Retire in Portugal 2024: A Guide to Retirement

With an affordable cost of living, a sublime climate, developed infrastructure, and excellent healthcare services, Portugal attracts senior foreigners from across the world.

Not to mention that, compared to many Western European countries, Portugal’s living expenses are generally lower, making it an attractive option for retirees.

According to International Living’s Top Ten Places to Retire, Portugal was selected as one of the best destinations for retirees. With gorgeous landscapes, friendly locals, and culturally rich, historic cities, it’s easy to see why.

Portugal has its own retirement visa options, which coincide with residence permits for retirees looking to settle in the country.

Navigating the path to retiring in Portugal demands a careful understanding of various factors such as legal prerequisites, health insurance, the cost of living, and lifestyle decisions.

This article covers how to retire in Portugal in meticulous detail, to serve as a valuable resource and help you make an informed decision on living in sunny Western Europe.

Why Retire in Portugal?

According to the recent US Retirement Trend report by our Global Intelligence Unit (GIU), Portugal ranks as the world’s second-best country for retirement. This high ranking is attributed to the nation’s pleasant year-round climate, the excellent public healthcare system, and affordable private health insurance options.

Portugal is also renowned for being one of the safest countries in the world and for having a low cost of living, which allows expat retirees to enjoy beautiful beaches and indulge in the world-renowned Mediterranean diet without breaking the bank.

Finally, Portugal’s attractive visa programs and residency permits make it easy for foreigners to retire in the country and enjoy several benefits, including visa-free travel to other EU countries in the Schengen area.

With the Portugal Retirement Visa, also called the Portugal D7 Visa, retirees can use their passive income, such as a social security benefit or rental income, to cover living expenses. Non-EU residents can move to Portugal and enjoy a fulfilling retirement destination that combines comfort, security, and the charm of Mediterranean living.

Portugal Golden Visas also offers a smart way for retirees from non-EU countries to retire abroad. The Portugal Golden Visa is perfect for retirees seeking to make an economic investment in the country and eventually become EU Citizens after five years.

In the section below, you’ll learn more about the top benefits of Portugal retirement.

The Benefits of Retiring in Portugal

From exploring the stunning Atlantic Ocean coastline to enjoying pleasant year-round weather, there are several benefits when considering Portugal for your retirement.

Who can retire in Portugal?

Portugal is a popular retirement destination with a relatively straightforward process for individuals from various countries to retire there. While the specifics may vary based on nationality, here are general categories of people who can retire in Portugal:

EU/EEA Citizens

Citizens of the European Union (EU), European Economic Area (EEA) countries, and the European Free Trade Association (EFTA) nations have the right to live and retire in Portugal without the need for a visa. They can enjoy the same rights as Portuguese citizens in terms of residency.

Non-EU Citizens

Non-EU citizens, including retirees from the United States, Canada, and other non-European countries, can retire in Portugal. However, they typically must apply for a long-term visa or residence permit. Portugal offers different types of visas, such as the D7 visa for retirees, which is designed for individuals with regular income, such as pensions, to support themselves in Portugal.

How to retire in Portugal?

To qualify for Portugal’s retirement, both men and women need to be 66 years and 5 months old. Residents who have contributed to social security for at least 15 years during their employment in Portugal can qualify for a contribution-based state pension upon retirement.

To retire in Portugal, you’ll need to apply for residency. The process can take some time, but it is relatively straightforward. You’ll need to provide a valid passport, proof of your regular income, health insurance, and further documents and requirements depending on your chosen residency route. You must also submit a criminal background check to the Portuguese authorities. The official immigration service office that you will deal with is the Agency for Integration, Migration and Asylum (AIMA)–formerly known as SEF.

All non-EU citizens must apply for a residence visa to retire in Portugal. Portugal’s retirement visas are the D7 Visa and the Golden Visa. Both visas allow retirees to call Portugal home, provided they fit the requirements.

Visas for retiring in Portugal

D7 Visa (Portugal Retirement Visa)

The popular D7 Visa (also known as the Portugal Retirement Visa and the Passive Income Visa) is designed for retirees able to sustain themselves with their own funding during their stay in Portugal.

The Portugal Retirement Visa income requirement is to earn a passive income equivalent or superior to the Portuguese minimum wage of €820.00 per month. This can include pension income, transferable equity, intellectual property, real estate, or financial equity.

After getting the retirement visa for Portugal, applicants can receive a temporary residence permit, which allows them to legally live in the country. The retiree then can apply for permanent residency in Portugal and possibly acquire Portuguese citizenship, provided the requirements are met.

