Retiring in Portugal is a dream for many, and it’s easy to see why. The Annual Global Retirement Index 2023 recognized Portugal as the best place to retire, attracting foreign retirees with its inviting lifestyle and benefits.
Portugal provides a comfortable place to live with an affordable cost of living and a good public healthcare system that meets basic health needs. The country is also known for its safety, making it a top choice for many, especially compared to other European countries.
Portugal offers several visas to help newcomers, including the Golden Visa and the Portugal Retirement Visa (Passive Income Visa). Many retirees can also access social security benefits, which improves their financial peace of mind.
If you're thinking about retiring abroad, this article will give you essential information on retiring in Portugal, including:
- Insights on why retiring in Portugal is a good option
- Who can retire in Portugal
- How to retire in Portugal (Visas options)
- What to expect when retiring in Portugal
- The best places to retire in Portugal
- How to open a Portuguese bank account as a retiree
- Tax implications for expat retirees, and more.
Why retire in Portugal?
Retiring in Portugal comes with numerous advantages that make it a desirable choice. A key draw is the low cost of living, allowing retirees to maintain an affordable lifestyle without financial strain. This enables you to enjoy a rich retirement filled with activities and exploration.
Portugal also boasts a highly regarded public healthcare system, providing quality medical care that gives retirees peace of mind. The country's reputation for safety further enhances its appeal, creating a welcoming atmosphere for those looking to settle down.
For expat retirees, the diverse range of places to live—from the lively city center to tranquil coastal areas—adds to the allure. The warm climate and friendly culture make it easy to feel at home.
With these benefits, it’s no surprise that Portugal is seen as a top European destination for those wanting to retire abroad. Whether you’re after relaxation or adventure, Portugal offers something for everyone.
The Benefits of Retiring in Portugal
Retiring in Portugal comes with many advantages that make it an appealing choice. Here are some key benefits:
- Visa-free travel to the Schengen Area: Living in Portugal allows you to enjoy visa-free travel throughout the Schengen Area. This means you can easily visit other European countries without hassle. Whether it's a quick trip to Spain or a longer stay in Italy, having this access enriches your retirement experience.
- EU citizenship: If you become a Portuguese citizen, you can live and retire in any EU country. This opens up more options for travel and living, making it easier to explore different cultures and places across Europe.
- Great weather: Portugal is known for its great weather, featuring plenty of sunshine and mild winters. The warm climate is perfect for outdoor activities, especially in regions like Southern Portugal, where the stunning beaches and nature are enjoyed all year round.
- Relaxed pace: Portugal's lifestyle is relaxed and laid-back, ideal for retirees looking for peace and tranquility. This slower pace helps reduce stress and allows you to enjoy your retirement years without feeling rushed.
- Affordable cost of living: Portugal is one of the most affordable European countries. The low cost of living means your money goes further, allowing you to enjoy a comfortable lifestyle. You can enjoy dining out, shopping, and leisure activities without worrying too much about expenses.
- Affordable real estate prices: Real estate in Portugal is reasonably priced compared to many major cities in non-EU countries. Whether you're interested in a cozy apartment in the city center of the Portuguese capital or a peaceful home in the countryside, there are many options that fit various budgets.
- Warm and welcoming locals: Portugal feels like home to the warm and welcoming locals. The friendly nature of Portuguese citizens helps newcomers settle in easily, creating a sense of community. This makes it enjoyable to connect with others and make new friends.
- Thriving food, wine, and art culture: Portugal has a rich food and culture scene. You can indulge in fresh seafood and delicious Portuguese cuisine. The country is also famous for its Fado music, vibrant festivals, and a strong love for soccer. There’s always something happening, making your retirement lively and full of experiences.
- Access to healthcare and Social Security benefits: Portugal's public healthcare system is considered good and affordable. This means you can access necessary medical services without high costs. Plus, many retirees can receive Social Security benefits, adding financial support during retirement. This combination ensures you can focus on enjoying life without health-related worries.
Who can retire in Portugal?
