Retiring in Portugal
Are you considering retiring abroad? Maybe the vision of a relaxed and casual beach lifestyle with warm sands and ocean views is calling you? Or maybe you see yourself sipping coffee at a sidewalk cafe in a bustling city, or visiting museums and exploring your surroundings steeped in history. If any of this sounds appealing, maybe you should consider retiring in Portugal.
With one of the lowest costs of living in Western Europe, affordable healthcare, delicious mediterranean cuisine (and wines!), endless coastlines, and warm people, Portugal is becoming more popular every year as foreigners discover this not-so-hidden gem of a country.
How to retire in Portugal
Now that Portugal is on your retirement radar you’re probably wondering how you can actually retire there as a non-EU citizen. Some of the most popular options are the Golden visa and D7 visa.
Golden visas are available in numerous countries in Europe and the main requirement to qualify for this visa is a significant financial investment. In Portugal the investment ranges from $240,000 to $1.500,000 USD (in a business, real estate acquisition or other options). This is probably the easiest way to obtain residency in Portugal but not the most economical.
If you are looking for a more affordable option, the D7 visa is your best bet! While this visa does not require an investment, it does require proof of minimum passive income roughly $8,500 USD (+ 50% for spouse) per year which can be derived from social security, rental income, dividends or an online business—it’s important to note that as of 2022 many applicants have reported that they have had to show upwards of $20,000 to meet the financial requirements of this visa. Obtaining a D7 visa is a fairly straightforward and easy process; you can apply and be on your way to residency—and eventual citizenship if you so desire after 5 years of residency—in months!
These are just two options but there are others! Need more information to determine which visa is the right path for you? Pick up a copy of I’m Outta Here! An American’s Ultimate Visa Guide to Living in Europe. This digital book covers all of your long-term visa options for Portugal AND 16 other European countries! You’ll find 50+ viable visa options to make your dream of living in Europe a reality!
20 Pros and Cons of Retiring in Portugal
Now, why should you retire in Portugal? The reasons are endless: cosmopolitan cities, picture-perfect beaches, and an abundance of sunny days to name a few. Of course retiring in a foreign country isn’t all rainbows and unicorns—no matter where you choose to retire it’s important to remember that there is no perfect place…but Portugal is pretty close.
The whole journey will be frustrating, amazing, overwhelming, exciting, exhausting and beautiful…sometimes all within the same day! But it’s so worth it. Let’s dive into the 20 pros and cons of retiring in Portugal.
The biggest pro of retiring in Portugal is 300 days of sunshine! Sunny days and mild winters make it an appealing retirement destination. Southern Portugal is typically warmer throughout the year, and the northern region (Porto and above) offers a moderate climate with rainy, cool winters.
2. Diverse destinations
No matter what you enjoy, Portugal probably has it! If you’re a beach-lover, you’ll find gorgeous stretches of sand and dramatic coastlines. If you’re more of a city person, Lisbon and Porto are two beautiful and buzzing cities. Perhaps you’d like to live in a colorful village with ancient ruins? Head to Alentejo. Like to surf? You’ll love Nazare. Dreaming of retirement on an island? Google the Azores and Madeira—you’ll be speechless! Portugal may be small but it has so much diversity to offer!
3. UNESCO World Heritage Sites
Portugal is home to over 17 UNESCO World Heritage Sites and 14 more awaiting approval. Visit the iconic Belem Tower, the historical Jeronimos Monastery, northern Portugal’s 10th-century Guimarães Castle, or the prehistoric rock art sites in the Côa Valley.
4. Culture throughout the country
If you are a culture-junkie, Portugal has no shortage of arts and entertainment. There are museums and art galleries throughout, top-name entertainment, professional sports and concerts in the big cities. Local festivals happen year-round and historic palaces and monasteries are not to be missed! You’ll be mesmerized by the magnificent azulejos— Portugal’s famous painted tiles that adorn buildings, walls and train stations. Spain has Flamenco music and Portugal has Fado; their hauntingly beautiful traditional music.
5. Delectable cuisine
Portugal’s food scene is very underrated! The country boasts 28 Michelin starred restaurants but the true culinary gems are the local, family-run places in every city, town, and village. Popular traditional dishes are bacalhau—codfish cooked a zillion different ways—the famous messy but tasty Francesinha sandwich, bifana—a mouth-watering, thinly sliced marinated pork sandwich—and the most delectable, delicious, and decadent dessert, the pastel de nata—the mother of all custard tarts.
6. Portuguese wines
Pair your delicious local food with a local wine. With over 200 indigenous grapes grown in 14 regions such as the Douro Valley and the Dao, you’ll find refreshingly chilled Vinho Verde (green wine), rich robust reds, heavenly white and iconic port wine. You’ll not only love the flavors but also the affordable prices. Saúde! (cheers!)
The World Health Organization rated Portugal 12th in the world in overall healthcare efficiency and has received high marks for patient-centered care and health outcomes. Although Portugal has universal healthcare, public healthcare available to all who reside in the country, as a retiree you will need to purchase private health insurance. Private insurance is very economical, especially compared to private plans in the U.S. Expect to pay anywhere from $1200-$1500 USD per person, per year—yes, you read that right, per year!
As the U.S. feels like it’s becoming more unsafe, it’s comforting to know that Portugal is a safe place to retire. Crime rates are some of the lowest in Europe, most crimes are non-violent, and gun ownership is heavily restricted and licensed (self-defense is not considered a legal reason for owning a firearm). The country is ranked #4 in the world for safety by the Global Peace Index (the USA ranks 122, Canada is 10, and the UK is 33.) However, petty theft such as pickpocketing is an issue in the tourist areas, as is the case in many popular cities in Europe.
