Many people decide to retire in Portugal. In fact, Portugal was recognized as the best place in the world to retire by the Annual Global Retirement Index 2023.
Apart from an affordable cost of living, pleasant weather, and a reputable national healthcare system, this captivating European nation has attractive visas for expat retirees. In the past decade, the Portuguese government has launched programs such as the Golden Visa and the Portugal Retirement Visa (Passive Income Visa), which allows foreigners to retire and live in the country.
Want to retire abroad? Then, this article is for you. In this guide, we’ll provide you with all the essential information on how to retire in Portugal. Here’s what we’ll cover:
- Visas to retire in Portugal
- The best places to retire in Portugal
- How to open a Portuguese bank account as a retiree
- Tax implications for expats, and more.
Why Retire in Portugal?
There are many reasons to retire in Portugal. The nation has a relatively low cost of living, and it’s often considered one of the most affordable European countries, meaning that your retirement savings will stretch further.
Moreover, the national healthcare system is considered one of the best in Europe, and Portugal also happens to be very safe and peaceful.
Portugal is also graced with a warm climate, delicious cuisine, and friendly people, making it a sought-after destination for expat retirees.
Not to mention that the Portuguese government introduced several attractive visa options for foreign nationals seeking to live and retire in Portugal. These include the Portugal Retirement Visa (Passive Income Visa) and the Golden Visa.
Portugal offers an array of positive attributes for retirees, so it's no surprise this luscious European destination is considered an excellent place for those looking to retire abroad.
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 permit 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 in this way must provide a valid passport, proof of income, proof of health insurance, and a criminal record check.
A range of residence permits are available for individuals born outside of 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 up the door to applying for Portuguese citizenship.
The most common visas for expat retirees are the Portugal Golden Visa Program or the D7 Visa (also known as 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 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 have to make an appointment with the official immigration service office, which is the Portuguese Immigration and Border Service (Serviço de Estrangeiros e Fronteiras or the SEF), 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, whereby they can get the Portuguese citizenship and 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
In order to retire in Portugal as a non-EU citizen, you must apply for residency, which may take some time, but it is straightforward. To do that, you're usually required to provide a valid passport, proof that you have some form of regular income and evidence that you have health insurance. You'll also be required to submit to a criminal background check. However, the requirements and application process will vary depending on the visa you apply for.
Below are some attractive visa options for non-EU individuals seeking to retire in Portugal.
Golden Visa Portugal
The Portugal Golden Visa Program is a five-year residency-by-investment scheme for non-EU citizens. This program was introduced by the Portuguese government in order 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 in the country without having to engage in work or business activities.
In order to apply for the Golden Visa and have the right to live, work, and study in Portugal, foreigners have to make a minimum investment in the country.
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, there are many other investment options that will continue to be eligible for the Golden Visa Program. They are as follows:
- Fund subscription: Make a contribution 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.
For more up-to-date information on this visa, make sure to read the Portugal Golden Visa Ending guide.
Portugal's D7 Visa (Retirement Visa)
Making a sizeable monetary investment is only possible for some people, so the 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 benefit, dividends, intellectual property, royalties, or other investments. After two years, you can renew your D7 Visa for another three years, after which you can apply for permanent residency in Portugal. For more in-depth information about the Portugal Passive Income Visa, read our guide on Portugal's D7 Visa.
Retirement Bureaucracy in Portugal
Getting a Número de Identificação Fiscal (NIF number)
Getting your Número de Identificação Fiscal (NIF) or tax number is the most urgently required document for any expat retirees in Portugal. Your NIF is a unique nine-digit tax identification number that 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, make sure to appoint a fiscal representative to obtain your NIF. You can either 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 would 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 straight to your inbox in two to three weeks, ensuring that 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 bank account in Portugal
It's important to have a Portuguese bank account if you are choosing to 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 a lot of 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 are required to 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 up 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.
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, and there are 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, with a relatively low crime rate 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, though exercising caution and keeping a close eye on your belongings, as with any other location, is advisable. 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 own means of transport, especially if you live outside of 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 be aware that 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.
