Retiring in Portugal: The Essential Guide for 2024

Retiring in Portugal is an attractive option for many due to its affordable cost of living, pleasant climate, strong infrastructure, and high-quality healthcare services. This combination draws retirees from all over the world.

In fact, compared to many Western European countries, Portugal’s living expenses are generally lower, making it a smart choice for those seeking a comfortable retirement.

Portugal is ranked as one of the best places for retirees. It boasts stunning landscapes, welcoming locals, and a rich cultural history.

For those interested, Portugal offers a retirement visa that works alongside residence permits, making it easier for seniors to settle in the country.

When considering retiring in Portugal, it’s important to consider key factors such as legal requirements, health insurance options, the overall cost of living, and your desired lifestyle.

This article provides a comprehensive guide to retiring in Portugal, helping you make an informed decision about starting a new chapter 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 due to the nation’s pleasant year-round climate, excellent public healthcare system, and affordable cost of living.

Portugal is known for being one of the safest countries globally, allowing expat retirees to enjoy beautiful beaches and the renowned Mediterranean diet without straining their budgets.

The country’s attractive visa programs and residency permits make it easy for foreigners to settle in Portugal and enjoy benefits like visa-free travel to other EU countries in the Schengen area.

The Portugal Retirement Visa, commonly called the Portugal D7 Visa or passive income visa, allows retirees to use passive income—such as social security benefits (pension income), rental income, transferable equity, or financial investments—to cover their living expenses. This option is especially appealing for non-EU residents seeking a fulfilling retirement destination that combines comfort, security, and the charm of Mediterranean living.

The Portugal Golden Visa provides another pathway for retirees from non-EU countries. It allows them to make an economic investment in Portugal and potentially gain EU citizenship after five years.

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

The Benefits of Retiring in Portugal

From exploring the stunning Atlantic Ocean coastline to enjoying pleasant year-round weather, there are several more 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, Canadian citizens, 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?

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 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 their social security benefit (pension income), transferable equity, intellectual property, real estate, or financial equity.

After acquiring the retirement visa for Portugal, applicants can receive a temporary residence permit, which allows them to live legally in the country. The retiree can then 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 willing to make a minimum investment in the country.

Several attractive investment options are 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 Golden Visa investment fund, create required minimum Portuguese employment opportunities, or donate to Portugal’s artistic and cultural projects.

Portugal Golden Visas grant applicants and their family members the right to live in the country and benefit from Portugal’s healthcare system, spectacular weather, and highly-ranked educational system.

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 several factors contributing to a high quality of life. First, the climate, particularly along the southern coast, is ideal for retirees seeking a comfortable and temperate environment.

Portugal is 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 a significant consideration for retirees looking for peace of mind during their retirement years.

Additionally, Portugal boasts a stable political environment, providing US citizens with security and predictability.

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

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

Overall, the combination of a pleasant climate, safety, and an affordable cost of living makes retirement in Portugal an attractive option for those seeking a fulfilling retirement experience.

How To Retire To Portugal From The UK

For UK citizens, the idea of retirement in Portugal is increasingly appealing, particularly after Brexit. With various visa options for retirees, Portugal offers a legal pathway to live in Europe.

The cost of living in Portugal is generally more affordable than in the UK. Housing, groceries, and daily expenses are budget-friendly, allowing retirees to enjoy a comfortable lifestyle without sacrificing quality. This affordability is especially attractive for UK citizens planning their retirement finances.

Furthermore, Portugal’s Mediterranean climate, featuring mild winters and warm summers, provides a pleasant alternative to the often unpredictable weather in the UK. The abundant sunshine and generally mild temperatures along the southern coast, particularly in the Algarve, draw UK citizens seeking a sunnier and more temperate environment for their golden years.

In summary, the favorable visa options, a lower cost of living, and an inviting Mediterranean climate make retirement in Portugal a compelling choice for UK citizens looking for a fulfilling retirement experience.

