Retire in Portugal 2023: A Guide to Retirement (2024)

FAQs

How much annual income do I need to retire in Portugal? ›

The Portugal retirement visa income requirement is €760 (~$840) per month in passive income for individuals, or 12 months' worth of savings (€9,120, or ~$10,080 ). Applicants must also show proof of accommodation in Portugal and stay in the country for over 183 consecutive days per calendar year.

You need to apply for residency in order to retire in Portugal as an American. The process is straightforward, but it may take a while. You need to provide (1) your passport, (2) proof of income, (3) proof of health insurance, (4) criminal background check, in order to apply.

How much money do you need to retire in Portugal? Depending on location and lifestyle, the cost of living in Lisbon can range from $2,000–$3,500 per month. Outside of the bigger cities, you can expect to spend less.

Many retirement experts project that you need somewhere between 80-90 percent of your pre-retirement income to sustain your retirement lifestyle. For many, this can equate to roughly $1 million, which seems like a tricky number to achieve.

If you registered as a non-habitual resident before 31 March 2020, your foreign source pension income is generally tax-free. If you are registered from April 2020 onwards, your foreign pension income is generally taxed at 10%.

If you have social security credits in both the United States and Portugal, you may be eligible for benefits from one or both countries. If you meet all the basic requirements under one country's system, you will get a regular benefit from that country.

If you've lived in Portugal for 183 days or less, you're likely considered a non-resident and will only owe taxes on Portugal-sourced income. Non-residents are taxed with a flat rate rather than a sliding scale.

In order retire in Portugal as an American, you need to apply for Portuguese residency. The process is simple, but may take some time. To apply you need to provide your passport, proof of income, proof of health insurance, and pass a criminal background check.

The main places American expats live in Portugal are Lisbon, Cascais, Porto, Algarve, and Coimbra. Lisbon: Lisbon is Portugal's capital city and offers a vibrant cultural scene, a bustling nightlife, and easy access to the rest of Europe.

Private insurance in Portugal is generally quite cheap. This could cost between 20 and 50 EUR (22–55 USD) a month, depending on your age and the extent of your coverage. This means you can pay anywhere between 400 EUR (440 USD) a year for a basic plan and 1,000 EUR (1,100 USD) yearly for a more well-rounded coverage.

Do I need to speak Portuguese to retire to Portugal? ›

Although recommended, you are not required to learn Portuguese to live in Portugal. Especially among immigrant communities, it is common for foreigners not to speak the local language and yet continue living their lives.

According to data from the BLS, average incomes in 2021 after taxes were as follows for older households: 65-74 years: $59,872 per year or $4,989 per month. 75 and older: $43,217 per year or $3,601 per month.

If you will reach full retirement age in 2023, the limit on your earnings for the months before full retirement age is $56,520. Starting with the month you reach full retirement age, there is no limit on how much you can earn and still receive your benefits.

One FERS date, June 30, is not only at the end of the month, but also the end of a leave period. This is a particularly good date, because it allows for one last accumulation of annual leave to create a larger lump sum payout.

Because of this, expats need to understand how their financial status is affected by moving overseas and how they should file taxes in Portugal. You are not required to pay U.S. income taxes on your Portuguese-source income. This is because the United States and Portugal have a bilateral tax treaty.

Capital gains tax for non-Portuguese residents

Put simply, capital gains tax in Portugal is charged on the sale of property or other assets at a rate of 28% for individuals and 25% for companies and non-residents. Residents will need to pay taxes on just 50% of their capital gains.

Does Portugal tax worldwide income? Residents in Portugal are taxed on their worldwide income at progressive rates. Non-residents will only be taxed on incomes earned in Portugal (typically at a flat rate).

To acquire the full amount, you need to maximize your working life and begin collecting your check until age 70. Another way to maximize your check is by asking for a raise every two or three years. Moving companies throughout your career is another way to prove your worth, and generate more money.

