What is behind amendment 190
Amendment 190 to the Income Tax Ordinance allows, in certain cases, older savers to deposit money in קופת גמל and manage it as pension savings.
The issue is mainly relevant around the age of 60 and over, but age alone is not enough. You need to check compliance with the conditions, existing allowance, method of withdrawal and tax result.
Why is this not an off the shelf product?
Different people can get a completely different result from the same action. A person with a sufficient pension, a low need for liquidity and inheritance goals may think differently from a person who needs money in the coming years.
In addition, an inappropriate withdrawal or failure to meet the conditions can change the taxation. That's why you shouldn't rely on a general title like 'reduced tax' without a personal check.
What should you check?
Before making a deposit, it is important to check age, pension sources, marital status, beneficiaries, management fees, investment track and liquidity. In many cases, a combination of a pension consultant and a tax consultant is required.
Patch 190 can be a good tool when it fits the personal image. It is less suitable when looking for a quick solution without understanding the consequences.