The Cost of Living in Portugal
Portugal is known for its affordable cost of living, which was approximately 42 percent lower than that of the United States as of May 2023. Although the cost of living has steadily increased over the past five years, it is still relatively inexpensive compared to other Western European countries.
A couple can enjoy a comfortable lifestyle in Portugal for around €2,000 per month, with roughly half of the budget allocated to accommodation expenses.
In addition to rent or mortgage payments, you should also factor in the following costs before starting your Portuguese life:
- Groceries for two people
- Utilities (gas, electricity, water, Internet, phone line, and TV bundle)
- Leisure activities (dining out once or twice a week, going to the cinema, etc.)
This comes to around €1,750 per month. Running a car will bring a couple's monthly cost of living to just under €2,000.
Please note that living in Lisbon's city center or other more expensive areas of Portugal will increase the general cost of living as rents might be more expensive.
We'd recommend that retirees with non-Euro-based pensions or other income, such as US Dollars or British Pounds, set aside significant savings, such as a minimum of three months' worth of living expenses, as a safety net.
This will protect you against sudden changes in the exchange rate between the Euro and your currency.
See: Is Portugal Expensive for Americans? (Updated 2023)
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:
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Lunch and dinner costs
Eating out in Portugal is a lot 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.
A lot of places have set meals called the "prato do dia" or meal of the day. These tend to be a very affordable option 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
For those who appreciate wine, Portugal is a paradise. The country has thousands of exceptional wine labels, many of which are high quality. Additionally, since locally produced wine is not subject to taxation in Portugal, purchasing a decent bottle for as little as €3 is possible. Portugal is famous for its vinho verde, or green wine. If you’re a wine enthusiast, we recommend trying a glass.
As for beer, Portugal's local brewers are equally knowledgeable, and you'll find lots of craft breweries, particularly in the major cities. Enjoying a half pint at a local bar for just over €1 is possible. Expect to pay more in touristy and upmarket areas, so head to bars and restaurants where the locals go to keep costs low.
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 WIFI access throughout Portugal, making working remotely (should you choose to do so) or connecting with family and friends abroad easy.
Entertainment
Most international movies and TV shows are broadcast in their original language, with Portuguese subtitles. This means you'll be able to keep up with what your friends and family are watching back home. A trip to the movies in Portugal typically costs between €5 to €10.
If you enjoy a night of dancing and clubbing, you can expect to pay between €5 to €10 per cocktail. Live music in the form of traditional Fado singing or contemporary electronic music is also popular, especially in larger cities like Lisbon or Porto.
For fitness lovers and health-conscious expats, gym memberships in Portugal typically cost between €30 and €40 per month. You'll also find numerous golf courses, tennis courts, basketball courts, and soccer fields throughout the country. And if you're just looking to practice yoga or meditate among nature, Portugal offers some truly spectacular scenery.
Transportation
Portugal's public transport system is efficient, affordable, and an excellent method of travel. The primary forms of public transport include buses, trains, trams, and metros. Lisbon, Porto, and Coimbra have extensive metro systems, while buses and trains serve urban and rural areas.
The national railway company, Comboios de Portugal, connects major cities and tourist destinations. Fares are inexpensive, and tickets can be purchased at stations or online.
Portugal also has a modern bus network, with long-distance coaches connecting cities and towns nationwide. Additionally, Lisbon and Porto have historic tram networks that are popular with tourists.
A one-way ticket on one of Portugal's metros, buses, or trams costs around €1.50, and a monthly pass costs between €30 and €40. Taxis and Ubers are also affordable, with a starting tariff of approximately €3.50.
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 a wealth of 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 Cascais or Estoril, located on Portugal's stunning Atlantic coast, also called the Portuguese Riviera, offers retirees a peaceful and luxurious lifestyle in beautiful settings. These charming towns are known for their pristine beaches, vibrant culture, and excellent infrastructure, making them popular retirement destinations.
Both Cascais and Estoril boast high-end restaurants, boutique shops, world-class golf courses, excellent healthcare services, and modern transportation systems. The region also has a vibrant arts and culture scene, with museums, art galleries, and music festivals throughout the year.