If you leave the U.S., we will stop your benefits the month after the sixth calendar month in a row that you are outside the country. You can make visits to the United States for specific periods of time, depending on how long you've been outside, to continue receiving your benefits.

You must have worked and paid Social Security taxes in five of the last 10 years. • If you also get a pension from a job where you didn't pay Social Security taxes (e.g., a civil service or teacher's pension), your Social Security benefit might be reduced.

Which part of Portugal is best to retire? ›

The Algarve is the most popular choice for expats and tourists alike. It too, has some stunning beaches and coastlines, with some beautiful rock formations to marvel at. The weather is always a few degrees warmer than Lisbon which makes it a popular place for retirees.

Mainly yes, Portugal has a free healthcare system. It's free for all Portuguese citizens and residents. Citizens and residents of the country who contribute to the Social Security Fund can receive free medical care through the National Health Service, SNS.

Given the climate, outdoors lifestyle and relatively low cost of living, it's little surprise that Portugal has been named the world's best retirement destination in 2023 by International Living' Magazine's Annual Global Retirement Index.

Residents in Portugal for tax purposes are taxed on their worldwide income at progressive rates varying from 14.5% to 48% for 2023.

The tax rate is determined annually and varies between 0.3% and 0.8%. This tax is due by anyone who owns the property on the last day of December of the previous year. For example, if you own a property on 31 December 2021, you will have to pay the Portuguese IMI tax in 2022.

As such, Portuguese law does not recognise the status of trusts but this does not stop them from applying tax on any distributions received by a Portuguese resident beneficiary of a trust.

As an American, you need to get a Portuguese residence permit if you're planning to stay there for longer than three months. If you reside in Portugal with a proper residence permit for five years, you can then apply for permanent residency or Portuguese citizenship.

There are a number of different ways for Americans to get a Portuguese visa, through work, marriage, or the Golden Visa investment program. After five years, you can apply for permanent residency and Portuguese citizenship, provided you meet all the requirements under Portuguese nationality law.

Portugal is home to over half a million foreigners from around the world. Retirement in Portugal can be an affordable adventure, safe from gun violence, with low cost, excellent healthcare, year-round mild weather, and plenty of friends just waiting to meet you.

Many people who move to Portugal seek a more affordable and easygoing culture and are attracted by its relatively seamless visa process. Remote workers, digital nomads, and retirees from the US flooded the Western European country during the early stages of the pandemic.

Is it cheaper to live in USA or Portugal? ›

Portugal is actually considered one of the most affordable countries in Western Europe and is an average of 50 percent cheaper than living in the United States.

Please note: Portugal does not offer free medical treatment to visitors, and under European Union rules non-EU citizens are required to have travel medical insurance covering emergency medical, hospitalization, and repatriation (including the case of death).

Yes, Portugal offers state-provided healthcare that is accessible to all citizens and legal residents, completely free of charge. While most medical services are covered, there may be certain fees associated with emergency room visits, consultations with your family doctor, or when utilizing ambulance services.

And if that's not enough, consider this: Portugal's healthcare system is also ranked the 12th best by the World Health Organization compared to the US, which ranks at 37.

The national average price of a 2,000-square-foot home in Portugal is $278,000. Buying a house in Portugal as an American is about 40% cheaper than the U.S. median home price, which is roughly $455,000.

How many expats are living in Portugal? In 2022, Portugal expats numbered around 661,000. That's about 6.5% of the population. Over 7,000 Americans live in Portugal currently, and that number is quickly rising.

Make no mistake, I think 2023 will be a solid year for retirees. Social Security benefits are way up, Medicare premiums are falling, and hopefully, inflation will keep falling. But after a year during which inflation topped out at over 9% and Medicare premiums shot up, there's still a lot to make up for.

What is a good retirement income? A general rule of thumb is to replace 70-80% of your annual pre-retirement income. This means if you currently make $100,000 a year, you should aim for at least $70,000 of annual income in retirement.