Depending on where you're originally from, you might need a visa and specific documents to reside in Portugal.
European Union citizens
If you'd like to retire in Portugal as a European Union (EU) citizen or citizen of a European Free Trade Association nation, it's relatively straightforward.
You can stay in Portugal for up to three months as a tourist; after three months, you must apply for a Certificate of Residency known as a Certificado do Registo de Cidadão da União Europeia or CRUE. You can get a CRUE at your local City Council.
Non-EU citizens
To retire as a non-EU citizen in Portugal, you must apply for a temporary residence visa per the country's retirement residency law. This can be done at a Portuguese Consular office or Portuguese Embassy. Non-EU residents who want to apply this way must provide a valid passport, proof of income, health insurance, and a criminal record check.
A range of residence permits are available for individuals born outside the European Union. You're usually granted a temporary residence permit. After five years of residency, you can apply for a permanent residence permit. A permanent residence permit also opens the door to applying for Portuguese citizenship.
The most common visas for expat retirees are the Portugal Golden Visa Program or the D7 Visa (the Passive Income Visa or Portugal Retirement Visa).
US citizens
Although applying for residency in Portugal as a US citizen is relatively uncomplicated, it can take some time, and you must ensure you have the correct paperwork. You will need the following documents to start the application process to retire in Portugal:
- A valid passport
- Proof of enough passive or pension income to sustain yourself (through bank statements)
- Proof of health insurance
- A NIF (Número de Identificação Fiscal) number (further discussed below under 'Banking')
- A criminal background check
You must make an appointment with the Agency for Integration, Migration and Asylum (AIMA, formerly SEF) office to ensure that you have collected the required documents.
After five years of temporary residence, US citizens can apply for permanent residency status in Portugal, which allows them to obtain Portuguese citizenship and a passport.
Sephardic Jews
Individuals with Sephardic ancestry who can provide the necessary documentation to prove their heritage can apply for Portuguese citizenship.
How to Retire in Portugal: Visas and Residence Permits
To retire in Portugal as a non-EU citizen, you must apply for residency. This process may take some time, but it is generally straightforward. To qualify for retirement in Portugal, you typically need to meet the following criteria:
- Social Security Contribution: You need to have at least 15 years of contributions to social security during your employment.
To apply for residency, after securing your Portuguese temporary residence visa, you will generally need to provide:
- A valid passport
- Proof of your regular passive or pension income
- Health insurance that meets Portuguese standards
- Additional documents based on your chosen residency route
- A criminal background check submitted to the Portuguese authorities
In the following section, you'll learn more about the specifics of each visa and what it takes to enjoy retiring in Portugal successfully.
Portugal Golden Visa
The Portugal Golden Visa Program is a five-year residency-by-investment scheme for non-EU citizens. The Portuguese government introduced this program to attract foreign investment to the country.
The Golden Visa is particularly popular for individuals seeking to retire in Portugal, as it allows them to live without engaging in work or business activities.
Foreigners must make a minimum investment in Portugal to apply for the Golden Visa and have the right to live, work, and study there.
Some of the most popular Golden Visa investments were in residential real estate and commercial ventures in designated interior areas in Portugal. However, Portugal’s Golden Visa Program went through significant changes. The Portuguese government announced that the program no longer accepts the purchase of real estate or real-estate-related funds as qualifying investments. Making a capital transfer of a value equal to or above €1.5 million is also no longer eligible for the Golden Visa.
Despite real estate investment and the €1.5 million capital transfer option no longer being available, many other investment options will continue to be eligible for the Golden Visa Program. They are as follows:
- Fund subscription: Contribute to a qualified investment fund (such as private equity funds or venture capital funds) worth at least €500,000
- Investment or donation in the arts or reconstruction of national cultural heritage with a minimum investment of at least €250,000
- Scientific research: Science or Technology research contribution of at least €500,000
- Creation of ten jobs: Creation and maintenance of ten jobs during the required period
- Share capital and job creation: Incorporation of a commercial company in the national territory or reinforcement of a company’s share capital (this company must have its head office in the national territory), in either case with an investment of €500,000, combined with the creation of five or maintaining ten jobs (five of them permanent)
The Portugal Golden Visas permit their holders to stay in the country for up to five years, after which they can apply for permanent residence.
