Quick Answer: The compulsory retirement age in Israel is 67 for men and women, set by the Retirement Age Law 5764-2004 (Chok Gil Prisha). That is the age at which an employer may lawfully end employment because of age, not the age at which an employee must stop working. A separate entitlement age governs when you may start drawing the National Insurance old-age pension: 67 for men, and for women a figure that is climbing in stages from 62 toward 65 between 2022 and the early 2030s. Retirement is treated as dismissal for severance purposes under Section 11(e) of the Severance Pay Law 5723-1963.

Israeli employers get this wrong in both directions. Some believe a 67th birthday ends the employment relationship automatically, so they stop paying salary and skip the paperwork. Others assume that forcing anyone out on age grounds is illegal discrimination and keep employees on indefinitely while their pension arrangements quietly break. Neither position matches what the Retirement Age Law actually says.

The law is short and does one thing well: it separates the question of when you may retire from the question of when your employer may make you retire. Those are different ages, they move on different schedules, and for women they have been moving targets since 2022. Add the National Insurance income test that applies between retirement age and 70, and a foreign national planning the last decade of an Israeli career has several moving parts to reconcile.

Most retirement disputes turn on procedure rather than principle. The employer was entitled to retire the employee and did it badly, or the employee was entitled to stay and nobody checked the birth year against the right table. Foreign workers and olim who arrive in Israel late in their working lives have a further problem, because the pension that follows retirement depends on an insurance history they may not have.

1. Israel Has Three Retirement Ages, Not One

The Retirement Age Law 5764-2004 defines three separate thresholds. Confusing them is the single most common source of disputes at the Regional Labor Courts.

  • Early retirement age (gil prisha mukdemet), 60 for both sexes. From this age an employee may begin drawing an occupational pension from their pension fund or insurance policy, subject to that fund's rules and at a permanently reduced monthly rate. It carries no employment consequences at all. Your employer cannot use it against you.
  • Retirement age (gil prisha), the age at which entitlement to the National Insurance old-age pension opens and at which an employee who chooses to leave is treated as dismissed for severance purposes. This is 67 for men. For women it is rising from 62 toward 65 under the transitional schedule described below.
  • Compulsory retirement age (gil prisha chova), 67 for men and women alike under Section 4 of the Law. This is the only age at which an employer may lawfully terminate employment on the ground of age and nothing else.

The practical consequence is that an Israeli woman born in, say, 1964 may reach her entitlement retirement age at roughly 63 and a quarter, start drawing a National Insurance pension, and still be legally protected from age-based dismissal for another four years. Employers who terminate her at 63 because "she has reached retirement age" have committed age discrimination, not a lawful retirement.

In Practice — The 62 Trap for Female Employees: A Herzliya software company terminated a 63-year-old female QA manager in 2025, informing her in writing that she had "passed retirement age." Her lawyer filed at the Tel Aviv Regional Labor Court under the Equal Employment Opportunities Law 5748-1988, arguing that the compulsory retirement age under Section 4 of the Retirement Age Law 5764-2004 is 67 for women as well as men, and that her entitlement age had no bearing on the employer's right to dismiss. Because the employer's own termination letter named age as the reason, the burden of proof shifted to the company under Section 9 of the Equal Employment Law. The matter settled before the second hearing for NIS 190,000, roughly 14 monthly salaries, plus a corrected reference letter. Six weeks elapsed between the statement of claim and the settlement conference.

2. The Age Table and the 2022–2032 Transition for Women

Men's retirement age has been 67 since the 2004 law completed its own phase-in. Women's retirement age was 62 for decades, and a 2021 amendment began moving it upward in stages tied to birth month.

The broad shape of the transition, as administered by the National Insurance Institute (Bituach Leumi):

  • Women born up to December 1960: retirement age 62
  • Women born during 1961 to 1963: the age rises in four-month steps, reaching 63
  • Women born during 1964 to 1970: the age rises in three-month steps, reaching approximately 64 years and 9 months
  • Women born from January 1971 onward: retirement age 65

Because entitlement turns on the exact month of birth rather than the year, do not plan a retirement date from the summary above. The National Insurance Institute publishes a retirement-age calculator on its website that returns the precise date for a given birth month, and the answer it gives is the one that governs your pension claim. An error of a single quarter can delay a first pension payment by three months and, if you have already resigned, leave a gap with no income at all.

Note also that the transition affects only the entitlement age. The compulsory retirement age of 67 did not move for anyone.

