As of 2026, mandatory Israeli pension deposits are 18.5% of the covered wage — 6% employee, 6.5% employer and 6% severance — and the retirement pension is the accumulated fund divided by the annuity conversion factor (about 200 for illustration); a 30-year-old earning 15,000 ₪ with 100,000 ₪ already saved, at a 4% annual return, reaches about 3.25 million ₪ by 67 — a pension of about 16,269 ₪ per month, plus the 1,838 ₪ old-age pension from Bituach Leumi.
How is it calculated?
Each month, 18.5% of the covered wage goes into the pension: 6% from the employee, 6.5% from the employer and 6% to severance (many employers deposit 8.33% severance — a fuller accrual). The statutory duty applies at least up to the average national wage (13,769 ₪ in 2026), but common practice is to deposit on the full gross salary. Deposits join the existing accrual and compound at the assumed return until retirement age (67), and the monthly pension is then the fund divided by the annuity conversion factor.
In the example: a 15,000 ₪ salary → a 2,775 ₪ monthly deposit. A 30-year-old with 100,000 ₪ saved and a 4% annual return reaches about 3.25 million ₪ by 67; dividing by a factor of 200 gives a pension of about 16,269 ₪ per month, and with the old-age pension (1,838 ₪ for an individual) — about 18,107 ₪. Important: the 4% return and the 200 factor are illustrative assumptions only; actual results depend on fund returns, management fees and the actual annuity factor at retirement.
Frequently asked questions
What is the annuity conversion factor (mekadem hamara)?
The conversion factor is the number the accumulated fund is divided by to get the lifelong monthly pension. A typical factor is about 200, and in practice it ranges from 167 to 205 depending on the fund, age, sex and survivors' track. For example: a fund of about 3.25 million ₪ with a factor of 200 gives a pension of about 16,269 ₪ per month.
Is 18.5% deposited on the full salary?
The statutory duty under the extension order applies to the wage up to the average national wage — 13,769 ₪ in 2026 (the lower of the wage and the ceiling). In practice, most employers deposit 18.5% on the full gross salary, and that is what the calculator assumes.
How much does the Bituach Leumi old-age pension add?
The old-age pension (kitzvat ezrach vatik) from Bituach Leumi is 1,838 ₪ per month for an individual (base amount, 2026), paid on top of the pension-fund annuity. In the example — a fund pension of about 16,269 ₪ — the total reaches about 18,107 ₪ per month.
How much pension will I get on a 10,000 ₪ salary?
On a 10,000 ₪ monthly salary, total pension deposits come to about 18.5% — 1,850 ₪ per month (employee, employer, and severance portions combined). Saving at that rate from age 30 to 67, at an average annual return of 4%, builds a fund of roughly 1.85 million ₪. Divided by a conversion factor of 200, that yields a pension of about 9,385 ₪ per month, on top of the National Insurance (Bituach Leumi) old-age pension of 1,838 ₪.
Can I retire before age 67?
Yes — by law, pension fund payouts can begin as early as age 60. The monthly pension is significantly smaller, though: fewer years of deposits, more years of payments, and a higher conversion factor. The official retirement age for men in Israel is 67.
What happens to my pension when I change jobs?
The pension fund is personal and registered in your name — it does not belong to the employer and moves with you from job to job. When starting a new job, giving the new employer the details of your existing fund keeps deposits flowing into the same fund, and older funds can also be consolidated into one. Savings split across several funds can mean paying management fees more than once.
This calculation is a general estimate for illustration only. It does not constitute tax, pension, or investment advice, nor a substitute for personal advice from a licensed professional, and should not be relied on for decisions.