Portugal's D7 Visa (Retirement Visa)
Making a sizeable monetary investment is only possible for some people, so the Portugal D7 Visa is an excellent alternative for non-EU, non-EEA, and non-Swiss citizens who want to retire in Portugal. To qualify for the Portugal retirement visa, you must make a passive income of at least €9,120 per year.
Passive income sources include pension funds, social security benefits, dividends, intellectual property, royalties, or other investments. After two years, you can renew your Portugal D7 Visa for another three years, after which you can apply for permanent residency in Portugal.
Portugal Citizenship for Non-EU Retirees
For non-EU retirees looking to make Portugal their permanent home, the D7 Visa and the Golden Visa provide routes to citizenship. Retirees can apply for permanent residency after legally residing in Portugal for five years, which is a significant step toward obtaining Portuguese citizenship.
To be eligible for citizenship, retirees must meet several key requirements set by the Portuguese government:
- Legal residency: You must have lived in Portugal for at least five years. This can be fulfilled through the D7 or Golden Visa, leading to a residence permit.
- Integration into Portuguese society: Applicants need to demonstrate some level of integration into the community. This may include basic knowledge of the Portuguese language and an understanding of local culture.
- Criminal background check: A clean criminal record is essential, confirming your good standing in the community.
An important advantage for many retirees is the possibility of dual citizenship. Portugal allows you to maintain your original nationality while also becoming a Portuguese citizen, giving you the best of both worlds.
Obtaining Portuguese citizenship also grants retirees a Portuguese passport, which opens doors to EU countries. This passport provides the right to live, work, and travel freely within the European Union. It is a valuable asset for retirees exploring European destinations or maintaining ties with their home country.
What You Need to Know Before Retiring in Portugal
The cost of living in Portugal
Portugal is renowned for its affordable cost of living, which is about 42% lower than that of the United States as of May 2023. Despite a steady increase over the past five years, it remains inexpensive compared to many Western European countries.
A couple can live comfortably on around €2,000 per month, with about half of this budget going toward accommodation.
Before starting your Portuguese life, consider additional living expenses such as:
- Groceries for two people
- Utilities (gas, electricity, water, internet, phone line, and TV bundle)
- Leisure activities (dining out, cinema visits, etc.)
These add up to approximately €1,750 per month. If you own a car, monthly expenses may rise to just under €2,000.
Remember that living in a major city center like Lisbon will increase overall cost of living, as rents can be significantly higher.
We recommend that retirees with non-Euro-based pensions or incomes, such as US Dollars or British Pounds, set aside at least three months' retirement savings as a safety net. This will help safeguard against fluctuations in the exchange rate with the Euro.
Overall, Portugal offers a cost-effective option for retirees in one of the most appealing European destinations.
The cost of food in Portugal
The Mediterranean diet is widely recognized as one of the healthiest diets globally, and Portugal's cuisine is particularly renowned for its fresh seafood, unsurprisingly given the country's long coastline.
What's more, Portuguese gastronomy boasts a rich assortment of desserts. Among these are the famous Pastéis de Nata, or Portuguese custard tarts, which feature decadent egg custard enveloped in a flaky pastry.
The table below gives an overview of basic food costs expats can expect from their buy-weekly food shop:
|
Item |
Price € |
|
Milk (1 liter) |
€0.78
|
|
Bread (500 g) |
€1.20 |
|
Rice (1 kg) |
€1.11 |
|
Eggs (12) |
€2.24 |
|
Chicken (1 kg) |
€5,84 |
|
Apples (1 kg) |
€1.70 |
|
Tomatoes (1 kg) |
€1.75 |
|
Potatoes (1 kg) |
€1.07 |
|
Water (1.5 liters) |
€0.57 |
Lunch and dinner costs
Eating out in Portugal is much more affordable than in many other countries in Western Europe and the USA. For a meal in an inexpensive restaurant, expect to pay between €6 and €15 per person and a meal at a mid-range restaurant costs between €30 and €82 for two people.