According to Statista, the average retirement income for seniors (65+) in Canada is $32,000 per year. Some retirees may have additional sources of income beyond their retirement plan, such as investments, part-time work, or government benefits like the Canada Pension Plan (CPP).

What are the retirement changes for 2023? ›

In 2023, you can contribute an additional $7,500 per year if you are age 50 or older. Under new rules, if you're ages 60, 61, 62 or 63, you can make an additional catch-up contribution of $10,000 or 50% more than your regular catch-up contribution (whichever is greater).

Basically, if you're 65 or older, you have to file a tax return in 2022 if your gross income is $14,700 or higher. If you're married filing jointly and both 65 or older, that amount is $28,700. If you're married filing jointly and only one of you is 65 or older, that amount is $27,300.

The year you reach full retirement age, you'll have an earnings limit of $56,520, and for every $3 over the limit, your benefits will be reduced by $1.

67-70 – During this age range, your Social Security benefit, if you haven't already taken it, will increase by 8% for each year you delay taking it until you turn 70. So, if your benefit will be, say, $2,500/month if you start at your full retirement age, it would be more than $3,300/month if you can wait.

This May, all CalPERS retirees who retired in 2021 or earlier will receive an increase to their cost-of-living adjustment (COLA). This is a result of the annual rate of inflation measured by the Consumer Price Index (CPI-U) that was 8% for 2022.

Is it better to retire at the beginning or end of the month? Retiring on the last day of the month is typically the best option. This enables you to collect all your paychecks during this period. You can also benefit from collecting any holiday pay that might be offered by your employer for that month.

How Much Money Do You Need to Retire in Portugal? Portugal offers arguably the lowest cost of living in Western Europe. a couple can live comfortably in Portugal's interior for about $1,700 a month. The budget for larger cities such as Lisbon is about $2,100 or $2,200 a month.

The average salary in Portugal for the most recent year (2022) is 33,000 EUR per year. That's around 32,117.04 USD per year according to the October 2022 exchange rates.

Can you retire in Portugal from Canada? Yes, you can retire in Portugal from Canada. However, you will need to secure a residence permit through the D7 Visa or Golden Visa program to be able to relocate to Portugal.

The average cost of living in Canada ($1826) is 70% more expensive than in Portugal ($1073). Canada ranked 15th vs 57th for Portugal in the list of the most expensive countries in the world. The average after-tax salary is enough to cover living expenses for 1.7 months in Canada compared to 1 months in Portugal.

What is the monthly income to retire in Portugal? ›

If you're ready to find an advisor who can help you achieve your financial goals, get started now. As mentioned above, you can retire comfortably in Portugal, in a small city, on an income of $1,400 per month — or less. For some people, the value of your Social Security benefit is enough to cover your costs of living.

What is average wage in Portugal? Average Wages in Portugal increased to 1025 EUR/ Month (1117.288 USD/Month) in 2023. The maximum rate of average wage for employees was 1188 EUR/ Month and minimum was 809 EUR/ Month. Data published Yearly by Office For Strategic Planning.

In 2019 the average monthly base salary of a high-level executive was 2,104.3 euros, well over the national average (1,005.1 euros), according to the most recent figures provided by Pordata. A mid-level executive, on the other hand, earns an average base monthly salary of 1,484.6 euros.

Can you live in Portugal for $1000 a month? Yes, if you live frugally, you should be able to live on $1000 a month in Portugal. However, it may not be possible if you live in Lisbon as costs are increasing, and rental costs are now quite high. If you want to live comfortably in the country, we would recommend €1,200.

Places to Live

What is this? The Algarve – Home to some of the best beaches not just in Portugal but in the entire world, and more than 300 days of sunshine per year, the Algarve is a popular destination for Canadian snowbirds who prioritise vitamin D above everything else.

The Silver Coast is without a doubt one of the best places to live in Portugal. Several cities together make this amazing region, Portugal Homes offer you property listing in the main towns of the Silver Coast, such as Nazaré, Peniche, Foz do Arelho, Óbidos, Caldas da Rainha, and Lourinhã.