U.S. retirees hit hard by dollar's fall
By Raphael Ahren Haaretz Last update - 05:52 01/08/2008
www.haaretz.com/hasen/spages/1007651.html

When Laura Sanderson fulfilled her lifelong dream of moving to Jerusalem she
did not imagine that she would have to part from her grandmother's gold
bracelet in order to make ends meet. Two years ago she asked her immigration
counselor whether she would be able to live off her Social Security old-age
allowance from the United States, which would be her sole income. "He said
you'll get along fine," she recalled in a recent interview. "He didn't know
the dollar was going down. Now it's a big squeeze." In addition to selling
heirlooms such as the bracelet ("I was happy I had it because I needed the
money"), Sanderson is now considering returning to the workforce at the age
of 72.

The downturn of the exchange rate, from over NIS 4.6 to the dollar in 2006
to only around NIS 3.4 now, has caused financial woes to many American
companies and organizations who operate in Israel with budgets that are in
the U.S. currency. But it also hurts immigrants from the U.S. who rely on
dollar incomes. For retirees living off their Social Security benefits the
pinch is particularly hard.

"Up until not so long ago, immigrants were able to come with a fixed dollar
income, even a reasonably low Social Security income, and enjoy a decent
quality of life," said Josie Arbel, director of absorption services at the
Association of Americans and Canadians in Israel (AACI). "That has
definitely changed. There are people who are really struggling now."

So far there is no reports of Americans planning to return, but a number of
potential immigrants are delaying their move because they don't want to sell
their houses when the dollar is so weak, Arbel said.

The rent squeeze

Among the Americans already here, the number of complaints has risen in
number and intensity. "The dollar slips so badly that I find it difficult to
live on what is left," Ruth Krammer, an 80-year-old widow whose only income
is a pension from the States, wrote in a letter to AACI. Krammer, who lives
in a small community in the north, near Nahariya, told AngloFile that her
landlord is a decent man but has now asked for a rent increase. "It is
getting to the point where it is difficult for me to purchase food and cover
my expenses," the letter continued.

AACI granted her an emergency loan to deal with her immediate financial
problems, Arbel said, adding that housing constitutes the biggest problem of
the current dollar crunch: When landlords charge rent in shekels, Americans
with a dollar income have less money in their pockets due to the drop in the
exchange rate. Landlords who peg the rent to the dollar, on the other hand,
are forced to raise the rent to cover their costs for utilities such as
electricity and water, which are paid for in shekels.

For most American immigrants, however, the situation is not yet drastic.
Because only a relatively small group came to Israel with only their Social
Security allowances, most can weather the storm, according to Alan Deutsch,
an accountant specializing in Americans living in Israel.

"They might have to cut down on some luxury items, they might go out less or
not buy a new car, but the dollar is not yet crashing. Only if its descent
continues for much longer it'll have a bigger impact," Deutsch said.

Potential immigrants are advised not to rely exclusively on Social Security
benefits, which are based on earnings averaged over a worker's lifetime.

"It is very, very difficult to plan immigrating to Israel when your sole
income is Social Security from North America," Daniel Oberman of the
immigration advocacy group Nefesh B'Nefesh said. "We would seriously suggest
that immigrants find alternative sources of financial support."

But even those who did plan ahead are feeling the squeeze. Haim Lerner, for
instance, who lived in New York and Montreal before moving to the Tel Aviv
suburb of Ganei Tikva 10 years ago, receives money from four different
sources: U.S. Social Security, Quebec Pension Plan, the Canadian Old Age
Security and his own personal pension plan. Yet, the 74-year-old says he has
been "very adversely" affected by the weak dollar. "I'm getting 3,000
shekels less than a year ago at this time," Lerner told AngloFile. Although
he still receives about 8,000 NIS per months, the unfavorable exchange rate
has affected his lifestyle. "I cut back on my activities such as trips and
concerts, and I tried to cut back on my purchases in the supermarket," he
said. "I don't eat as much steak as I used to."

However, Lerner also noted that he is still not "poverty stricken" and that
he cannot complain about the amount of money he does receive. Even
Sanderson, who faces a $200 rent increase this August, doesn't despair. "I
don't live high, but I certainly am not uncomfortable," said the
72-year-old, who lives alone in an old apartment that is bitterly cold
during the winter because it cannot be heated properly. She noted that in
the last two weeks the dollar increased slightly, from less than NIS 3.25 to
almost NIS 3.5. "If the dollar went down any more, I'd be very
uncomfortable. But I'm optimistic that it's going back up again," Sanderson
said.

Where to go

Retired U.S. citizens who immigrated to Israel are entitled to Social
Security benefits. Eligibility depends on a worker's age at the time of
immigration, the number of years he or she was employed in the U.S. and
other criteria. Following an agreement between Israel and the United States,
these monthly payments are exempt from income tax.

For more information contact: Social Security and Federal Benefits Unit of
the United States Embassy 71 Hayarkon St., Tel Aviv (03) 519-7575

www.usembassy-israel.org.il

Association of Americans and Canadians in Israel

11 Pinsker St., Jerusalem (02) 566-1181 www.aaci.org.il

The Israel Association of Senior Citizens 12 Mendelstam St., Tel Aviv (03)
546-5457 www.sixtyplus.com.