Many places have set meals called the "prato do dia," or meal of the day. These tend to be very affordable options for lunch.
Coffee
Coffee plays an essential role in Portuguese culture. However, unlike in other countries where coffee is often consumed on the go, it's best to take a seat and savor each sip in Portugal. If you're in a hurry, though, don't worry – they'll gladly serve you an espresso at the bar. The price typically ranges between 50 cents to two euros.
Wine and beer
Portugal is a paradise for wine lovers, offering thousands of high-quality labels. Locally produced wine is tax-free, making buying a decent bottle for as little as €3 possible. Don’t miss trying vinho verde, a local favorite.
For beer enthusiasts, Portugal's craft breweries in major cities provide plenty of options. A half pint at a local bar costs just over €1. To save money, visit spots where the locals go instead of touristy areas. This is a smart strategy to enjoy the best of Portuguese culture affordably.
Internet access
Portugal's infrastructure, including its internet and communication services, is of excellent quality. High-speed internet and 4G connectivity are widely available throughout Portugal. However, it's worth researching the various service providers in the region you'll be moving to. While excellent internet service is generally very good, some remote locations may have slower internet.
Nearly all restaurants, cafes, and hotels offer public Wi-Fi access, making working remotely in Portugal easy (should you choose to do so) or connecting with family and friends abroad.
Entertainment
Transportation
Portugal boasts an efficient and affordable public transport system, making it easy to get around. The primary options include buses, trains, trams, and metros. Major cities like Lisbon, Porto, and Coimbra feature extensive metro systems, while buses and trains serve urban and rural areas.
Comboios de Portugal, the national railway company, connects key cities and tourist spots, offering low fares that can be purchased at stations or online. The modern bus network includes long-distance coaches, and the historic tram lines in Lisbon and Porto are a favorite among tourists.
A one-way ticket for metros, buses, or trams costs around €1.50, and a monthly pass budget ranges from €30 to €40. Taxis and Ubers are also affordable, starting at approximately €3.50. This accessibility helps integrate Portuguese people and visitors into the vibrant local culture.
Healthcare for Retirees in Portugal
Portugal is known for its excellent public healthcare system, often regarded as one of the best in Western Europe. As a legal resident, this system is available to retirees and expats, providing quality care similar to that of the UK and Canada. However, it's important to note that dental care and plastic surgery are not covered, so be prepared for those healthcare costs.
EU citizens
EU citizens can access free healthcare through the Service Nacional de Saúde (SNS) using the S1 form from their home country's pension center. While the SNS provides good quality care, some expat retirees prefer private health insurance for more choices, access to English-speaking doctors, and fewer waiting times.
Non-EU citizens
For non EU citizens, including US citizens, free healthcare in Portugal is available only after they achieve permanent residency. During the first five years, they must have valid private health insurance or pay for medical services. Expat retirees must provide proof of health insurance when applying for residency in Portugal. After moving, they can switch from an international plan to a more affordable private health insurance plan.
Private health insurance costs
The costs for private health insurance in Portugal vary based on age and health history. Young expats in good health may pay less than €10 per month, while older expats could pay several hundred euros. Some insurers do not cover those over 55, but companies like Tranquilidade, Millennium Bank's Medis, and Fidelidade/Multicare offer exceptions, with policies available up to age 75.
Additional Considerations
It’s important to note that certain visas, such as the Golden Visa, require private health insurance for the initial residency period before retirees are eligible for the public healthcare system.
Housing for retirees in Portugal
When considering retirement in Portugal, the cost of a home can vary significantly based on location, property type, and size. Overall, property prices in Portugal are generally lower than in many European countries, making it an attractive option for retirees and expats.
Renting in Portugal
Renting in Portugal offers various options to suit different budgets and lifestyles. A one-bedroom apartment can range in price depending on the area, with urban centers typically costing more than suburban or rural locations. Overall, the rental market is competitive, and many find it affordable to enjoy a comfortable lifestyle.