What You Need To Know Before Retiring in Portugal

Portugal’s living costs for retirees

Portugal is one of the most affordable countries in Europe. The cost of living is significantly lower than in many Western European countries and the US, making it an attractive choice for both expats and retirees.

For a comfortable lifestyle, you can manage with a monthly budget of €1,300-€1,500 in small towns. In larger urban areas like Lisbon or Porto, a budget of around €1,700 is more common. Essentials such as groceries, dining out, rent, utilities, and health care are especially reasonable.

The cost of living in Portugal compared to the US is 39.2% lower, and rent is 54.2% lower than in the US. Similarly, compared to the UK, living expenses in Portugal are about 35% lower, and rent is nearly 40% less.

In summary, Portugal offers a financially viable option for retirees, allowing them to enjoy a high quality of life while stretching their retirement savings.

Health care for retirees

Healthcare in Portugal is primarily provided through the publicly funded National Health Service (the Serviço Nacional de Saúde, or SNS), which offers essential health services to residents. While this system provides affordable care for Portuguese citizens and legal residents, it does not completely cover all medical needs, and some fees may apply for certain treatments or procedures.

Although Portugal’s public health care is generally of high quality, those accustomed to private health care may find differences in service levels. Obtaining private health insurance is necessary for residents to secure a residency visa. Once residency is established, individuals can keep their private coverage for additional benefits.

Health insurance for foreigners is available at a low cost. Monthly premiums typically range from €20 to €50, depending on the coverage needed. You could spend between €400 a year for a basic plan and around €1,000 annually for more comprehensive medical services.

In summary, while the Portuguese healthcare system offers a solid public health system, private health insurance is an important option for those seeking a broader range of services and quicker access to care.

Portugal’s inheritance law and wills

Understanding and learning how to navigate and possibly avoid Portuguese inheritance tax is essential for anyone considering retiring in Portugal. This tax applies to the transfer of property and assets after a person’s death, and the rate can vary depending on the deceased’s country. In Portugal, the tax is determined by the deceased’s home nation. If no will is in place, your estate will be managed according to the inheritance laws of that country.

For tangible assets, such as property, the inheritance tax is calculated based on the value of the assets transferred. In the case of cash inheritances, the tax is a percentage of the total amount received.

For retirees seeking to navigate these laws, it’s advisable to consult legal experts familiar with the regulations imposed by the Portuguese government. This will help ensure your wishes are honored, and your estate is managed according to your preferences.

Buying property in Portugal

Buying property in Portugal is an appealing option for many. The country’s diverse and stable real estate market has attracted foreign investors recently. This interest has increased property prices, but Portugal’s real estate is still more affordable than in many other EU countries.

You can find various properties, including traditional houses, modern apartments, and even old buildings or barns that need renovations. Generally, homes in larger cities like Lisbon and Porto are more expensive than in areas like the Silver Coast or central Portugal. If you’re considering retirement in Lisbon, be prepared for the capital’s higher prices, but exploring neighborhoods outside the city center might help you find better deals.

You’ll need to acquire a tax identification number (NIF Portugal) to purchase property in Portugal. This is necessary for all financial transactions, including buying a home. It’s also a good idea to open a Portuguese bank account, as having a local bank account can help you avoid extra fees.

Ensure you know the associated taxes when buying property, such as IMT tax, IMI, and Stamp Duty Tax. Understanding these costs is important for managing your budget, especially for Portuguese residents planning their retirement years. You can read our article on Property Tax in Portugal for more details.

What is the best place to retire in Portugal?

If you’re considering retiring in Portugal, your ideal destination depends on your preferences and lifestyle. Both Porto and Cosmopolitan Lisbon are excellent choices for those who enjoy a lively atmosphere with plenty of entertainment, restaurants, and top-notch health services. If you prefer a quieter setting, the Portuguese Riviera offers beautiful surroundings while still being close to the action.

Here are five of the best places to retire in Portugal in 2024.