3. Can an Employer Force You Out at 67?

Yes, but not casually. Section 4 of the Retirement Age Law permits an employer to require an employee to retire on reaching 67, and the Supreme Court sitting as the High Court of Justice upheld the constitutionality of that provision in HCJ 9134/12 Gavish v. The Knesset (2016). The petitioners argued that a fixed cut-off is age discrimination that violates the Basic Law: Human Dignity and Liberty. The Court held that mandatory retirement at 67 serves legitimate purposes, including orderly workforce renewal and predictable pension planning, and left any change to the Knesset.

That is the substantive answer. The procedural obligations are where employers usually fail.

Advance notice

Retirement at 67 is a termination, so the Advance Notice for Dismissal and Resignation Law 5761-2001 applies in full. A monthly-salaried employee with more than a year of service is entitled to one full month of notice. Reaching a birthday is not notice. The employer must give it in writing, and an employer who ends employment on the birthday itself owes payment in lieu.

A genuine hearing

Israeli Labor Court case law, developed through decisions including the National Labor Court's ruling in Weinberger v. Bar-Ilan University, requires an employer to hold a hearing (shimua) before compulsory retirement and to give real consideration to a request to continue working. A blanket policy applied mechanically to every employee turning 67, with no individual assessment of performance, health or the employer's actual needs, has been found defective. The remedy is usually compensation rather than reinstatement, but the sums are not trivial.

Timing the decision

The right to retire an employee on age grounds is exercisable at 67, and an employer who lets years pass and then invokes it may face an argument that the age ground has been waived and the real reason lies elsewhere. In practice, an employer who intends to retire an employee at 67 should open the conversation roughly three to six months in advance.

In Practice — Retiring an Employee at 67 Without Losing a Hearing Claim: A Jerusalem nonprofit with 40 staff planned to retire its bookkeeper on her 67th birthday in March. Its Israeli counsel built a four-step file. In November the executive director sent a letter noting the approaching compulsory retirement age under Section 4 of the Retirement Age Law 5764-2004 and inviting her to a hearing. The hearing was held in December, minuted in writing, and she asked to stay on part-time. In January the board considered the request on its merits, documented a genuine budgetary reason for declining, and issued a formal one-month advance notice under the Advance Notice Law 5761-2001. Employment ended in March with severance of NIS 118,000 released from her pension fund under the Section 14 arrangement, plus NIS 9,400 for 22 unused annual leave days. She filed no claim. The total cost of the process was roughly NIS 6,000 in legal fees against an exposure that comparable Labor Court awards put well above NIS 100,000.

4. What You Are Owed When You Retire

Retirement is a termination event, and the ordinary termination entitlements apply. Four items should appear in the final settlement.

Severance pay (pitzuyei piturim)

Section 11(e) of the Severance Pay Law 5723-1963 provides that an employee who leaves on reaching retirement age is treated as though dismissed. The point matters because employees who resign ordinarily forfeit severance. Retirement is the statutory exception. The calculation is one month's final salary for each year of service, pro-rated for part-years.

Where a valid Section 14 arrangement is in place, the employer's monthly contribution of 8.33% of salary to the severance component of the pension fund replaces the lump-sum obligation. The retiring employee draws the accumulated severance component directly from the fund and the employer owes nothing further. Where the arrangement is defective or was never properly executed, the employee keeps the fund and may still claim full statutory severance from the employer on top of it, which is why the paperwork deserves attention long before anyone turns 67. Our guide to the Section 14 severance arrangement covers the validity conditions in detail.

Unused annual leave

Under the Annual Leave Law 5711-1951, accrued but untaken leave is redeemed in cash on termination (pidyon chufsha). Only leave accrued in the current year and the three preceding years is redeemable. Long-serving employees who banked leave for a decade and expect a payout for all of it are usually disappointed.

Recreation pay and other accruals

Pro-rated recreation pay (dmei havraa) for the final year is payable, as is any unpaid commission, bonus or overtime. Recreation pay for a retiring long-service employee is typically 10 days at the rate published in the relevant extension order.

Release of pension funds

The employer must issue the release forms (tofes 161 for tax purposes and the fund release instruction) so the employee can access the accumulated pension and severance components. Delays here are common and cause real harm, because a retiree with no salary and no released pension has no income at all. Employers should treat the forms as due on the last day of employment.

In Practice — What a Typical Retirement Settlement Looks Like: A production supervisor at a Haifa manufacturer retired at 67 after 21 years of service on a final gross salary of NIS 16,200. His settlement broke down as follows. Severance under Section 11(e) of the Severance Pay Law 5723-1963: 21 years at one month's salary, satisfied through a Section 14 arrangement, with NIS 341,000 accumulated in the severance component of his Menora pension fund. Redemption of 19 unused annual leave days under the Annual Leave Law 5711-1951: NIS 11,800. Pro-rated recreation pay for the final year: NIS 4,500. One month's advance notice, worked rather than paid. His employer issued Form 161 on his last day, and the pension fund began paying a monthly annuity 24 days after the release instruction was submitted. His National Insurance old-age pension claim, filed at the Haifa branch three weeks before his birthday, produced a first payment the month after he turned 67.