The Golden Visa Program

The Portugal Golden Visa Program is a residence permit for investment activity. It was introduced by the Portuguese government in 2012 and designed for non-EU citizens who are willing to make a minimum investment in the country.

There are several attractive investment options available for the Golden Visa Portugal. The most popular routes were investing in real estate and making a capital transfer of €500,000; however, as of 2023, these options are no longer eligible for the program. Instead, applicants can invest in a qualified investment fund, create Portuguese employment opportunities, or donate to Portugal’s artistic and cultural projects.

This visa grants applicants and their family members the right to live in Portugal and benefit from the country’s spectacular weather, educational system, and healthcare.

Portuguese citizenship for retirees

Introduced to accommodate different profiles of retirees, both of these visas offer a convenient pathway to acquire permanent residence and Portuguese citizenship. To become a Portuguese permanent resident or citizen, you must legally reside in Portugal for five years and fulfill all the requirements set under Portuguese law.

As an EU citizen, you will have access to free movement across the European Union and the right to live, work, and study in any of the EU member states.

How To Retire in Portugal From The USA

Retirement in Portugal holds considerable appeal for US citizens due to factors contributing to a high quality of life. First, the climate, particularly along the southern coast, appeals to retirees seeking a comfortable and temperate environment.

Portugal is also consistently ranked as one of the safest countries in the world. Low crime rates create a secure and relaxed atmosphere, especially in smaller towns and rural areas. This safety factor is often a significant consideration for retirees seeking peace of mind during their retirement years.

Portugal has a stable political environment, providing retirees from the US with a sense of security and predictability.

The cost of living in Portugal is affordable, especially when compared to the United States. Housing, transportation, and everyday expenses can be more budget-friendly, allowing retirees to maintain a comfortable lifestyle without the financial strain often associated with retirement in some other European destinations.

While Portuguese is the official language, many Portuguese people speak English, especially in major cities like Lisbon. Additionally, Portugal has a growing expatriate community, and English-speaking services are available. This can facilitate easier integration for US citizens who may not be fluent in Portuguese.

How To Retire To Portugal From The UK

Retirement in Portugal is an attractive prospect for UK citizens, especially after Brexit, who do wish wa to retire in the UK. With its array of visa options for retirees, Portugal offers a pathway for UK citizens to live in Europe legally.

Portugal also offers a cost of living that is generally more affordable than the UK. Housing, groceries, and daily expenses can be budget-friendly, enabling retirees to maintain a comfortable lifestyle without compromising on quality. The affordability factor is especially appealing for UK citizens considering their retirement finances.

In addition, Portugal’s Mediterranean climate, characterized by mild winters and warm summers, provides a stark contrast to the often unpredictable weather in the UK. The abundance of sunshine and generally mild temperatures along the southern coast, including the Algarve, appeals to UK citizens seeking a sunnier and more temperate environment for retirement.

What You Need To Know Before Retiring in Portugal

Portugal’s living costs for retirees

Portugal remains one of the most affordable European countries. The cost of living in Portugal is very reasonable compared to other European countries or the US. It is generally lower than in many Western European countries, making it an attractive option for expats and retirees.

You can live comfortably with a monthly budget of €1,300-€1,500 in small towns or €1,700 in larger urban areas such as Lisbon or Porto. Groceries, eating out, rent, utilities, and health care are especially affordable in Portugal.

For comparison, the cost of living in Portugal vs the US is 39.2% lower, and rent is 54.2% lower than in the United States. Compared to the UK, the cost of living in Portugal is 35% lower, and rent is almost 40% lower.

Health care for retirees

Health insurance in Portugal has universal coverage thanks to the country’s publicly funded National Health Service (called the Serviço Nacional de Saúde, SNS). It is very affordable for Portuguese citizens and legal residents and covers basic health needs, accidents, and illnesses.

Portugal’s health care is excellent, but it might not match your standards, especially if you have had private health care in your country. Portugal’s SNS is almost, but not entirely, free; you’ll need to pay a small amount for certain treatments or procedures.

Please note that while you are in the process of securing your residency visa, you will need to have private health insurance. When you are a resident of the country, you can retain your private insurance, should you so desire.

You can easily subscribe to private health insurance for foreigners at an affordable price. Private health insurance could cost between €20 and €50 a month, depending on your needs and required services. This means you can pay anywhere between €400 a year for a basic plan and €1,000 yearly for more well-rounded coverage.