Housing options in the area range from luxurious villas to stylish apartments, and retirees can find comfortable and affordable homes to suit their needs and to enjoy their golden years. Both towns' mild climate and proximity to Lisbon provide buyers with a convenient and cosmopolitan lifestyle, with easy access to the city's many attractions, including historical sites, museums, and theaters.
Retire in Lisbon
Living in Lisbon, Portugal's vibrant and charming capital city, can be an exciting and enriching experience for those seeking a cosmopolitan and cultural lifestyle. This major city is known for its stunning architecture, rich history, and lively culture, making it a popular destination for retirees.
Lisbon boasts excellent public transportation, and modern infrastructure, making it a comfortable and convenient place to live. The cost of living is affordable compared to other European cities, and retirees can enjoy various activities and amenities, from museums and theaters to street fairs and festivals.
The city's mild climate and proximity to the Atlantic coast and the Portuguese Riviera offer a pleasant and comfortable environment year-round, and its surrounding region provides endless opportunities for exploration and learning. Housing options range from historic buildings to modern apartments, and retirees can find a comfortable and affordable home to suit their needs.
Retire in Porto
Porto is Portugal's second city but is by no means a lesser option. It offers retirees a charming and lively lifestyle in a beautiful and historic setting. The city is known for its stunning architecture, rich cultural heritage, delicious cuisine, and famous Port wine.
Like Lisbon, Porto's public transport system and infrastructure are exceptional, making getting around the city comfortable and easy. Additionally, retirees can enjoy various activities and amenities, from museums and theaters to river cruises and wine tours.
The city's mild climate and proximity to the Atlantic coast offer a pleasant and comfortable environment year-round. The region's rich history always ensures something to see and do. You'll also find that real estate is more affordable than in Lisbon, and you’ll have a choice of traditional Portuguese buildings and modern apartments.
Retire in Braga
Braga is a beautiful city located in the north of Portugal and a Unesco World Heritage site. It’s a beautiful European destination with a rich history, vibrant culture, and stunning natural landscapes. Retiring in Braga can be an excellent choice for those seeking a peaceful and fulfilling lifestyle.
The city has a mild climate, making it comfortable to live in throughout the year. The cost of living in Braga is relatively low compared to other European cities or cities in the European Union, making it an affordable option for retirees—plenty of leisure activities and events, such as museums, festivals, and outdoor activities.
Braga is also a safe and friendly city with excellent free healthcare for citizens and great public services for Portuguese citizens and Portuguese residents.
Retirement Property: Rent or Purchase Real Estate in Portugal
The cost of a home in Portugal varies based on location, type of property, and the size of the property. Living in Lisbon will cost more than living in a suburban or rural area, whether you decide to rent or purchase a property.
On the plus side, property prices in Portugal are below European averages. This is why you might find that many expats in Portugal choose to buy property instead of renting.
Below is a breakdown of the cost of housing in Portugal.
Renting a property in the Algarve or Lisbon
Choosing whether to rent in Portugal's southern region, the Algarve or in Portugal's capital city, Lisbon, depends on your preferences and needs. There are some differences in rental prices, and below is an average overview of rental costs for the Algarve and Lisbon:
A one-bedroom apartment costs between €850 to €1,100 to rent in the Algarve. A one-bedroom apartment costs between €784 to €1,230 to rent in Lisboa.
*These estimated rent prices are from Numbeo, as of May 2023
Buying a property in the Algarve or Lisbon
Over the past five years, property prices in many areas of Portugal have risen, but they remain affordable compared to other European countries. Investing in a property of your own in Portugal is wise, it eliminates rental costs from your monthly retirement budget and mitigates any long-term currency exchange risks whilst also providing you with an asset.
In Faro, the capital of the Algarve region, the price per square meter ranges from €1,700 to €2,400, depending on where the location is located (outside the city center or inside the city center). Also note that the further you move away from the coast, the cheaper property prices are. Lagos is more expensive, with prices per square meter of around €3,300.
Lisbon's city center's price per square meter can range from €4,500 to €8,000, depending on the age, size, location, amenities, and type of property. Prices drop significantly when moving outside of Lisbon to suburban areas.