Purchasing real estate in Portugal
Investing in real estate in Portugal is a wise decision for retirees. Property prices remain affordable compared to other regions in Europe, and buying a home can eliminate rental costs from your monthly budget.
The cost per square meter will depend on the property's location, condition, and amenities. Generally, the further away you move from major cities, the more affordable the prices become. Additionally, owning a home can help protect against fluctuations in currency exchange rates and provide a valuable asset for the future.
Whether you rent or purchase real estate, investing in housing in Portugal can enhance your retirement experience while helping you afford retirement comfortably.
Issues to look out For
Retirement Bureaucracy in Portugal
Getting a NIF (Número de identificação fiscal)
Getting your NIF or tax number is the most urgently required document for any expat retiree in Portugal. Your NIF is a unique nine-digit tax identification number you need to make most financial transactions in Portugal. You need a NIF to sign a lease, buy property, pay taxes, register as an NHR, and open a bank account, to name a few.
If you're a non-EU or EEA national seeking to retire in Portugal, appoint a fiscal representative to obtain your NIF. You can book an appointment with your local tax office (Finanças) or queue for a walk-in appointment. Note that waiting times to book an appointment and queues for a walk-in appointment can be long in Portugal's bigger cities like Lisbon, and getting a NIF without speaking Portuguese can be difficult.
Because of this, we recommend that you apply for a NIF online through your fiscal representative. We offer a NIF and fiscal representation service. Simply apply online, and we'll send your NIF to your inbox in two to three weeks, ensuring you're ready to start your life in Portugal.
Read our in-depth guide to the NIF: Getting a NIF Number in Portugal
Opening a Portuguese bank account
A Portuguese bank account is important if you live in Portugal. Making business transactions in the country is much easier with a local bank account. Managing your everyday banking from a bank account in your home country can be inconvenient and expensive due to currency exchange rates and international transfer fees. Note that many shops and restaurants outside of Lisbon only take Portuguese bank cards.
How to open a bank account in Portugal
Opening a bank account in Portugal is straightforward once you have your NIF number. Other required documents are proof of address and a valid passport. Usually, you must go into a bank in person to submit these documents and open an account.
If you are relocating from the US, please be mindful that banks may not allow US citizens to open accounts due to the strict regulations of the Imposto Sobre Rendimento das Pessoas Singulares (IRS), which enforces personal income tax in compliance with the Foreign Account Tax Compliance Act (FATCA). You should research and check with different banks before selecting one to avoid any surprises during the process.
Alternatively, we can help you open a Portuguese bank account from anywhere in the world. Just fill out our online application, and we can help you open an account with one of Portugal's leading banks.
The Best Places to Retire in Portugal
Portugal has many beautiful places; some even have Unesco World Heritage Site status. What suits you is dependent on what you value the most. Below is an overview of some of the most popular places. Remember that this list is not exhaustive, and you may find another place to retire in Portugal that suits you more.
Retire in the Algarve
Retiring in Portugal's southernmost region can be a dream for those seeking a relaxed, sunny, and affordable lifestyle. Known for its stunning coastline, picturesque towns, and charming villages, the Algarve offers a tranquil atmosphere and friendly people. Retirees can enjoy a comfortable lifestyle on a modest budget, with access to excellent restaurants, fresh markets, and world-class golf courses.
The region offers many activities and cultural events, such as music festivals, art exhibitions, and traditional festivals. Nature lovers can enjoy hiking trails, birdwatching, and exploring the Ria Formosa Natural Park. Retirees can also use the region's excellent infrastructure, with modern roads, public transportation systems, and Faro Airport nearby.
Retire in Cascais or Estoril
Retiring in Portugal, especially in Cascais or Estoril, offers retirees a peaceful and luxurious lifestyle along the stunning Atlantic coast. Known as the Portuguese Riviera, these charming towns feature pristine beaches, vibrant culture, and excellent healthcare services, making them popular for retirees.