Retire in Lisbon

Lisbon, the capital city, is renowned for its vibrant culture, historic architecture, and diverse activities. With a mild climate, excellent healthcare facilities, and a relatively low cost of living compared to other Western European countries, it’s an appealing choice for many.

This lively city attracts retirees who enjoy an active lifestyle and want to be close to the energy of daily life. Living in Lisbon means endless opportunities for entertainment and exploration.

Retire in Porto

Porto, Portugal’s second-largest city, is considered one of the best cities for expats. Famous for its picturesque riverside and historic wine cellars, it offers a charming atmosphere. Retirees here can enjoy a slower pace of life while still having access to cultural experiences and lower living costs than many other European cities.

Situated in the Douro Valley, one of the oldest wine regions in the world, Porto allows retirees to spend weekends wine-tasting in local vineyards or taking scenic cruises along the river.

Retire in Cascais

Nestled on the Portuguese Riviera, Cascais is a coastal town celebrated for its stunning beaches, well-kept parks, and upscale lifestyle. This relaxed environment offers outdoor activities and easy access to Lisbon, making it perfect for those who want tranquility and city life.

Cascais is known for its luxurious properties, catering to expats seeking comfort and elegance. For more details, check out our article on buying property in Cascais.

Retire in Faro

As the capital of the Algarve region, Faro offers a peaceful and laid-back lifestyle. The Algarve is famous for its beautiful beaches, golf courses, and warm climate. Faro features a historic Old Town, providing cultural experiences, while the region as a whole is perfect for outdoor activities.

The Algarve is regarded as one of the best places to retire in Portugal, thanks to its stunning beaches and endless sunshine. Retirees with a large English-speaking community find plenty of support for navigating the Portuguese retirement process.

Retire in The Silver Coast

For those seeking a less developed and more authentic experience, the Silver Coast in the central region of Portugal is ideal. Here, you’ll discover tranquil areas surrounded by nature.

Retirees on the Silver Coast can choose from historic towns with cobblestone streets to beachfront communities that promote a laid-back lifestyle. This region’s mix of culture, natural beauty, and affordability make it an attractive option for retiring in Portugal.

If you’re considering retiring in Portugal from the USA, you’ll join many fellow American expats who have embraced the beauty of this country. Many US expats live in Lisbon, Porto, and the Algarve, enjoying sun-soaked beaches, vibrant cities, and breathtaking landscapes. Additionally, Portugal has a UNESCO World Heritage Site prevalence, with another 19 on the tentative list, making it a rich place to explore.

Retiring in Portugal: What to Expect

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

Big expat community

When you choose to retire in Portugal, you’ll find vibrant expat communities welcoming you. These diverse communities continue to grow, especially in the Algarve, the most popular destination for retirees. Many British and American retirees have already settled in this sunny region, and with a large English-speaking population, you’ll feel at home in no time.

You can also join various expat groups to meet like-minded individuals. Platforms like InterNations and Meetup are excellent ways to make friends and connect with others who share your interests.

Cultural richness

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

Favorable climate

Portugal boasts a Mediterranean climate with mild, rainy winters and hot, dry summers. The southern regions, particularly the Algarve, enjoy plenty of sunshine, making it an ideal spot for those seeking a comfortable and temperate retirement.

Diverse landscapes

From the golden beaches of the Algarve to the lush vineyards of the Douro Valley, Portugal offers a range of stunning landscapes. Whether you prefer coastal living, countryside tranquility, or the excitement of urban centers, you’ll find a setting that suits your lifestyle.

Outdoor activities

Portugal’s diverse geography provides numerous opportunities for outdoor activities. Whether you enjoy golfing, hiking, or simply strolling along the beach, there are plenty of ways to stay active and appreciate the country’s natural beauty.

Portuguese cuisine and culinary experiences

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

Travel opportunities

Portugal’s strategic location in Europe allows for easy exploration of other countries. With a well-connected transportation network, retirees can travel conveniently within Portugal and beyond, making discovering new destinations and experiences simple.

