Retiring in Portugal: Start a New Life in Paradise

Are you clocking your retirement days and you’re looking for the most comfortable place to retire? Portugal is one country that you should consider going too.

The country has an accommodating culture, an attractive climate, and a friendly cost of living as we shall explore in this article.

These facts about Portugal have garnered the country many impressive ranks across the years.

In 2022, the Annual Global Retirement Index 2022 ranked Portugal as the fourth best country to retire to after Panama, Costa Rica, and Mexico.

The country was in fact ranked first by the index two years back. In comparison with other European countries, many are better than Portugal economic wise, development etc.

These are features that aren’t necessarily priority for retirees especially those considering retiring in Portugal.

 

About Portugal

According to World Population Review, Portugal is a first world country. It is a diverse in culture with several heritages including those recognized by UNESCO.

The meals served are exquisite and a bottle of wine is never too far in accompaniment.

Portugal is located in Europe’s South West and borders the Atlantic Ocean to the West.

The country covers approximately 92,226 square kilometers and its population is just about 10 million with urban areas more populated than the rest of the country.

Portugal’s capital city is Lisbon while the second biggest city is Porto. The country’s official language is Portuguese though many people know English too.

Below we explore facts that interest most persons wishing to retire in the country.

 

Cost of Living

Depending on the place you choose to stay, it will cost a couple between $1,000 and $2,000 to cater for their monthly expenses in Portugal.

This typically includes rent, food costs, TV subscription, internet charges as well as travel expenses. Urban areas will always be more expensive than those located far from the city.

Numbeo estimates that the cost of living in Portugal is 30% less than it is in the United States.

It is also significantly less in comparison with most European countries.

 

Real Estate

A retiree has two options when it comes to housing; renting or buying property. Like it is with buying your own house, rent varies relative to locations.

A family unit in a less developed surrounding will go for $750-$1,400 while the upper end of that rages between $1,200 and $3,000. The latter is very luxurious though.

If you intend to stay in the country for most of your time and across several years, it is comparatively cheaper to buy property instead.

There is no restriction whatsoever on purchasing fixed property as a foreigner. One just has to meet the stipulated guidelines.

In Lisbon, a square meter of land goes for $4,500-$15,000 relative to the amenities on the premises. Places elsewhere will be sold-off at $1,500-$7,500.

Properties are not likely to have modern facilities like air conditioning and heaters though. Refrigerators are relatively smaller too in comparison by the American standard often because food is readily available.

Architecture in Portugal enjoins ancient techniques together with modern inventions often producing very spacious buildings.

It’s not uncommon for instance to find houses partly built as the 1700 granite structures.

 

Traveling

Traveling within urban settings is easy. Transport infrastructure is well developed giving one options to choose from.

A metro ticket for travels within the city is roughly $2.5 while a bus ticket goes for $3. The other alternatives are Uber and taxes.

Moving out of Lisbon may require a train. It costs $60 to travel to Porto a journey of roughly two hours and forty minutes.

It is more convenient to buy a personal car if you live outside urban centers though. Driving in the country requires a vehicle inspection certificate, reflective jackets (for the driver and each passenger) among others.

At any one point on the road, the police may ask you to stop upon which, they will inquire about any of these items.

Failure to present any may attract a fine. Gas costs around $2.25 a liter. Most highways also have road tolls.

Traveling abroad requires that you have a Portugal Visa. There is also freedom of movement across European Union (EU) member states.

 

Food

Portuguese food is mostly natural and fresh. Predominantly, it composes of fruits and sea foods like shrimps and tuna.

Desserts are a common feature too, not least Portuguese custard tarts. Dinner goes for $20-$40. Lunch is usually less expensive. The meals are often sumptuous. You are not likely to finish the share served.

Wines attract $3 and $ if it is a good label. Beer prices are around $1 as well as a cup of coffee.