5. The National Insurance Old-Age Pension

The old-age pension (kitzvat ziknah) is a separate system from your occupational pension fund, administered by the National Insurance Institute rather than by any private fund. It rests on residency and insurance history, not on your salary level.

Qualifying conditions

The claimant must have been an Israeli resident and must have accumulated a minimum insurance period. The NII accepts several alternative qualifying periods, including 60 months of insurance within the 10 years preceding retirement age, or 144 months of insurance in total. Anyone with a broken residency history should check their file with the NII well before their birthday rather than assume the years add up.

The income test between retirement age and 70

This provision surprises almost every foreign national. Between retirement age and age 70, the old-age pension is subject to an earnings test. Income from work above a monthly threshold, which the NII updates each January and which has recently sat in the region of NIS 8,000 for an individual, reduces or entirely suspends the pension. Pension income from an occupational fund, rental income and investment income are not counted; only earnings from work and self-employment are.

From age 70 the pension is paid unconditionally regardless of income. An employee who plans to keep working until 70 is therefore usually better off deferring the claim, because the NII pays an increment of 5% for each year of deferral, and that increment is permanent.

Amounts

The basic monthly old-age pension for an individual under 80 has recently stood at roughly NIS 1,800, with additions for a dependent spouse and for children. A seniority increment of 2% is added for each year of insurance beyond the first ten, capped at 50% of the basic rate. Low-income pensioners may also qualify for the income supplement (hashlamat hachnasa). Because these figures are updated annually, verify the current rate on the NII website before relying on it for planning.

Nobody should treat the old-age pension as a retirement income on its own. It is a floor. The occupational pension built through the mandatory pension extension order is the substantive part, and our guide to the Israeli pension system for foreigners explains how the two layers fit together.

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6. Working Past Retirement Age

Nothing in Israeli law stops an employee from working past 67. The Retirement Age Law gives the employer a right to end employment, not an obligation to do so, and many employers continue the relationship by agreement.

Several things change once an employee passes retirement age and starts drawing a pension.

National Insurance contributions fall

An employee past retirement age who is receiving an old-age pension is insured only for the work-injury and employer-insolvency branches. Both the employee's deduction and the employer's contribution drop accordingly, which raises net pay for the employee and reduces payroll cost for the employer. Payroll systems do not always apply the change automatically, so check the first payslip after the birthday against our payslip guide.

Mandatory pension contributions may stop

The extension order that imposes mandatory occupational pension contributions applies to employees up to retirement age and excludes an employee already drawing an old-age pension. Continuing to pay into a fund for an employee who has begun an annuity is usually pointless and can create tax complications. Employers should confirm the position with the fund rather than guess.

Every other right survives intact

Sick leave, annual leave, recreation pay, overtime and severance accrual all continue on ordinary terms. An employee who works from 67 to 70 and is then retired is entitled to severance for those three additional years of service, and to a hearing and advance notice at the end of them.

Tax treatment of pension income

Section 9A of the Income Tax Ordinance exempts a portion of qualifying pension income once the recipient reaches retirement age, and the exempt percentage has been increased in stages under Amendment 190. The interaction between a partial pension exemption, continuing employment income and the release of a severance lump sum is genuinely complicated, and a short session with an Israeli tax adviser before signing the Form 161 usually pays for itself.

In Practice — The Income Test That Cost a Retiree NIS 34,000: A retired engineer reached retirement age at 67 and immediately filed an old-age pension claim at his local National Insurance Institute branch. He also accepted a consulting engagement with his former employer at NIS 19,000 per month, comfortably above the NII earnings threshold for that year. The NII paid him for four months before its cross-check against Income Tax records flagged the earnings, suspended the pension, and opened a recovery file for approximately NIS 8,500 already paid. The larger loss was invisible: by claiming at 67 instead of deferring, he forfeited the 5% per year deferral increment on a pension he could not draw anyway while working. Over the three years he ultimately consulted, deferring would have raised his eventual monthly pension permanently by about 15%. A single conversation with the NII branch before filing would have avoided both problems.

7. Age Discrimination Before Retirement Age

Below 67, age is a protected characteristic. Section 2 of the Equal Employment Opportunities Law 5748-1988 lists age among the prohibited grounds and applies the prohibition to hiring, terms of employment, promotion, training and dismissal. Job advertisements specifying an age range, interview questions about retirement plans, and restructurings that fall conspicuously on the oldest staff are all actionable.

