INDIVIDUAL RETIREMENT ACCOUNT

If you wish to manage your education and provident funds, you can do so through an Individual
Retirement Account (IRA).

What is an IRA?
In January 2010, the Ministry of Finance approved the implementation of a personal provident
fund (IRA – Individual Retirement Account), which allows for self-managed pension and
provident savings.
The IRA is an innovative and advanced tool that, for the first time, enables you to take control
over the management of your long-term savings (provident funds and advanced study funds).
You are responsible for making the investment decisions regarding the management of your
funds, similar to practices in the U.S. and Europe, where the IRA is the standard method for
managing savings.

What is Amendment 190?
Amendment 190 is a provision that allows you to deposit liquid funds into a provident fund,
taking advantage of its benefits, which include: reduced tax in certain scenarios,
self-management, and tax deferral.

Minimum deposit of ₪500,000 and maximum deposit of ₪5.95 million.
Funds can be withdrawn after age 60 in one of two ways:
- A lifelong monthly pension, fully exempt from tax-
- A one-time withdrawal, subject to 15% nominal tax on profits
Tax payment can be deferred until the time of withdrawal
In case of the account holder’s death before age 75: their heirs may withdraw funds tax-free
In case of death after age 75: their heirs may choose between a reduced 15% tax on withdrawal or deferring tax by depositing the inheritance into a pension-oriented provident fund for future withdrawal.