Many Singaporeans head into retirement with some money held in foreign currencies. It might be a USD brokerage account, Australian dollar deposits, Malaysian property, or assets built up during years working abroad.
In the accumulation years, holding a mix of currencies often makes sense. In retirement, it introduces some complications worth thinking through carefully.
Your wealth moves with exchange rates
When your day-to-day expenses are in Singapore dollars, assets held in foreign currencies mean your effective wealth goes up and down with exchange rates regardless of how the underlying investment is actually doing. A USD portfolio that grows 5% in a year might leave you worse off in SGD terms if the dollar weakens over the same period.
For retirees drawing on these assets regularly, currency movement is not just a paper figure. It directly affects how much hits your account each month.
The quiet cost of converting
Every time you convert foreign currency to SGD for living expenses, you lose a little to the exchange rate spread. Banks and brokerages build their margin in. It does not feel like much each time. But over a retirement that spans decades, it adds up quietly and persistently.
Too much in one currency
Some retirees find that a large portion of their assets sits in one foreign currency, often USD given the dominance of US markets in global portfolios. If that currency weakens meaningfully against the SGD over 20 or 30 years, the impact on purchasing power can be significant and hard to recover from.
The case for anchoring in SGD
SGD assets have a natural advantage for Singapore-based retirees. No conversion needed, no spread, and the SGD has historically been one of the more stable currencies in the region. Where possible, building your retirement income around SGD instruments removes one major variable from your plan and keeps things simpler.
This does not mean getting rid of all foreign currency exposure. It means being deliberate about how much you hold, why you hold it, and how you plan to draw on it when the time comes.
If foreign currency assets form part of your retirement picture, it is worth reviewing whether that structure still makes sense given where you are today.
Something to consider
If this raised questions about your own setup, feel free to reach out.
Worth a conversation