 

Necessary Documents

1. EU Residents

If you are a citizen of an EU country, then it is easy to retire in Portugal. All that is required is to apply for a resident permit. The application process can be done at any SEF (Service de Estrangeiros e Fronteiras) offices or through their website.

Once allowed to live in the country, this category of retirees will pretty much enjoy all privileges available to Portuguese citizens.

You will also have to apply for a registration certificate (a requirement for anyone who seeking to live in Portugal for more than five months).

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Once obtained, you may live in the country for five years. At the expiry of these years, one can apply for permanence residence.

Registration certificates are accorded by resident local councils.

This process applies to members of the European Free Trade Association too.

 

2. USA Residents

The government easily affords US residents a 120 days stay visa upon providing proof of income (one should be able to indicate that at least $1,070) is available to them per month.

Upon expiry of this period, one can then apply for a renewable one year permit. After the elapse of five years, an individual is permitted to apply for permanent residency.

Applying for residency includes tendering in a passport, proof of income, proof of health insurance, and a criminal background check.

 

3. Non-EU Residents other than those from US

These individuals have to apply for type 1 Visas at the Portuguese consulates within their countries.

They are subsequently expected them in Portugal within three months of application.

Once in Portugal, one such person should apply for a resident permit within six months. The requirements are similar to those required of US citizens when applying for permanent residency.

These are the general rules though they may differ from country to country.

 

4. Golden Visa

An easier way for none-EU residents to secure retirement in Portugal is through the Golden Visa scheme which is a policy by the government in Portugal to attract investors.

To qualify for the package, one has to fulfill one of several commitments pointed out by the government.

The list of requirements include; employing ten Portuguese citizens, purchase $750,000 worth of real estate (provided it isn’t situate in Lisbon, Porto or any of the famous coastal areas), contributing $375,000 towards a cultural heritage,  contributing $750,000 towards a recognized research project, make a capital transfer of $2.25 million etc.

An individual who has satisfied these criteria is free to travel to Portugal and within Schengen area without a Visa (Schengen is a group of 26 member countries that have abolished any documentation and other border restraints at their mutual borders).

Their parent dependents e.g. children, parents, as well as their spouses become entitled to stay in Portugal too.

This only stands if the individual to whom the Golden Visa is issued spends a minimum of seven days in Portugal physically during the period to which the document holds valid.

Upon the passing of five years from when the Visa was issued, a retiree may apply for permanent residence.

 

Tax

All tax residents in Portugal are charged taxes on their worldwide income i.e. taxes a re charged off their investments across the world.

To qualify as a tax resident, one should have lived in the country for 183 days. Retirees however, have an option of applying under the None-habitual Resident Scheme (NHR).

Once approved for the NHR program, an individual is exempted from all taxes relating to their wealth.

A flat tax of 20% is only cutoff profits made in Portugal. This goes on for ten years.

The rate of tax for citizens is almost always higher than 20%. NHR pension taxes are 10%.

Portugal has double tax agreements with all EU member states. Consequently, income taxed in Portugal won’t be taxed again in the rest of countries.

 

Healthcare

Portugal provides quality healthcare at no cost. The Euro Health Consumer Index ranked the country’s health system 13th across the European continent.

These services are however, only available to Portuguese citizens. A person retiring in the country will wait five years first, i.e. until he or she obtains permanent residence.

The services offered hereunder cover basic health needs, accidents and illnesses too. EU residents can still access these services however, prior to the five years.

This enabled by S1 forms usually provided by their home governments as recognized by Portugal.

 

Health Insurance

An individual applying to stay in Portugal permanently will be asked to submit their international health insurance plan.

This can be localized into a private Portuguese scheme once an individual is accepted in the country.

A private arrangement will aid the recipient to benefit from additional services e.g. dentists.

The cost of insurance for individuals under the age of 55 goes for $7.5 on average. Past that age, an individual will be charged in $150+.

Very few insurance firms will allow insuring an individual who is over 75 years. Those that ho don’t mind about the client’s age are Tranquilidade, Millennium Bank’s Medis, delidade amount others.

