How to Retire in Portugal

Retirement in Portugal is increasingly popular. People from EU and non-EU countries are planning to spend their golden years in Portugal. Portugal is an ideal place to retire in the sun, but it’s much more than that. Portugal has an exceptional climate, location, cuisine, quality life, and at an affordable cost. You may ask: “How do I retire in Portugal?” With the proper preparation, you can move to Portugal and live your best life, even if you are not rich.

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Who can retire in Portugal?

If you are an EU citizen, you have a fairly easy path toward retiring in Portugal. Once you have applied for residency, you can enjoy many of the same benefits as the Portuguese. As an EU citizen, you can apply for a residence permit at any of the regional offices of the Portuguese Immigration Service or SEF (Servico de Estrangeiros e Fronteiras). You can find the office closest to your location of regional offices here. All non-EU citizens interested in retiring in Portugal must apply for a residence permit in their home country. For more information, contact the nearest Portuguese consular to your home.

What are the requirements to retire in Portugal?

If you want to retire in Portugal as a non-European Union citizen, you will need to meet the country’s current residency requirements. The process to apply for a residency permit isn’t too complex, but dealing with bureaucracy in any country can be challenging.

Generally, you will need to provide the following to get a residency permit to retire in Portugal:

Visa application form
1 photo – size 3 x 4 cm
Passport – valid for three months or more from departure date
Proof of sufficient income
Health insurance
Proof of accommodation – generally, a rental agreement or property deed (if you own your property in Portugal)
Criminal background check

You need to start the process in your home country, working with the Portuguese consulate. Expect the Type 1 Resident Visa process to take several months, so don’t leave it to the last minute. It would be best if you had your application taken care of within three months of moving to Portugal. Although the process takes an effort on your part, it will be worth it when you’re enjoying retirement in a sunny European country.

Requirements for EU citizens retiring in Portugal

If you are an EU citizen, retiring in Portugal is much easier. Once in Portugal, you must apply for a residence permit at the local town hall. Alternatively, you can also apply at the office of the immigration authorities. You need to do this if you plan on staying in Portugal for more than three months. You need to take care of this within 30 days of arriving in the country.

Arriving with a valid EU passport, the only requirement is proof that you can financially support yourself. The certificate is valid for five years.

How much money do you need to retire in Portugal?

How much money you need to retire in Portugal has a lot to do with your spending habits. But, generally, about $1,500 should be sufficient. With that amount of monthly income, you can retire comfortably in Portugal.

How much does a couple need to retire in Portugal?

Portugal is one of the most affordable countries to retire in Western Europe. In the interior of Portugal, a couple can retire on an $1800 monthly budget. But if you prefer to spend your golden years on the coast of Portugal, you need to increase your monthly budget to $2300 to $$2500.

How can a US citizen retire in Portugal?

Under Portugal’s retirement residency law, citizens of the United States who are interested in retiring in Portugal must apply for a residence permit at a Portuguese consular. They must apply in the United States before moving to Portugal.

Is US Social Security taxed in Portugal?

US citizens living in Portugal for longer than six months during a fiscal year – 01 January-31 December – have dual tax obligations. As a resident of Portugal, you must declare your income, regardless where its origin – to the Portuguese Tax Authorities. Simultaneously, as an American, you must file an annual tax return with the IRS.

The United States has a Totalization Agreement with Portugal. The agreement has been put in place to reduce dual coverage and taxation for people working overseas. This agreement between the US and Portugal also intends to close gaps in benefits coverage for those who may live in the United States and another country. The Totalization Agreement relieves double taxation for Americans residing in Portugal.

Are US pensions taxed in Portugal?

Under the terms of the Double Taxation Agreement between the United States and Portugal, Social Security pensions are taxed at the source. Therefore, if you receive your pension from the US, you will be taxed in the US. According to the agreement, Portugal grants a tax credit equal to the US levy.

To avoid double taxation, you must complete IRS form 8833 – Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b)- as part of your yearly United States tax declaration (form 1040).

Where do most American retirees live in Portugal?

American retirees generally live in the urban areas of Portugal. Cities are popular places to live for Americans because of a higher percentage of English-speaking locals, easy access to transportation, and active social life. Here are three of the most popular areas for American retirees in Portugal.

Why Retire in Lisbon

For many people, Lisbon is synonymous with Portugal. It is the oldest city in Western Europe. Lisbon is perhaps the best place to easy into the Portuguese culture. In Lisbon, you can enjoy warm winters, compared to most other European cities. Lisbon is small enough that you won’t need a car if you decide to retire there.