Cascais and Estoril have affordable housing options, from stylish apartments to luxurious villas, allowing retirees to enjoy their golden years comfortably. The region boasts world-class golf courses, high-end restaurants, and a lively arts scene, providing a fulfilling lifestyle.
With a mild climate and proximity to Lisbon's city center, non-EU residents can easily access the city’s attractions. Compared to other European countries, this area provides a unique blend of relaxation and culture, making it an ideal retirement destination.
Retire in Lisbon
Living in Lisbon, Portugal's vibrant capital, offers an exciting experience for retirees seeking a cultural lifestyle. This charming city is known for its stunning architecture, rich history, and lively culture, making it a popular choice.
Lisbon features excellent public transport and modern infrastructure, making it a comfortable place to live. Living costs are affordable compared to other European destinations, allowing retirees to enjoy activities like museums, theaters, and festivals.
Lisbon has a pleasant environment year-round with a mild climate and proximity to the Atlantic coast. Housing options range from historic buildings to modern apartments in the city center, ensuring retirees can find an affordable home where they can live comfortably.
Retire in Porto
Porto is Portugal's second city, offering retirees a vibrant lifestyle in a historic setting. Renowned for its stunning architecture, rich culture, delicious cuisine, and famous Port wine, Porto is a delightful option.
With excellent public transportation, getting around is easy for retirees. Enjoy activities from museums and theaters to river cruises and wine tours.
The city's mild climate and proximity to the Atlantic coast create a pleasant environment year-round. The historic old town provides endless exploration opportunities. Plus, real estate in Porto is more affordable than in Lisbon, with options ranging from traditional buildings to modern apartments. This makes real estate investments in Porto attractive for those seeking an affordable cost of living.
Retire in Braga
Braga is a beautiful city in northern Portugal and a UNESCO World Heritage site. With its rich history, vibrant culture, and stunning natural landscapes, Braga is an ideal choice for retirees seeking a peaceful and fulfilling lifestyle.
The city enjoys a mild climate, making it comfortable year-round. The cost of living in Braga is relatively low compared to other European cities, making it an affordable option for retiring. Plenty of leisure activities include museums, festivals, and outdoor pursuits.
Braga is also known for its safety and friendliness. Its free healthcare for Portuguese citizens and excellent public services ensure a high quality of life.
Retiring in Portugal: What To Expect
Lifestyle
Portugal is known for its leisurely pace of life, especially when compared to other European countries. Days typically begin later and end earlier, with numerous national and religious holidays.
You can also expect a lot of bureaucracy and delays in administrative processes, so bear this in mind when you need something urgently.
Like other Mediterranean cultures, the Portuguese prioritize savoring life’s pleasures instead of rushing. Be prepared for a relaxed and slower pace of life.
A safe and tolerant country
Portugal is considered one of the safest countries in the world. Its crime rate is relatively low compared to other European nations and the United States. Its major cities and neighborhoods are generally well-maintained and safe, with most areas deemed secure for visitors and residents.
Public transportation is also considered safe, but exercising caution and closely monitoring your belongings is advisable as with any other location. By taking reasonable precautions, travelers can enjoy the safety and security that Portugal has to offer.
Fitting in and making friends in Portugal
Portuguese people are known for being friendly and welcoming to newcomers, and they enjoy socializing over good food, wine, and coffee.
One way to meet people when you retire in Portugal is by participating in local events, such as festivals, concerts, and sports activities. It's also a good idea to learn the Portuguese language, as this can help you communicate with locals and show that you're trying to adapt to their culture.
Joining clubs, volunteer organizations, and language exchange programs are other great ways to meet like-minded individuals and establish new friendships, regardless of age and background.
Owning and driving a car in Portugal
Although public transport is excellent, you may want to have your means of transport, especially if you live outside the major cities. To make sure you follow the rules and regulations of Portuguese traffic rules, you need to ensure you have the following when driving your car in Portugal:
- A valid driver's license
- Vehicle registration
- Vehicle inspection certificate
- Headlight converters
- Spare bulbs
- A first-aid kit
Failure to produce any of these items when requested by police may result in a fine.