 

Pension

The Portuguese state provides pension to individuals that contributed to the social security program for at least fifteen years upon retirement (sixty six years).

The government similarly allows for transfer of pensions from abroad. The process is quite straight forward for EU citizens though individuals from elsewhere might have to consult first with the laws of their country.

Upon transferring pension money to Portugal, the money will be subject to taxing. To avoid heavy taxes on this money, a retiree should apply for NHR.

Portugal has agreements of non-double taxing with several countries and they will apply in these circumstances too.

 

Inheritance

Where an individual dies in Portugal, then the laws of their home country on inheritance applies to their property. Accordingly, wills written abroad are recognized in Portugal too.

Nothing stops an individual from writing a will in Portugal too though. They should however ensure that if there are more than two wills they don’t contradict.

A flat stamp duty of 10% is imposed on beneficiaries except for spouses and children.

 

Internet, Entertainment and Leisure

4G internet is available across Portugal. Almost all restaurants have public WiFi too. Remote locations may be an exception though.

You might have to specifically check with your intended location if it falls in the latter category.

A range of entertainment is available to you too. TV subscriptions will allow you access to broadcasting across the world.

You can also stream-in to channels that might not be accessible on cable. Going to the movies goes for anywhere between $7.5 and $15.

Netflix on the other hand ranges from $12-$19.5 per month.

Clubs are in plenty too. You will pay around $30 per night. Subscription to a gym costs roughly $60 a month.

Other pursuits available to a retiree in this regard are soccer, basketball, and tennis. You will pretty much find any other fun activities too.

 

Popular Places to retire

a) Algarve

Located along the southern coast, Algarve is probably the most attractive destination in Portugal. It offers a comfortable life punctuated by beautiful nature and modern amenities.

Algarve has clifftops and beaches as well as world class infrastructure.

Winters in this area tend to be too cold though. The standard of living in Algarve is also relatively higher than most regions of Portugal.

In 2021 for instance, a square meter of land was estimated at over $ 3,000.

 

b) Lisbon

Lisbon is Portugal’s capital. It is the go to area for an individual who even in their retirement would like to work to some degree.

It is well connected and has all facilities that characterize cities in the modern day. There is a lot of different cultures too and this is reflected in the trends and fashions of the day.

A square meter of land in Lisbon will approximate cost $4,800. The other challenge is parking space for persons with private cars.

If you should have a car, then you’re likely to pay for its parking on routine. The city is also more densely populated than any other place in the country.

 

c) Madeira

It is another coastal state popular for tourists and ideal for one intending to retire. The cost of living there is reasonable especially in contrast with other popular areas.

A home in the area costs roughly $2,700 per square meter.

Temperature in Madeira is usually 24°C in summer and 19°C during winter.

 

d) Cascais

Cascais is located along Portuguese Riviera a populous coastal area known for its luxury and being attractive to European Royalty.

Its location is only a thirty minutes drive from Lisbon. The location is characterized by high-end shopping places not least as Estoril and Quinta de Marinha.

Property in the area goes for $4,650 a square meter.

 

Other locations

There are several more places that are conducive for retirement. Guimaraes for example; the city is an ancient one located thirty-five miles from Porto.

It harbors several heritages including those recognized internationally. Many houses are beautifully made in stone. Relaxing points like cafes are also readily available.

Porto is another place to consider. It is the country’s second largest city and as such has infrastructure convenient to support a comfortable retirement.

At an estimate of $1,300 per square meter, property in the city is much cheaper than those we have looked at already.

 

Consulting

We have looked at the general picture of retiring in Portugal and from this you will find yourself interested in particular aspects. This is where consultants come in.

These are usually experts who offer guidance on what to expect and how to make the available amenities work for your interests.

This comes at a friendly price and you can find them online.

Examples here are Holborn Assets and Golden Visa.

A consultant who shares information that is related to what we have already pointed out is one can count on.