sources cited above and reviewed by hand. Immigration, healthcare and tax rules change and are applied at the authorities' discretion — confirm with the consulate, an immigration adviser or a tax adviser before making plans. Nothing here is tax or immigration advice.

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