Portugal’s inheritance law and wills

To retire in Portugal, it’s important to understand the inheritance tax rules. According to the Portuguese government, this tax is governed by the home nation of the deceased. What this means is that unless stated in a will, your estate will be handled and taxed according to the inheritance laws of your respective country.

Buying property in Portugal

With a diverse and stable real estate market, buying property in Portugal is a great investment to make. Due to Portugal’s popularity, the country has seen an increase in real estate purchases from foreign investors in the last years, leading property prices to rise. However, Portugal’s real estate is still cheaper than in many other EU countries. It provides incredible real estate options,  from typical houses and modern apartments to old buildings and barns available for renovations.

Typically, properties located in Portugal’s biggest cities, such as Lisbon and Porto, will be more expensive than properties located in the Silver Coast or the central region of Portugal. If you choose to retire to Lisbon, Portugal, you’ll find that the capital has its own price range, although if you look for properties outside the city center, you may find some bargains.

You will need to have a tax identification number (NIF number) to carry out any financial transactions in the country, which includes buying a property. We also recommend that you open a Portuguese bank account, as having a local bank account avoids foreign transaction fees.

If you are buying property in Portugal, make sure that you are aware of the associated taxes that come into play, such as IMT tax, IMI, and Stamp Duty Tax. You can learn more in our article on Property Tax in Portugal

What is The Best Place To Retire in Portugal?

There are several amazing places for retiring in Portugal, so your destination will depend on your personal preferences, lifestyle, and circumstances. If you are looking to live in a buzzing city with lots of entertainment, restaurants, and top health services, Porto or the cosmopolitan Lisbon are ideal choices. Close to Lisbon, the Portuguese Riviera is also a great but more quiet location.

Below is a list of the five best places to retire in Portugal in 2024.

Retire in Lisbon

Lisbon, the capital city, is known for its vibrant culture, historic architecture, and a diverse range of activities. It has a mild climate, excellent healthcare facilities, and a relatively lower cost of living compared to other Western European cities.

The Portuguese capital is particularly appealing to retirees who have an active lifestyle and want to be close to the country’s hustle and bustle.

Living in Lisbon offers vibrancy and excitement, so retirees will never run out of things to do there.

Retire in Porto

Considered one of the best Portuguese cities for expats, Porto is Portugal’s second-largest city, famous for its picturesque riverside, historic wine cellars, and charming atmosphere. Retirees can enjoy a slower pace of life, explore the city’s cultural offerings, and take advantage of the lower living costs compared to other European cities.

This port city also boasts a glorious location in the Douro Valley, one of the oldest wine regions in the world. Retirees can spend their weekends wine-tasting in the local vineyards and taking scenic cruises through the river.

Retire in Cascais

Located on the Portuguese Riviera, Cascais is a coastal town known for its beautiful beaches, well-maintained parks, and upscale lifestyle. Retirees can enjoy a relaxed environment, outdoor activities, and easy access to Lisbon, making it an ideal location for those seeking a mix of tranquility and city life.

Cascais is known for its luxurious properties that cater to expats seeking a comfortable and indulgent lifestyle. You can read more in our article on buying property in Cascais.

Retire in Faro

Faro, the capital of the Algarve region, offers a peaceful and laid-back lifestyle. The Algarve is famous for its stunning beaches, golf courses, and warm climate. Faro itself has a historic Old Town, providing retirees with cultural experiences, while the region as a whole offers a variety of outdoor activities.

In fact, the Algarve is the best place to retire in Portugal and is also the most well-known for retirement, and for a good reason. Its incredible beaches, warm water, and endless sunshine make it an incredible place to live. The existing English-speaking community means that there is a considerable amount of administrative support available to help take care of the Portuguese retirement process.

Retire in The Silver Coast

Those looking for a less developed and more authentically Portuguese region pick the Silver Coast or the central region of Portugal. You’ll find plenty of peaceful and tranquil areas filled with nature and space.

Retirees considering the Silver Coast will find a diverse range of options, from historic towns with cobblestone streets to beachfront communities offering a laid-back lifestyle. The region’s mix of culture, natural beauty, and affordability make it an attractive choice for retiring in Portugal.

If you are looking to retire in Portugal from the USA, you’ll be joining many fellow American expats who have fallen in love with Portugal. Many US expats can be found in Lisbon, Porto, and the Algarve, enjoying the sundrenched beaches, exciting cities, and pristine landscapes. You’ll also come across many a UNESCO World Heritage Site in Portugal. At present, there are 17 World Heritage Sites listed in Portugal, with a further 19 on the tentative list.