For less than $2000 per month, you can retire comfortably in Lisbon. That is a bargain for Western Europe.

Here are a few reasons Americans want to retire in Lisbon, Portugal:

Affordable
English widely spoken
Walkable
Friendly locals
Mild climate
Excellent food
Easy to reach

Why Retire in Porto

Friendly locals, great food, and quality of life are only a few reasons why Porto is a popular destination for American retirees. Porto is a beautiful city. Its red tiles roofs, architectural meanderings, and natural splendor offer something for everyone.

Here are a few reasons Americans prefer to retire in Porto, Portugal:

Fantastic food
Friendly people
Low crime
Vibrant nightlife
Easy access to nature
Relatively inexpensive real estate
Good public transportation
Many options for shopping and entertainment
Excellent wine

Why Retire in Cascais

Cascais is only 20 miles west of Lisbon. This traditional fishing port is an excellent choice for Americans to retire for multiple reasons:

Friendly, welcoming locals
Outdoor living
Beautiful beaches
Coffee culture
Short and mild winter
Only a 40-minute train ride to Lisbon
Easy access to nature and outdoor activities
Safe

Where do expats retire in Portugal?

The Algarve region is one of the most popular English-speaking retirees. Many expats retire in Porto, Aveira, Évora, Viana do Castelo, Vila Real, Lisbon, Guarda, and Bragança.

Where is the best place to retire in Portugal?

The most popular places to retire in Portugal are Porto, Cascais, Madeira, Guimaraes, and Lisbon. But the best place to retire in Portugal is somewhere you enjoy living. And the only way to find out is by exploring several areas in Portugal. Just because a city or area is popular doesn’t mean that you will enjoy living there. See for yourself and make up your own mind.

For those who love the ocean, the best place to retire is at the coastline. If you want to be close to Lisbon, but not in the middle of the hustle and bustle, you should check out Cascais. With its reliably nice weather, excellent restaurants, and romantic beaches, Cascais might just be the place for you to retire.

Is there free healthcare in Portugal?

There is universal healthcare in Portugal. It is a free healthcare system, but it is only available to legal residents of Portugal. If you are on a short visit from an EU country, Switzerland, and European Economic Area (EEA), you can access the Portuguese healthcare system.

Local residents are required to pay a small contribution toward some costs for hospital treatment, prescriptions, doctors, and specialists, except those from a low-earning or vulnerable group. Dental care costs require out of pocket costs.

Is it better to retire in Portugal or Spain?

You are the only one who can determine if it’s better to retire in Portugal or Spain.

Both Spain and Portugal can be great locations to retire because:

Located in the EU
Have excellent transportation hubs
Schengen countries – ease of travel to other EU countries
Good public transportation
Universal healthcare
Low crime
Lower cost of living than other Western European nations

Pros and Cons of Retiring in Portugal

Portugal can be a wonderful place to retire. But like any other country in the world, there are pros and cons of retiring in Portugal.

Pros of Retiring in Portugal

Friendly locals – If you retire in Portugal, you will find the Portuguese to be warm and welcoming.
Cost of living – You can retire in Portugal with a monthly budget that is less than half that would be necessary for the US.
Excellent climate – If you like mild winters and dry summers, you will love Portugal.
Safety – Portugal is a safe and secure country.
Good medical care – Portugal offers universal healthcare for residents. Optionally, you can purchase private health insurance.
Inexpensive property – In many areas of Portugal, you can still find great property values.
Outdoor living – There is lots to do in Portugal. You can enjoy stunning beaches and walks in the countryside and everything in between.
Easy access to and from – With three international airports you have easy access to countless international destinations from Portugal.

Cons of Retiring in Portugal

Bureaucracy – Unfortunately, this isn’t unique to Portugal. Bureaucracy can be an issue in any country, Portugal is no exception.
Language – For some people, learning Portuguese can be challenging. You don’t have to speak Portuguese to retire in Portugal, but you will enjoy your time there more if you learn the language.
Driving can be stressful and expensive – The steep picturesque roads weren’t really built for car traffic. Toll roads and expensive fuel can really add up. Driving in Portugal can be pretty expensive.
Damp winters – Some areas in Northern Portugal have cold and damp winters.
Poor insulation – Many homes, especially old homes, have poor insulation.