Fuel prices average between €1.65 to €2.05 per liter, but these prices may be subject to changes in the market. Car rental rates typically start at less than €30 per day, but many major highways also have tolls. For example, driving between Porto and Lisbon incurs approximately €30 in toll fees, so factor this in when budgeting for a trip.
Portugal's Retirement Landscape: Legal and Tax Essentials
Retirement Laws and Retirement Tax in Portugal
Portugal is known for its favorable tax laws for expats, particularly through the Non-Habitual Residency (NHR) scheme. Introduced in 2009, the NHR allows for a flat 10% tax on foreign pensions and exemptions on various income sources.
The NHR regime has been phased out as of January 1, 2024. Existing tax residents will maintain their benefits for the full ten years.
To benefit from the scheme, those who meet the criteria for registration as non-habitual residents by December 31, 2023, and hold a valid residence visa can apply by March 31, 2024.
New applicants must qualify under the revised NHR 2.0, which focuses on scientific research and innovation. If you live in Portugal for over 183 days, you must file taxes on your worldwide income. Portugal has double taxation treaties with all EU countries and several non-EU countries to avoid being taxed twice.
These tax implications enhance Portugal's appeal as a retirement destination for EU residents and investors.
Moving retirement funds, pensions, and Social Security contributions to Portugal
Transferring your pension to Portugal as an expat retiree can be straightforward with some planning.
As of 2023, the retirement age in Portugal is 66 years and four months for both men and women. You're eligible for a state pension if you’ve worked in Portugal for at least 15 years and contributed to social security. Many private companies also offer pension plans.
As an EU citizen, you can transfer your pension contributions from any EU country, counting towards your state pension in Portugal. If you’re a non-EU citizen, check with your home country’s pension service to see if your contributions can be transferred; many non-EU countries have agreements with Portugal.
Remember, all residents are taxed on their worldwide income, including pensions from other countries. Understanding the tax implications is crucial, but obtaining NHR status or setting up an offshore pension scheme can help reduce this tax burden.
Inheritance tax implications for retirees in Portugal
Portugal has favorable tax laws regarding inheritance. There is no inheritance tax on property, but a stamp duty of 10 percent applies unless the inheritance goes to a spouse or direct descendants, in which case it’s exempt. Minor administrative fees may also occur during the process.
According to the Portuguese Civic Code, the laws of the deceased’s home country govern inheritance. For US, British, Canadian, and Australian retirees moving to Portugal, US laws will apply. However, if the surviving spouse has permanent residency in Portugal and the couple is from different countries, Portuguese law may apply unless stated otherwise in the will.
It’s wise to create a detailed, legally reviewed will. Having separate wills in Portugal and your home country can benefit American, British, Canadian, and Australian retirees in Portugal. Always consult a reliable legal professional to navigate any potential issues.
Tips to Help You Afford Retirement in Portugal
It's wise to work with an advisor who can assist you with the intricate details of relocating, financial planning, and tax implications. This will ensure a smoother transition to your new life overseas.
A solid financial plan and guidance from a trusted advisor can help ensure you have the resources and knowledge to enjoy a comfortable retirement in Portugal. By understanding the local tax laws and regulations, you can make informed decisions about managing your finances and maximizing your income while living in this beautiful country.
GetNIF: Who We Are and How We Can Help You Retire in Portugal
If you're planning to retire in Portugal, getting started and setting up your new life can be overwhelming. Fortunately, GetNIFPortugal can make the adjustment easier and less time-consuming. As experienced professionals, we specialize in helping individuals immigrate to Portugal.
Two essential steps in getting started are obtaining a Portuguese tax number (NIF) and opening a bank account. These are necessary to conduct business transactions in the country. We can assist you in obtaining both of these essential items, making the move smoother.
With our help, you can get your NIF number and open a bank account from the comfort of your home before moving overseas. This puts you ahead of the game and makes the relocation process easier since you've already dealt with the two most critical steps. To begin your journey to sunny Portugal, don't hesitate to contact us for an initial consultation, and we'll guide you through your journey to retiring in Portugal.