9. Proximity to other countries
Located on the western coast of Europe, Portugal shares a border with Spain. It’s easy to pop on over by car, train, or plane—or with your own two feet via the Camino Santiago. If you want to go further, hop on a quick and cheap flight to France, Croatia, Italy or Greece for example. Affordable and easily accessible, Europe is at your doorstep.
10. The D7 visa
The best reason to retire in Portugal is by far the D7 visa! An uncomplicated, quick and nearly painless residency visa that can pave the path to citizenship after 5 years. The requirements for the D7 are fairly easy to meet. Learn more about the process and the requirements in I’m Outta Here! An American’s Ultimate Visa Guide to Living in Europe.
11. Non-Habitual Resident (NHR) tax scheme
A big draw for retirees is Portugal’s Non-Habitual Residence (NHR) tax regime. The NHR offers foreign residents a generous tax break. Under this tax scheme overseas income is not taxed in Portugal for the first 10 years of residency or citizenship. Note: there is a 10% tax on foreign pension income (including social security). Be sure to consult a certified and experienced tax attorney for more details.
12. Cost of living
Portugal is the most affordable country in western Europe. It’s important to highlight that while it’s inexpensive for many foreigners, the cost of living is considered high for locals. Like anywhere, cost of living will vary from major cities to small towns as well as your needs, lifestyle and spending habits. But to give you an idea, a single person can live comfortably in Lisbon for less than $3500 USD/month, other cities for $2500 and for much less in a town or village.
No matter where you choose to move abroad bureaucracy will be a part of your journey. However, in some places bureaucracy can be more painful than others. Prepare yourself for endless paperwork, frustration, slow responses to emails and phone calls—for everything from utility companies, internet providers, the IMT (DMV equivalent in Portugal). The best method to deal with bureaucracy is to practice patience and manage your expectations.
14. Customer service
Americans are used to a customer service culture that truly caters to you and is available 24/7 (or close to it). For example in the U.S. you can often call your bank/internet/gas company at 8:00 PM on a Sunday night or log into your online account and solve a problem. Unfortunately, this isn’t the norm in Portugal. The culture of customer service is different abroad so you’ll need to exercise patience once again here. But hey, the lack of on-demand customer service is part of the slow life we all want to experience in retirement, right?
15. Learning a new language
Learning a new language can be both a pro and a con! English is much more widely spoken in Portugal than its neighbor, Spain, but that does not mean that you can get by on English everywhere. You’ll find locals who speak English in larger cities like Lisbon and Porto as well as in the tourist areas of the Algarve. But to truly integrate with the Portuguese and their culture you’ll need to learn the language—as we all should attempt to do when living in another country.
Learning European Portuguese (vs. Brazilian Portuguese) will help you talk to your neighbors, make Portuguese friends, assimilate into the culture, and effectively deal with the aforementioned bureaucracy. The Portuguese government offers free language classes and should you be interested in gaining citizenship down the line, you’ll you’ll need pass the A2 level (basic) language exam.
16. Dog poop and dog barking
Picking up after Fido on the sidewalk isn’t as de rigueur as it is in the USA. You’ll definitely need to be mindful of where you step in some places. Dogs are also known to bark incessantly when home alone and even when their owners are home. If you’re living in close quarters in a city like Lisbon or Porto this can be a nuisance.
17. Lack of diverse cuisine
Bacalhau—Portugal’s signature fish—is tasty and pasteis de nata are amazing but sometimes your tastebuds want something different. If you’re craving Thai, Indian, or other world foods then you’re going to have to do some detective work to find a good restaurant with international flavors. International cuisine exists in Portugal but it’s not as prolific. You’ll find more options in bigger cities but hard pressed to find much more than Portuguese food in towns and villages.
18. Difficulty integrating
As a foreigner who may not speak the language yet, you may find it difficult to make local friends and integrate into Portuguese social circles. Locals socialize and work with other Portuguese, especially outside the main cities. They often have friend circles that span decades and also spend a lot of their time with family.
You will meet locals who want to socialize and but it can be challenging to foster deeper relationships. Our best bit of advice is to learn the language! Volunteering is a great way to meet people as well as attending meetups. Show up, smile, make the first move. With a bit of proactivity and patience you’ll soon make Portuguese friends. And if you get impatient the fastest way to make new friends is with fellow expats and retirees.
While it’s become passé to smoke cigarettes in the U.S. people in Europe still smoke and very much so in public places. It’s not uncommon to see (and smell the fumes of) smokers at restaurants, bars, and outside in cafes. Portugal isn’t nearly the worst but it’s definitely noticeable.
Like most beautiful locations around the world, parts of Portugal have been affected by over-tourism; Lisbon, Porto and the Algarve in particular. What used to be a hidden-gem is not so much of a secret anymore, you’ll find plenty of tourists and expats in Portugal, This has contributed to the rising costs of living for locals. Keep this in mind when you choose your retirement location and when buying property abroad.
Retire in Portugal
Retiring in Portugal might just be one of the best decisions you make! Imagine living in a beautiful country with rugged coastlines, Insta-worthy beaches, stunning volcanic islands, cosmopolitan and vibrant cities, award-winning wines, and quaint stone villages with cobblestone streets. If you’d like to learn even more about living in Portugal check out this guide. Muitas felicidades! (best wishes!) on your retirement journey!