Retiring in Portugal: What to Expect

Retiring in Portugal offers a unique and enriching experience, combining a favorable climate, rich cultural heritage, and a welcoming atmosphere. Here’s what you can expect when retiring in Portugal.

Big expat community

When retiring in Portugal, you’ll be greeted by many international retirees from all corners of the globe.

The expat community is big and continues to grow in Portugal. The Algarve region in southern Portugal is the most popular destination for retirees, and there are many British and American retirees settled here already. With a large English-speaking population, you’ll feel quickly welcomed.

There are also many expat community groups you can join. Platforms like InterNations and Meetup are great ways to meet like-minded people and make friends.

Cultural richness

Portugal is steeped in history and culture, with picturesque cities, historic landmarks, and a vibrant arts scene. Retirees can immerse themselves in the local way of life, attend cultural events, and explore diverse traditions and festivals.

Favorable climate

Portugal’s Mediterranean climate is characterized by mild, rainy winters and hot, dry summers. The southern regions, particularly the Algarve, enjoy a sunny climate, making it an ideal destination for those seeking a comfortable and temperate retirement.

Diverse landscapes

From golden beaches along the Algarve coast to the lush vineyards of the Douro Valley, Portugal offers diverse landscapes for retirees to explore. Whether you prefer coastal living, countryside tranquility, or the energy of urban centers, Portugal has a setting to suit your preferences.

Outdoor activities

Portugal’s diverse geography provides ample opportunities for outdoor activities. Whether you enjoy golfing, hiking, or simply strolling along the beach, retirees can stay active and enjoy the natural beauty of the country.

Culinary experiences

Portuguese cuisine is known for its fresh seafood, flavorful wines, and a variety of regional dishes. Retirees can indulge in the culinary delights of local markets, traditional restaurants, and cultural festivals.

Travel opportunities

Portugal’s strategic location within Europe allows retirees to explore other European countries easily. The well-connected transportation network makes it convenient to travel within Portugal and beyond, providing retirees with opportunities to discover new destinations.

Taxes For Retirees in Portugal

While you cannot retire tax-free in Portugal, the Non-Habitual Residence (NHR) program has excellent tax benefits for foreigners. If structured correctly, you can significantly reduce your tax burdens by paying less tax on your retirement pension.

If you become a tax resident in Portugal, you must declare your worldwide income each year and pay taxes in Portugal, including income tax. The NHR program, however, may allow you to pay a lower tax rate on your retirement pension, with the possibility of paying no tax on certain other incomes from outside Portugal.

American citizens will probably face double taxation due to the tax regulations in the USA. Other countries may have double tax treaties to alleviate tax pressures. For financial planning and to manage your tax affairs, including potential exceptions that you may be entitled to, we recommend speaking with tax specialists to manage your tax affairs best.

Important Note: The NHR Regime will no longer be available for new applicants in 2024. The scheme will be replaced by another tax regime. Read more here: Is The Portugal NHR Program Ending?

Tips for Retiring in Portugal in 2024

Planning for retirement in Portugal involves carefully considering various aspects to ensure a smooth transition. Here are some practical tips to make your retirement in Portugal a success:

Plan Your Budget

To maximize your retirement savings, make sure to factor in costs such as rent deposits, moving charges, legal fees for visa applications or residency processes, and purchasing essential items for your new home. Consider whether you’ll need to purchase furniture and appliances for your new place. To manage costs, you might explore both new and second-hand options.

Include expenses for setting up essential services like phone, internet, cable connections, and utilities. Compare service providers to find the most cost-effective options.

Hire an immigration lawyer

Consider hiring a Portuguese immigration lawyer to guide you through the residency process. They can help with paperwork, ensure compliance with regulations, and provide valuable advice on navigating the legal aspects of your move.

Private health insurance

While Portugal has a public healthcare system, having private insurance can provide additional coverage and faster access to medical services. Evaluate different insurance plans to find one that suits your needs and budget.

Learn the local language

While many Portuguese residents speak English, especially in urban areas, learning the local language (Portuguese) can enhance your daily interactions, help you integrate into the community, and make your retirement experience more immersive.

Understand tax implications

Familiarize yourself with the tax implications of retiring in Portugal, both in your home country and in Portugal. Consult with tax professionals to optimize your financial situation and ensure compliance with tax regulations.

Embrace the local lifestyle

Embrace the local lifestyle, participate in cultural events, and explore Portugal’s rich traditions. This will enhance your retirement experience and foster a sense of belonging in your new community.

Frequently Asked Questions about Retiring in Portugal