How to Retire in Portugal

Tue 14 Jan 2020

Portugal provides beaches, golf courses and a European lifestyle to retirees on a budget.

Portugal has a low cost of living, easy residency options and tax incentives for new residents. This country also has great food, some of the best beaches and golf in Europe, excellent infrastructure and a large English-speaking population. Portugal is a great base from which to explore the rest of Europe.

The Cost of Living in Portugal

Portugal's cost of living has been rising steadily for the past five years. However, the country remains a relative bargain compared to other places in Western Europe. A couple could live comfortably on 1,915 euros per month, including 1,000 to 1,250 euros per month for rent.

The U.S. dollar remains at historic highs versus the euro. However, if you're retiring with a dollar-based nest egg or dollar-based income from Social Security or a pension, you should set aside at least four months of living expenses as a safety net in case the dollar-euro exchange rate moves significantly against you.

The Cost of Real Estate in Portugal

In some Lisbon neighborhoods and other sought-after locations in the country, particularly in the most tourist destinations along the Algarve coast, real estate prices have risen steadily over the past five years. Still, it is possible to buy a home for 200,000 euros or less. Investing in a home of your own is a smart strategy in a country like Portugal where the currency is different from that of your home country. By buying a home, you remove housing costs from your monthly retirement budget and therefore eliminate any long-term currency risk concerns on that portion of your expenses.

Banking in Portugal

While living in Portugal, you should open a local bank account. You can use your Portugal account to pay local bills and expenses, while also keeping your account back home. This will save the cost of bank transfer fees and concern over day-to-day exchange rates. Note that banks in Portugal open at 9 or 9:30 a.m. in the morning and close at 3 p.m.

Becoming a Resident of Portugal

Portugal's Golden Visa program is one of the best residency programs in Europe. It offers multiple options for obtaining an investor's visa in Portugal, including through an investment in real estate of 280,000 or more euros. As a legal resident, you have access to local public schools and health care.

Under Portugal's Golden Visa program, you become eligible for Portuguese citizenship after five years of residency, and you can include family members as part of your citizenship application. When you qualify for citizenship in Portugal, you also gain the right to stay in the other European countries in the Schengen Area.

If you're not interested in buying property or investing the required minimum to qualify for the Golden Visa, you can also qualify for residency in Portugal by showing that you have enough income to support yourself. The amount of income required isn't stipulated formally in the law. Your immigration officer has the discretion to decide if your income is sufficient or not. However, an income of 1,200 euros per month or more will generally suffice.

Internet Access in Portugal

You'll be able to access high-speed internet in most of the country, and 4G service is increasingly available. Still, if good internet is important to you, do some research about the service available in different areas of the country before committing to a region. You'll find great internet service in much of Portugal, but not in the most remote spots.

Food Quality in Portugal

The emphasis on cooking and dining out in Portugal is on fresh seafood. Cod is featured on almost every menu, as are tuna and shrimp. Fast food is not common in Portugal, so don't be in a hurry to eat and run and expect a slow and relaxed table service.

The produce in Portugal is fresh and organic, without the premium you pay for organic food in other countries. All produce is labeled to tell you where it's from, and it's usually local. Portugal's local cuisine may even help with weight loss and promote good health. The Mediterranean diet is often regarded as the healthiest in the world.

Owning and Driving a Car in Portugal

Outside Lisbon, Cascais or other large cities, you'll need to invest in a car. Portuguese law requires drivers to carry with them at all times a valid license, vehicle registration, current vehicle inspection certificate, headlight converters, reflective jackets for every person in the car (within reach of the driver), spare glasses or contacts if you have a vision prescription, spare bulbs, and a first aid kit. The police can and do stop and ask to see these items. If you're stopped and are missing anything, even your spare pair of contacts, you'll be liable for a fine payable on the spot. Don't worry if you don't have cash on you to cover the fine. The police have electronic cash machines in their cars.

Health Care in Portugal

Portugal has a high standard of health care. Hospitals are modern and well-equipped, and many doctors in both public and private facilities speak English. Public health care in Portugal is available to legal foreign residents who are registered with their local medical center, and the national health care system covers basic health needs, accidents, and illnesses.

Health insurance costs in Portugal are much lower than in the United States. Many expats invest in a private insurance plan that allows them to visit private facilities if they choose. Your annual health care policy might cost as much as one month's premium in the U.S.

The Lifestyle in Portugal

Life in Portugal moves at its own pace. Be prepared to run into administration and bureaucracy when setting up your new life overseas. Don't fight it. Embrace the slower gait. If you get one task accomplished in a day, consider that a win.

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Photo by Dahee Son on Unsplash

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