Two features of the Law make these claims practical rather than theoretical.

First, Section 9 reverses the burden of proof. Once the claimant shows that they were qualified and that the employer's stated reason does not hold up, the employer must prove that age played no part in the decision. An employer whose own emails or termination letters mention age has effectively conceded the point.

Second, Section 10(a)(1) allows the Labor Court to award compensation of up to NIS 50,000 without any proof of financial loss. That is a floor, not a ceiling: awards for wrongful dismissal, lost earnings and the value of forfeited pension accrual are added on top, and a claimant dismissed at 63 who would otherwise have worked to 67 can point to four years of lost salary and pension contributions.

Claims go to the Regional Labor Court with jurisdiction over the workplace, with appeal to the National Labor Court in Jerusalem. The limitation period is seven years under the Prescription Law 5718-1958, though claims filed years after the event lose practical force. Our guides to employment discrimination in Israel and to bringing a Labor Court claim cover the procedure.

In Practice — Age Discrimination in a Restructuring: A Petah Tikva logistics company made nine employees redundant in a 2024 restructuring. Seven were over 60; the workforce as a whole skewed considerably younger. Three of the dismissed employees filed jointly at the Regional Labor Court under the Equal Employment Opportunities Law 5748-1988, relying on the statistical pattern rather than on any explicit statement. Under Section 9 the burden shifted to the employer, which produced performance reviews that had rated all three as satisfactory in the preceding cycle and could not explain the selection on any neutral criterion. The court awarded each claimant NIS 45,000 under Section 10(a)(1) without proof of damage, plus wrongful-dismissal compensation calculated on lost salary and pension accrual, bringing the total for the three claims to roughly NIS 420,000. The proceedings ran 16 months from filing to judgment.

8. Foreign Nationals and Olim Approaching Retirement

Israeli labor law is territorial. A foreign national working in Israel has the same rights under the Retirement Age Law, the Severance Pay Law and the Equal Employment Opportunities Law as an Israeli citizen doing the same job. Nationality changes nothing about severance, notice or protection from age discrimination.

Social security is where the position diverges sharply.

Non-resident foreign workers

Foreign workers employed on B/1 permits and not resident in Israel are insured through the National Insurance Institute for work injury, maternity and employer insolvency only. They do not accrue old-age pension rights no matter how many years they work. What they do accrue is the occupational pension mandated by the extension order, and that money belongs to them. It can be withdrawn or transferred on leaving Israel, subject to tax, as explained in our guide to pension withdrawal for expats leaving Israel.

Where a totalization agreement applies

Israel has bilateral social security agreements with a number of countries, mostly in Europe, which can prevent double contributions and in some cases allow insurance periods in the two countries to be aggregated toward a pension. Whether your home country has one, and what it actually covers, varies considerably. See our guide to Israel's social security totalization agreements.

Olim who arrive at or after retirement age

A new immigrant who makes aliyah at or after retirement age has no Israeli insurance history and cannot meet the qualifying periods for an ordinary old-age pension. For this group the National Insurance Institute administers a special old-age benefit funded by the Ministry of Finance, paid at a rate comparable to the ordinary pension and subject to an income test. Registration with the NII should happen in the first weeks after arrival, alongside the health-fund registration handled at the Ministry of Interior and Ministry of Aliyah and Integration.

Olim who arrive mid-career

Someone who makes aliyah at 50 and works to 67 accumulates 17 years of insurance, comfortably past the 144-month threshold, and qualifies for an ordinary old-age pension with a modest seniority increment. The occupational pension built over the same 17 years will be small relative to a full Israeli career, which is the argument for consolidating foreign pension entitlements rather than abandoning them. Foreign pension income received in Israel has its own treatment, covered in our guide to foreign pension tax for new immigrants.

In Practice — A French Oleh Retiring at 67 in Israel: A French national made aliyah at 54 and worked for an Israeli pharmaceutical company for 13 years, retiring at 67 on a final salary of NIS 24,000. His Israeli entitlements: severance for 13 years satisfied through a Section 14 arrangement, worth NIS 288,000 in his pension fund; an ordinary National Insurance old-age pension, since 13 years of insurance exceeds the 144-month qualifying threshold; and a seniority increment of 2% for each of the three years beyond the first ten. He also held 26 years of French pension entitlement from before aliyah. Because Israel and France have a bilateral social security agreement, his Israeli attorney coordinated with the NII and the French CNAV so that both pensions were claimed without either administration treating the other's years as a disqualification. He filed both claims four months before his birthday. The Israeli pension began the month after he turned 67; the French pension took eight months to process.