To learn more about buying property and properties available in Portugal, don't hesitate to contact our partners at Goldcrest, who are experts in all things real estate and specialize in helping expats find the right home in Portugal.
Issues to look out for
Suppose you're an American who'd like to retire in Portugal and are new to Portuguese houses. In that case, you may need some advice at first, as you may find it challenging to find an apartment in Portugal that meets American standards in terms of amenities. For example, many apartments in Portugal do not have air conditioning or central heating.
Traditional Portuguese kitchens are minimalistic, with small refrigerators and two-burner stoves being the norm. Additionally, in older apartments, kitchens are often located at the back of the apartment, which may be unusual for those used to open kitchens near the dining or living room. Of course, it is still possible to find modern apartments and houses that offer more contemporary kitchens and include modern fittings such as air conditioning units and central heating.
If you’re considering purchasing property in Portugal, read: Property Tax Portugal: A Guide to Navigating Portuguese Property Taxes.
Healthcare for Retirees in Portugal
Portugal is known for its excellent free healthcare system, often regarded as one of the best in Europe. The good news is that, as a legal resident, this healthcare system is available to retirees and expats, too. The public healthcare system is free of charge and is similar to that of the UK and Canada.
Portugal's Serviço Nacional de Saude (SNS) doesn't cover dental care costs and plastic surgery, so be prepared to pay extra for those services.
EU citizens
Retired EU citizens in Portugal can access free healthcare through the SNS, using the S1 form (previously called the E121 form) issued by their country of origin's pension center. While the healthcare the SNS provides is of good quality, some retirees opt for other private healthcare in order to have more choices, access to English-speaking doctors, and fewer waiting times.
Non-EU citizens/US citizens
Non-EU retirees, including US citizens, are only eligible for free healthcare in Portugal once they become permanent residents. During the first five years of residence, they must have private health insurance or pay for medical services.
Expat retirees must provide proof of valid health insurance when applying for residency in Portugal. After moving to the country, they can switch from an international plan to a private insurance plan, typically more affordable than US health plans.
Private health insurance costs and requirements
Although private health insurance in Portugal is much cheaper than in other countries, it's essential to understand the costs and limitations of private insurance.
The cost of private healthcare in Portugal varies based on a variety of factors: A retiree's age, health history, and general health. Young expats in good health may pay less than €10 per month for a health insurance plan, while older expats may pay several hundred euros.
It's also worth noting that many private health insurance companies don't insure those over 55, but there are exceptions, such as Tranquilidade, Millennium Bank's Medis, and Fidelidade/Multicare. Millennium Bank's Medis offers insurance policies for individuals up to the age of 75.
Some visas, such as the Portugal Golden Visa, require you to have private health insurance to cover an initial residency period before you are eligible for public healthcare in Portugal.
See: Healthcare in Portugal for Foreigners
Portugal's Retirement Landscape: Legal and Tax Essentials
Retirement Laws and Retirement Tax in Portugal
Portugal is known for its advantageous tax laws for expats, and it also has favorable tax implications for those who seek to retire in Portugal. The non-habitual tax regime (NHR) was created in 2009 to attract more foreign residents. The NHR scheme allows residents to benefit from a discounted flat income tax rate on their worldwide income instead of Portugal's standard tax rates, which can go up to 48 percent.
To qualify for NHR status, applicants must not have been tax residents in Portugal in the past five years. They must meet specific criteria, such as having the right to live in Portugal either through being an EU resident or through one of its visa programs. This also avoids double taxation.
Income from foreign pensions is taxed at a flat rate of 10 percent. NHR residents can enjoy an exemption from taxation in Portugal for ten years on any international income, including salary, business earnings, investments, rental income, and capital gains.
Additionally, they are exempt from tax on wealth during this period. Any revenue generated in Portugal is subject to a flat tax rate of 20 percent instead of the progressive income tax rate.
If you live in Portugal for more than 183 days in a tax year, you're considered a tax resident in Portugal. As a tax resident, you must pay taxes on your worldwide income and complete an annual tax return that declares your income. However, Portugal has double tax treaties with all EU countries and many non-EU countries to prevent double taxation.
