The latest Social Survey from Israel’s Central Bureau of Statistics presents a reality that can no longer be ignored: a dignified old age in Israel is not determined at retirement. It’s shaped over an entire lifetime. When only 54% of seniors receive pension benefits – and just a quarter of Arab seniors do – it becomes clear that economic inequality does not begin at 67. It begins in education, employment, wages, and long-term savings.
The survey shows that only 23% of seniors rely on non-pension savings, and just 13% receive income from assets such as rent. Most older Israelis reach retirement without any real financial cushion. When their pension is low, there is simply nothing to offset it. Many depend on their children, struggling with Israel’s rising cost of living. This is not dignified aging; it is a system of dependency.
New research from the Shoresh Institution links today’s income disparities among seniors to the life paths that preceded them. Employment among Israelis aged 65+ has risen in the past decade – from 15% to 30% among men and from 5% to 15% among women – but the gains are concentrated among stronger groups. Around 35% of Jewish men in this age bracket are employed, compared with only about 20% of Arab men. The gaps among women are even more severe: only 1–3% of Arab women over 65 participate in the labor market. Even among those who do work, inequality persists: over 70% of older working men are employed full-time, compared with roughly 40% of women, with clear implications for pension savings.
The strongest predictor, however, is education. According to the Shoresh study, around 40% of seniors (age 65+) with 13 or more years of schooling work at age 65+ at rates of 40%, while those with only primary education are below 20%. These differences are structural. People who enter the labor market with skills and education enjoy stable careers, higher wages, and pension accrual. Those without them reach retirement with no economic safety net. Income data reflect these divides: senior couples earn over NIS 9,000 per standard person, compared with about NIS 8,000 for senior men living alone without a partner and about NIS 7,000 for senior women living alone without a partner.
Israel’s pension system assumes workers will save enough over time. But the reality is very different. Many Israelis cannot save at meaningful levels, work in jobs that do not allow for long-term accumulation, or are forced into early retirement. A debate about the “right” retirement age is important – but it misses the real issue. The question is how to ensure people arrive at retirement age with the financial foundation necessary to live in dignity.
Early age investment is needed to narrow the Gap
This requires a strategy: investing in education that narrows gaps from an early age; promoting stable employment and fair wages; strengthening the safety net for pension savings; and offering support to those who reach old age without assets, savings, or family assistance. This is not simply social policy – it is long-term economic planning.
Israel is approaching a demographic turning point. The number of seniors in the coming decade and the inequalities will expand unless addressed early. Inequality does not disappear at retirement. Those who are not given the tools early in life will reach their later years without a safety net – and the entire society will bear the cost.
The writer is vice president of the Shoresh Institution for Socioeconomic Research and a professor at the Hebrew University of Jerusalem.