Taxes For Retirees in Portugal

While you cannot retire tax-free in Portugal, the Non-Habitual Residence (NHR) program offers excellent tax benefits for foreigners. When structured correctly, this program can significantly reduce your tax burdens, allowing you to pay less on your retirement pension.

As a tax resident in Portugal, you must declare your worldwide income yearly and pay income tax on it. Fortunately, the NHR program may allow you to benefit from a lower tax rate on your retirement pension and potentially pay no tax on certain other incomes from outside Portugal.

American citizens should be aware that they may face double taxation due to the tax regulations in the USA. However, some countries have tax treaties that can help alleviate this burden. For effective financial planning and to manage your tax affairs, including any potential exceptions you might qualify for, it’s advisable to consult with tax specialists.

Important Note: The NHR Regime will no longer be available for new applicants in 2024. However, some individuals can apply until March 31, 2025, though eligibility requirements will be stricter after that date. This scheme will be replaced by a new tax regime, Tax Incentive for Scientific Research and Innovation (NHR 2.0).

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 help make your retirement a success:

Plan your budget

Start planning your budget to maximize your retirement savings. Consider costs such as rent deposits, moving expenses, legal fees for visa applications, and setting up your new home. You may need to purchase furniture and appliances, so explore new and second-hand options to manage costs effectively.

Don’t forget to include expenses for essential services like phone, internet, cable, and utilities. Comparing service providers can help you 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 assist with paperwork, ensure you comply with regulations, and provide valuable advice on the legal aspects of your move.

Private health insurance

While Portugal has a public healthcare system, having private health insurance can offer additional coverage and faster access to medical services. Take the time to evaluate different plans to find one that fits your needs and budget.

Learn the local language

Although many Portuguese residents speak English, especially in urban areas, learning the local language can enhance your daily interactions and help you integrate into the community. This effort will make your retirement experience more immersive and enjoyable.

Understand tax implications

It’s essential to familiarize yourself with the tax implications of retiring in Portugal, both from your home country and in Portugal itself. Consulting with tax professionals can help you optimize your financial situation and ensure compliance with all regulations.

Embrace the local lifestyle

Finally, immerse yourself in the local lifestyle by participating in cultural events and exploring Portugal’s rich traditions. Engaging with your new community will enhance your retirement experience and foster a sense of belonging.

Frequently Asked Questions about Retiring in Portugal

How can I retire to Portugal from the USA?

Apply for residency to retire in Portugal as an American via the D7 Passive Income/Retirement Visa or the Portugal Golden Visa. The process is straightforward but time-consuming.

Essential documents include your passport, proof of income, healthcare services coverage, and a clean criminal background check from your home country.

What is the retirement age in Portugal?

The retirement age in Portugal is 66 years and 7 months for both women and men. However, Portugal’s retirement age is indexed to average life expectancy.

The COVID-19 pandemic has impacted life expectancy, which means the retirement age is set to drop by three months to 66 years and 4 months in 2023.

Can you retire in Portugal from Canada?

Yes, Canadians can retire in Portugal by securing a residence permit through the D7 Visa or Golden Visa program. If you’re interested in the Portugal Golden Visa, you can consult our article: Portugal Golden Visa for Canadians. As an EU citizen, it’s easier to navigate the process compared to non-EU citizens.

Can you retire in Portugal from the UK?

Yes, you can retire in Portugal from the UK, but it’s more challenging post-Brexit. You must secure a residency visa in Portugal via the D7 Visa or Golden Visa. For more details, check out our article: Portugal Golden Visa for UK citizens.

Can you retire in Portugal from Australia?

Yes, Australians can retire in Portugal by securing residency, which is straightforward with the Portugal Golden Visa or D7 Visa. For more information, see our article: Portugal Golden Visa for Australians. Non-EU citizens like Australians will need to ensure they meet the specific residency requirements.

How to retire to Portugal as a foreigner?

Foreigners can retire to Portugal by applying for the D7 Visa or the Portugal Golden Visa. The process involves gathering required documents, securing a residency visa, and ensuring you have healthcare services coverage.

