About Author
Lois Vallely
July 30, 2025
Welcome to Hoxton Wealth, the new home of Hoxton Capital
Retirement Planning • July 30, 2025
U.S. Expats: Are Your Retirement Savings in the Right Currency?
Hoxton Blog • U.S. Expats: Are Your Retirement Savings in the Right Currency?
If you’re planning to move – or have already moved – away from the U.S., you’ve probably thought about how to make your U.S. retirement assets as tax efficient as possible. You may also be considering where your investments should be held.
But have you considered the currency risks of keeping a portion of your assets in U.S. dollars?
For many people, this is an afterthought. But it’s actually a key part of the retirement planning puzzle for U.S. expats.
Exchange rates between the U.S. dollar and foreign currencies can vary widely based on things like global economic conditions, political instability, interest rate changes and market speculation. These fluctuations can have a direct impact on your cost of living, savings, income and investments.
Think of it like this: if you lived in the U.S. and planned to stay there for life, and someone suggested you set up a retirement account in euros, you’d think they were mad. It would be pointless – you’d just be adding currency risk to your retirement for no good reason.
Yet many people who’ve lived internationally end up with retirement accounts in a currency that no longer matches where they live or plan to retire. They do nothing about it – either because the timing never feels right, or the exchange rate isn’t in their favour.
But currency risk can be substantial. Do you really want to stack that risk on top of the investment risk you’re already taking? You might get lucky – but that’s not a strategy.
The goal should always be to have your retirement assets in the currency or currencies you’ll actually spend in. For example, if you live in the UK and plan to retire there, it wouldn’t make sense to hold a pension in dollars. That could be adding unnecessary risk. That said, while holding assets in a different currency can introduce risk, the suitability depends on your specific circumstances, goals, and tax position.
If your spending is in sterling and your investments grow by 10%, you’re 10% better off. But if the market is up 10% and the pound is down 10%, your spending power is flat.
That’s why it’s important to build a plan around the currency you’ll need in retirement – and this is where an experienced international financial planner can make a real difference.
When Currency Moves, So Does Your Wealth
In the past few weeks, the U.S. dollar has dropped significantly in value. If you live outside the U.S. but hold much of your wealth in dollars – which you don’t intend to spend in dollars – you need to think carefully about how and when to convert that wealth.
If you accessed your retirement savings today versus six months ago, you may have reduced your spending power due to the dollar’s depreciation. This is an important consideration when deciding to live abroad.
Most retirees are already focused on managing investment performance. The last thing you need is currency movements further undermining your savings.
If markets underperform and you’re withdrawing funds, your portfolio could shrink faster than expected. Add currency losses on top, and the amount you can withdraw – and how long it lasts – could be cut significantly.
That’s why it’s vital to position your assets to match your future spending needs. Get that wrong, and your savings may not go as far as you’d planned.
Managing the Hidden Costs of Currency Fluctuations
Even small changes in exchange rates can really add up over time. Let’s say you’re planning to send money back to the U.S. or even planning to move back eventually – those shifts could chip away at the value of your savings once they’re converted back to dollars.
It’s something to keep in mind, especially if you’re juggling finances in two countries, like many expats do.
And don’t forget about taxes – currency gains or losses may need to be reported on your U.S. tax return, which can make things more complicated.
Currency volatility also complicates financial planning, making it difficult to predict future costs or returns.
Those with ongoing financial obligations in the U.S., such as loan payments or property taxes, may face added strain if exchange rates move unfavourably.
To manage this risk, it’s important to monitor exchange trends and diversify assets across currencies.
It’s a good idea to seek professional financial advice in these instances.
Our advisers can help U.S. expats navigate the challenges of cross-border retirement planning.
We can help make sure your investments are aligned with the currency you plan to spend in, so you’re not unnecessarily exposed to exchange rate risk that could erode your returns.
By tailoring your retirement strategy to your long-term residency plans, we help protect your spending power and offer clear solutions to manage both investment and currency risk.
Whether you’re still building your wealth abroad or approaching retirement, our advisers can help secure your financial future – wherever you choose to live.
Speak to a trusted Hoxton Wealth adviser today.
Disclaimer: This article is intended for informational purposes only. It does not constitute financial, legal, or tax advice. All investments carry risk, including the potential loss of principal. Currency fluctuations may impact the value of your investments. Please consult with a qualified adviser licensed in your jurisdiction to assess your specific financial situation. Service availability from Hoxton Wealth may vary by location. Please contact us to be directed to the appropriate entity based on the services offered in your region.
How Can We Help You?
If you would like to speak to one of our advisers, please get in touch today.
Contact Hoxton Wealth
Contact us today to discover how Hoxton Wealth can help you achieve your financial goals. Together, we can build a brighter financial future.
