How to take back USD from IBKR during retirement?

“Plans are of little importance, but planning is essential.” ― Winston Churchill, former British Prime Minister

Recently I received an email from a reader asking me about my plan after retirement. Since all my investments are in USD ( in IBKR) and SGD ( in Singapore bank account), how do I plan to transfer this money back to Malaysia after retirement?

I have thought of this question for months. I am aware of the possible problems holding these two currency after retirement. It will be a total disaster if MYR appreciates against SGD and USD in future because my portfolio value will drop significantly.

Of course it is a smart move if you can invest in a portfolio which is denominated in the currency you plan to use after retirement. Unfortunately I couldn’t find a good MYR-denominated investment except EPF/KWSP.

Plan After Retirement

If the Trinity Study is right, I can basically survive with 4% withdrawal rate from my portfolio for at least 30 years.

I invest in distributing ETFs, my USD-denominated portfolio pays me 1.2-1.5% of dividends yearly. My SGD-denominated portfolio which is mainly REITs and bank stocks pays me another 4% per year. I am hoping my MYR-denominated EPF/KWSP can pay another 4% dividends annually, so theoretically I might have the privilege of not selling single unit of my whole holdings after retirement.

Once I receive my dividends in USD, I shall convert USD to SGD in IBKR platform ( it is the cheapest way and has the best rate) and withdraw them to my Singapore bank account. Therefore at the end of the day, I only need to think of a way bringing back SGD to Malaysia during my retirement days.

The following alternatives should work if I am right. You can read how to transfer money from IBKR back to Malaysia/ Singapore using conventional way HERE ( withdraw to a bank).

Bring Back Hard Cash From Singapore

The safest way will be flying to Singapore on AirAsia ( hopefully everyone still can fly then and AirAsia is still kicking!) and take back SGD in cash! For your information, you can bring up to SGD20,000 out of Singapore every time you leave the country. While I am writing this, SGD20k is equivalent to MYR 61891. For a minimalist like me, MYR 61k per annum is more than enough.

If you are worried about being stopped by immigration officer at the airport, you can travel to Singapore twice a year to bring back SGD10k per trip and hopefully AirAsia return ticket to Singapore from Penang is still less than MYR100 then.

Use HSBC Premier Account

If you have a HSBC premier account, you can use HSBC Global View and Global Transfer service to move your money from one country to another seamlessly within seconds. You have to ask your RM ( Relationship Manager) to help you to open a HSBC Singapore account so that dividends in future can be deposited there.

Unfortunately, opening a cross border bank account is not easy nowadays. I was asked 1001 questions 4 years ago when I wanted to open a HSBC Singapore account.

My advice to you, think of a good reason before applying. The best excuse will be funding your kid to study in Singapore or else be prepared to answer questions posed by the HSBC officer which might take up to 1 hour.

We Malaysians all know the past events that lead to this. You know, Singapore banks are always suspicious every time a Malaysian wants to open an account with them especially if you have unexplained source of income.

Once the Global view in your HSBC premier account is up, you can easily transfer your SGD to MYR with just a few computer clicks.

Use Third Party Money Transfer

Yes, you might want to use Wise or Instarem to transfer back your SGD to MYR during retirement. Or you can use your Singapore bank to TT SGD back to MYR. You can look at the forex rates of SGD to MYR on 21/7/2021 as below,

1) Instarem

2) Wise

If you decide to use DBS remit to transfer SGD to MYR, the exchange rate is only 3.0541!! You lose out almost MYR200!! I still believe third party money remittance is a better choice compared to banking institutions.

Yes, buy DBS shares if you can but never use their service of sending money to any country including Malaysia!

Spend Using Your Debit Card

The easiest way of moving your SGD back to Malaysia will be using ATM/Debit card issued by Singapore banks. If you have NETS logo on your Singapore debit card, you can use the card to buy stuff in Malaysia. Network for Electronic Transfers or more commonly known as NETS; is a Singaporean electronic payment service provider founded in 1985 to establish the debit network and drive the adoption of electronic payments in Singapore.

From 2019, Singaporeans can start using their NETS ATM/Debit card to pay in more than 7,400 points across tourist and retail hot spots in Johor Baru, Melaka, Kuala Lumpur and Penang. Singaporean NETS debit card is equivalent to Malaysian version of MyDebit.

I used my NETS debit card with Visa Pay wave to pay for my purchase of MYR 21.30 in a grocery shop in Pulau Tikus, Penang recently. The final bill came back as SGD 7.15 ( exchange rate of SGD1:MYR 2.979). It is convenient but not the cheapest way.

Exchange with Your Friends

Yes, this is possible if your friends need SGD. A lot of Malaysians need SGD due to various reasons- kids’ education, business, healthcare, retail purchase etc. You can swap your SGD with your friends for MYR. Certainly it is a win-win situation bypassing the banks.

Take the average of selling and buying forex exchange rates of a bank and both of you and your friend end up as happy customers.

Conclusion

These are the five ways of bringing back your money in IBKR when you retire. I still think having a Singapore bank account is essential. If you do not have a Singapore bank account, moving back USD in IBKR through Malaysians banking institutions is a costly affair.

I might be wrong and certainly welcome your input on the best way of moving money in your foreign brokerage accounts back to Malaysia.

Please post your suggestions and comments. Thank you.