Frequently Asked Questions about Retiring in Portugal
Can a US citizen retire to Portugal?
US citizens can retire in Portugal by applying for an appropriate visa and residency permit, such as the Portugal D7 Visa.
What are the pros of living in Portugal?
Living in Portugal offers numerous advantages for retirees. Expats are drawn to its mild climate, stunning beaches, and a laid-back lifestyle that promotes a slow pace of life. Portugal is also known for its affordable cost of living, making it one of the most affordable European countries.
Additionally, residents benefit from affordable healthcare and high-quality education. As a member of the EU, expats enjoy perks like free movement and travel throughout Europe, enhancing their overall experience in this welcoming country.
What are the cons of living in Portugal?
Living in Portugal has its drawbacks, including low salaries, which may concern expats and retirees; the absence of central heating in many homes, making winters uncomfortable; and a tendency for bureaucracy and long waiting times when dealing with Portuguese government services.
While many major cities have a vibrant atmosphere and a growing English-speaking community, those in small towns may find fewer resources and services available. These factors are important to consider when contemplating a move to this beautiful country.
Where do most expats retire in Portugal?
Many expats retire in the Algarve, in cities like Lisbon, Porto, Cascais, and Estoril. However, Portugal has many other fantastic places where retirees can find their perfect home.
Do retired expats pay taxes in Portugal?
You are classed as a tax resident in Portugal if you spend at least 183 days in the country within a given year. As a tax resident, you must pay income tax on all your global earnings, including salaries, dividends, rental income, and capital gains.
If you are not a tax resident but live in Portugal, only the income you earn within Portugal is taxable, usually at 20 percent. To take advantage of the favorable tax benefits offered to expatriates, consider exploring Portugal's Non-Habitual Residency (NHR) program.
How much money do you need to retire comfortably in Portugal?
This depends on various factors, such as location and lifestyle. You should be able to live comfortably on between €1,500 and €2,000 per month including rent. However, you might need more if you live in a more expensive part of Portugal.
Is it easy to retire in Portugal?
The various visa-to-residency routes are tailored to people from different backgrounds and circumstances. Each process is different when it comes to satisfying visa and residency requirements. Some can take longer and require more paperwork, but generally, especially with the help of an expert, the process is quite straightforward.
Is retiring to Portugal a good idea?
Retiring in Portugal is an excellent idea for many reasons. Portugal offers a high quality of life with an affordable cost of living compared to many other European Union countries, allowing you to get more out of your retirement savings. The country often ranks highly in international living indexes for its quality of life.
The nation is also known for its pleasant climate, safety, excellent healthcare system, and friendly, welcoming locals. Not to mention that most people speak English there. However, when deciding whether to retire abroad, it's important to consider potential challenges.
What are the downsides of retiring in Portugal?
There are a few potential downsides you may want to consider when weighing up the pros and cons of retiring in Portugal. For example, Portugal has a universal healthcare system, but wait times for non-emergency care, especially in rural areas, can be longer than in other Western countries. Consider this if you have specific medical needs.
Do non-EU retirees need private health insurance in Portugal?
Yes, non-EU retirees need private health insurance in Portugal. While the country provides free healthcare to residents, non-EU retirees must have private insurance during their initial residency period. Many find low-cost options available. Checking how your social security benefit can align with your health insurance as you retire abroad is important.
Can I collect Social Security if I retire in Portugal as a citizen?
Yes. Thanks to the Totalization Agreement, you can continue receiving your US Social Security benefit with some paperwork and planning. File an SSA Form SSA-7403 before your move, keep paying US taxes on your benefits, and be aware of potential Portuguese taxes depending on the amount and your residency status. Consulting experts familiar with both countries' regulations can ensure a smooth transition.
Where do most Americans retire in Portugal?
Most Americans who retire in Portugal choose the Algarve region, particularly Albufeira and Lagos, followed by Lisbon and Porto.