How much do I need to retire in Portugal in 2024?

Portugal is one of the most affordable European countries for retirement. Depending on the location, you can retire with a monthly budget of €1,400 to €2,400 per month. Housing costs can vary, but they are generally lower than in many other Western European countries. EU citizens might find the process of moving easier compared to those from outside the EU.

What is the cost of living in Portugal for retirees??

The cost of living in Portugal is reasonable compared to other European countries or your home country. You can live comfortably on €1,300-€1,700 per month, depending on the location and whether you need to pay for private healthcare services. This makes it a low cost option for many retirees.

Where is the best place to retire in Portugal?

Portugal offers various options, from major cities like Lisbon or Porto to beachside villas in the Algarve. Your choice depends on your interests, with prices generally lower outside city centers. EU citizens might find it easier to settle into these communities due to existing agreements.

What are the pros and cons of retiring to Portugal?

Pros include warm weather, affordable living, free healthcare services, and a high quality of life. Cons include slow bureaucracy, cold winters in some homes due to the lack of central heating, and the need for Portuguese language skills in remote areas. 

Besides Portugal, where else can you retire abroad?

Retirees have many options globally. A recent study by International Living lists the top ten countries for retirement, depending on your preferences and how close you wish to remain to your home country.

Do I need to speak Portuguese when retiring in Portugal?

While it’s not mandatory to speak Portuguese, learning the language will enhance your daily interactions, especially in smaller towns. English is widely spoken in major cities, but knowing Portuguese can help you integrate better in this European destination.

How is the healthcare system in Portugal?

Portugal’s healthcare system is of high quality and accessible to residents, including EU citizens. The National Health Service provides essential care for basic health needs, and costs are generally lower compared to other EU countries.

Both public and private healthcare options are available, giving you flexibility. Having health insurance can help cover additional services and manage your expenses more effectively.

Are there family reunification benefits to retiring in Portugal?

Yes, retiring in Portugal allows for family reunification benefits. As an EU citizen or resident, you can bring close family members to live with you in Portugal. This process is relatively straightforward, making Portugal a welcoming European destination for families.

What are the social security benefits when retiring in Portugal?

Retirees in Portugal can access social security benefits, which include a contribution-based state pension. To maximize benefits, it’s important to consult a financial advisor and ensure you meet all requirements.

If you reside in Portugal, you may need to pay taxes on your pension income. As a resident in the Schengen area, you also enjoy visa-free travel across EU countries.

Why is retiring in Portugal such a popular option for foreigners?

Portugal. It’s no secret that retiring in Portugal offers a low cost of living, affordable real estate, a good healthcare system, warm climate and friendly locals. No surprise then that it’s highly popular among retirees, and relatively affordable at the moment – and that some experts are expecting prices to rise.

What's the difference between holding permanent residency and Portuguese citizenship?

Portuguese citizenship grants full rights as an EU citizen, including voting and a passport. Permanent residency allows you to live in Portugal indefinitely but lacks political rights and EU citizen benefits.

What are the most important considerations for foreigners retiring in Portugal?

Foreign retirees should obtain a residence permit, often through the D7 visa, and understand the visa process. Consider healthcare costs and secure health insurance, as public healthcare may not cover everything.

Be aware that Portugal taxes worldwide income, so consulting a tax advisor is important. Finally, evaluate housing costs, whether renting or purchasing, in your chosen area.

What are Portugal's considerations for double taxation?

Portugal has many expats who may be concerned about double taxation. To avoid this, it’s important to obtain a tax identification number (NIF) and understand the double tax treaties Portugal has with other countries.

These treaties help prevent double taxation on the same income in both Portugal and your home country.

Are there any downsides to retireing in Portugal?

Living in Portugal offers many advantages, but there are also a few downsides to consider. Some of the drawbacks include bureaucratic processes, low-quality housing, a lack of customer service culture, challenges in integrating into Portuguese culture, low wages, and the rising cost of property.