NHR 2024 Update
At the beginning of October 2023, the Portuguese Prime Minister announced his intention to eliminate the NHR regime beginning in 2024.
The NHR ceased from 1 January 2024 onwards. In effect, the proposed change has the following consequences:
- Anyone who already has the NHR at the time of entry into force maintains the regime under the same terms until completing ten years of benefiting from the status
- Anyone who meets the conditions for registration as non-habitual residents on 31 December 2023, as well as holders of a residence visa valid on that date, will be able to register within the deadline available (until 31 March 2024) and benefit from the scheme.
You can find more information in our article: Non-Habitual Residency in Portugal.
Moving Retirement Funds, Pensions, and Social Security Contributions to Portugal
Transferring your pension funds to another country may seem daunting, but with some financial planning, it's pretty straightforward as an expat retiree in Portugal.
The Portuguese retirement age for men and women is 66 years and four months as of 2023.
Individuals who have worked in Portugal for at least 15 years and made social security contributions are eligible for a contribution-based state pension upon retirement. Many private companies also offer pension plans.
As an EU citizen, you can transfer your pension contributions from any EU country you have worked in, which will count towards your state pension income in Portugal. Non-EU citizens should check with their country of employment's state pension service to see if their contributions can be transferred to Portugal. Many non-EU countries have tax and social security agreements in place with Portugal.
All residents in Portugal are taxed on their income worldwide, which includes pension income received from other countries. However, obtaining NHR status or setting up an offshore pension income scheme can significantly reduce this taxation.
Inheritance Implications for Retirees in Portugal
Portugal's advantageous tax laws also extend to inheritance tax. The country does not impose an inheritance tax on property.
However, you may still be charged for stamp duty, which applies at a fixed rate of 10 percent unless the inheritance is going to the spouse or direct descendants of the deceased, in which case stamp duty is exempted. Additionally, some minor administrative fees may be associated with the inheritance process.
Under the Portuguese Civic Code, the laws of the deceased person's home country govern any inheritance process. Therefore, US inheritance laws will apply if you retire abroad to Portugal from the US. However, if the surviving spouse has Portuguese permanent residency and the couple is from different countries, Portuguese law may apply unless specified otherwise in the will.
Therefore, we strongly recommend writing a detailed and legally reviewed will. For British, Canadian, Australian, and American retirees in Portugal, having separate wills in Portugal and the country of origin may be beneficial. It is recommended to seek assistance from a trustworthy professional who can provide legal services and ensure that you avoid any legal 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.
Having a solid financial plan in place and a trusted advisor's guidance can help ensure that you have the resources and knowledge needed 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 with the immigration process to Portugal.
Two essential steps in getting started are obtaining a Portuguese tax number (NIF) and opening a bank account. These are necessary to be able 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 get in touch with 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, e.g., the Portugal D7 Visa.
What are the cons of living in Portugal?
This hugely depends on the individual person. Some people may find that the downside of retiring to Portugal is the bureaucracy and slower pace of life. Some may struggle initially with the Portuguese language, but language classes can help with that. For English-speaking expats, this process isn't so daunting, as English is commonly spoken in major cities. For those intending to live in a small town, this could be a significant challenge.
Where do most expats retire in Portugal?
Many expats retire in the Algarve, in cities like Lisbon or Porto, or in areas like 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 choose to 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. When it comes to satisfying visa and residency requirements, each process is different, and some can take longer and require more paperwork, but generally, especially with the help of an expert, the process is quite straightforward.
What are the benefits of retiring in Portugal?
There are many benefits of retiring in Portugal. Most expats who retire in Portugal do so because of its fantastic climate, beautiful beaches, relaxed way of life, excellent healthcare, and low cost of living (Portugal is considered one of the most affordable European countries). Moreover, because Portugal is part of the EU, expats can access all the perks of being an EU resident, such as free movement and travel.
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 countries in the European Union, allowing you get more out of your retirement savings. The country often ranks highly in international living indexes for the quality of life it offers. Additionally, 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 as well.
What are the downsides of retiring in Portugal?
There are a few potential downsides you may want to consider when weighing up the retiring in Portugal pros and cons. 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.
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 benefits, 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.
