Okay, so...
I'm also Israeli and 33 yo.
And I also contemplate relocating to a different country from time to time. Sometimes for the money and opportunity, sometimes because of the adventure, sometimes to get away from it all. Oh, and the possibility also crossed my mind when I ran down the stairs to the bomb shelter, carrying my baby daughter, sirens wailing and Iron Dome interceptions lighting the night sky. Damn. But that was like two years ago. Ancient history, eh?
Anyways,
I went back and checked my 2015 bank and IRS statements just for you:
Me: gross 108 K$/yr, net 75 k$. (side note: I'm an Engineer and that's a 10th percentile salary in Israel.)
DW nets 10-20 K$/yr, it fluctuates.
We saved about 23 K$ out of after-tax income. (27%)
I have the same mandatory 5.5% with 12% employer match contributions as everyone.
I also have the 2.5% with 7.5% match "Study Fund" thing going.
So - overall around 55% saving rate.
Side note for non - Israelis: every salaried worker contributes a mandatory 5.5% (you can increase it up to 7%) to his retirement fund accessible at age 60 (with tax breaks and limits etc.). Employer match is a mandatory 6% to the retirement fund, and another mandatory 6% (can be increased to 8.33%) to a severance fund, which is pretty much the same, but is accessible when you're fired (and also when you quit).
There's also a "Study fund" which is voluntary (your employer doesn't have to offer it), where you contribute an extra 2.5% with 7.5% match. This has all the tax breaks etc. but becomes accessible after 6 years of contributions. Delicious.
This is with a toddler in private day care, and another one on the way.
While renting in uptown Tel Aviv and owning a car.
I'm on track to FI around 40 yo, with the help of above market rate returns (stock picker, guilty as charged) and a windfall expected to come in this year from DW's family. without those I guess I could still be FI before 50.
Before the punches, kudos to you for not buying real estate with a 3.2% gross return (bubble?). Stay strong!
Also, there's a positive ending, so stay tuned.
So, facepunch time:
Taxes: Taxes in Israel are high, but come on. My Overall Income Tax rate is 16.5%. Marginal Tax rate: 34%. It's true that i got a 27% after-ta savings rate. It doesn't mean a 73% tax rate.
Transportation: True, public transportation isn't great, and doesn't work on Saturdays and holidays. Still. We enjoy great biking weather. I bike to work, and drop off DD at the daycare. Try it. You can own a cheap car for weekends / long trips / heavy hauling.
Retirement funds management: There's a ton of providers, and you can switch between them whenever you wish. I work for BigCorp, so we got good terms (1% fee on deposits, 0.2% on the balance for a "pension fund"). I just got offered something like 0% and 0%, and I'm gonna switch. Work the phone and don't pay extra. Also, The ministry of finance just declared there's going to be a tender (is that the word?) to select cheap management companies as default providers for new employees. You will be able to join them soon, i think this September.
link (Hebrew):
http://mof.gov.il/hon/Pension/pension/Pages/DefaultFunds.aspxRetirement funds: If you're worried about fees, see above. If you're worried about Actuary re-balance (youngsters paying for old people) - you can switch to a "Gemel fund" and your money is yours (higher fees, around 0.5% of the balance). If you have a retirement insurance policy - transfer the balance to a pension fund, like yesterday.
Rent and COL: Center of Tel Aviv = Very HCOL. The rest of it is HCOL to MCOL, depending on location. There's a decently priced apartment in biking distance from every job in the city. Wanna live in the city? Get a roommate. Or a cheapo apartment. And bicycles. Also, there's jobs and lives outside of Tel Aviv. most people live there. I myself am moving to a different town with my job next year.
Attitude: Seems a bit fatalist to me. I suspect you read way too much Ynet / Calcalist. I would suggest the Low Information Diet...
Tips:
Relocation: You don't have to do it through your workplace. You can either marry a local or find a (required) job at your destination. People do it all the time. Look for jobs online, interview over skype, and fly over if necessary. If your field is not "hot" enough to grant you a work permit, start learning some skills. I suggest programming if you have any technical inclination.
Lowering your tax burden : If you invest your money and pay dividend / monetary gains tax, you can save a lot by registering as a business owner and opening a BO Study Fund. PM me for details.
"Study fund": If your employer offers it, go for it. If not, ask for it, and consider switching jobs over this. It's a 7.5% bump, tax free and pretty liquid. These also have IRAs.
Retirement abroad: Totally legit. There's a big ex-Israeli retirement community in Costa Rica. Also in Thailand. Save here, in an almost-first-world-country, and retire there to live like a king!
The post turned out quite long... I guess I have a lot to say on the matter :)
Feel free to PM me for further details.