Thinking of living in Portugal in your retirement? You won’t be alone. Over 14,000 U.S. citizens reportedly reside in Portugal, with the number of Americans rising in this popular Western European country by 239% from 2017 to 2022 alone. Retirees are especially drawn to Portugal due to some of the attributes older Americans want most — a warm and arid climate, a low crime rate, more bang for one’s retirement buck, beautiful beach vistas along the Atlantic Ocean, and a great (and affordable) cost of living.
Yes, downside risks of retiring in Portugal do exist, chief among them a formidable language barrier for Americans who don’t speak Portuguese and the fact that Lisbon, Portugal, is 3,367 miles from New York City and 5,664 miles from Los Angeles.
Yet those barriers haven’t deterred the burgeoning number of U.S. retirees who call Portugal home.
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What living in Portugal is like
Take Alison Rudolph, a retired senior environmental health and safety specialist at a global pharmaceutical company. A former Pennsylvania resident, Rudolph now lives in São Martinho do Porto with her husband Scott, who runs a successful accounting practice.
“In Portugal, all regions are well-suited for retirees, but it all depends on your tastes, likes, and dislikes. We chose the Silver Coast for the weather and the low cost of living, Rudolph says. “Many ex-pats prefer the warmth of the southern Algarve area. Others like city life. It’s all available here, and you just need to decide what you want and how much you are willing to spend.”
Like any move to a foreign locale, there was a period of adjustment and adaptation. Yet Rudolph says that’s to be expected for an American retiree settling in Portugal.
“Things are different here,” Rudolph says. “The language is different. For example, I couldn’t find normal products that I’d pick up anywhere in the U.S. in the stores here. When I found them, I couldn’t read the labels or instructions.”
Over time, Rudolph found herself warming to Portugal’s famous laid-back lifestyle.
“I grew accustomed to the culture and the lifestyle here,” she says. “I picked up the language enough to get by. I’ve come to embrace the country and the differences it presents, even missing many things Portuguese when I return to North America. Rather than returning to the States to get things I can’t find here, I have learned what I can get here and how to use it.”
Rudolph says that while the Portuguese bureaucracy is challenging, she and her husband are in full adjustment mode. “We’ve become accustomed to the slower pace and the antiquated ways they manage things here. … The main thing I’d do differently would be not to purchase real estate ‘sight unseen.’ Instead, I’d have rented a property until finding the best living location.”
If calling the historic and hospitable Iberian Peninsula home in retirement is growing on you, make sure to account for these five factors before committing to Portugal.
(Image credit: Getty Images)
1. Home purchase costs are rising
While housing costs in country hot spots like Lisbon and Porto are still relatively low compared to US urban bourses like New York and LA, prices are rising on the peninsula.
“With dramatic property price increase in Portugal in recent years and a hike in rental prices, I don’t think prices will go down soon,” says Jeremy Savory, founder at Millionaire Migrant, a company that helps entrepreneurs and investors establish residencies internationally. “With demand outpacing supply in recent years, substantially bolstering the supply of rental properties seems to be the key to leveling out rental prices in Portugal but boosting home purchase costs.”
That’s largely because the Portuguese economy is robust, housing supply is limited, and interest rates are stabilizing and are expected to decrease in 2025.
“Additionally, the job market is strong with full employment opportunities, and amongst other factors, these factors make a sharp price correction less likely,” Savory says. “Experts in the field anticipate that there won’t be a sharp correction in prices in 2025, but they will remain stable, particularly as demand continues to be strong for properties and rental properties in Portugal.”
2. Find cost of living relief outside of Lisbon or Porto
Due to increased housing costs and rents, the cost of living is much higher in large cities such as Lisbon, Porto, or the Algarve region than in more rural areas.
“We live on the Silver Coast, about one hour from Lisbon,” Rudolph says. Houses in the area can cost around 300,000 euros for a good-sized lot and still be within minutes of the beach of São Martinho do Porto.
While rental and home purchase prices are on the rise in the two largest Portuguese cities, you can still live comfortably in other beautiful locales close by and at a lower lifestyle price.
“You’ve got Alentejo, which is an hour to two hours’ drive from Lisbon, with a warmer climate and a great wine locale,” Savory says. “North of Lisbon, you have Coimbra and a beautiful city called Aveiro, which people don’t really talk about, but is a great place to live that retirees should investigate.”
Watch out for weather issues, however. “The further north you go, toward Porto, it gets rainier and a bit greener and cooler,” Savory notes. “We’re seeing many people from the UK who prefer a more rural, farm-like life wind up living there. If you’ve got a lot of money and you want to be really bougie, that’s an area you’ll appreciate. It’s expensive, with many well-off expats living there.”
Down the price scale, American retirees can live an “incredible” island lifestyle in areas like Azores and Madeira that are well-connected to the US with direct flights and close to Lisbon, Savory adds.
3. Have a lifestyle budget, too
Non-housing costs will vary, but mostly, the Portuguese experience will be less costly than retiring in the U.S.
“Automobiles and gasoline can be expensive, but insurance is much cheaper,” Rudolph says. “Gasoline costs about 1.66 euros (U.S. $1.73) a liter, but healthcare is very inexpensive. Additionally, a doctor’s visit will cost you about 17.00 euros. Food is less expensive, and here, wine is cheaper than Coca-Cola.”
4. Get to know the D-7 Visa
Portugal offers non-citizens the opportunity to retire in-country through the D-7 visa program. If you meet specific conditions laid out by the government, you can attain citizenship after five years of living in Portugal.
“The D7 is typically the most popular visa for retirees due to its low financial requirement of a passive income of 8,460 euros per year,” says Alex Ingrim, co-founder and financial planner at Liberty Atlantic Advisors, which specializes in helping Americans live in Europe. “For many American retirees, their Social Security or dividends from an investment account would cover this value.”
Portugal’s non-habitual residency (NHR) status, which enabled foreigners to live in Portugal for 10 uninterrupted years, was revoked at the end of 2023, while some new residents were grandfathered into the regime if they moved in 2024. That means most new or prospective residents would not be eligible for NHR going forward.
“There is a new version of NHR that targets people that are actively working in very specific fields or roles designed to enhance Portugal’s strategic development goals,” Ingrim says. “The new NHR regime does accommodate retirees and offers a special tax rate for pension income like the original version.”
Now, most retirees are going the D-7 route. Typically, they work with financial advisors like Ingrim, applying directly through the Portuguese Consulate or US embassy or leveraging local in-country concierges. After you apply (expect to wait 60 days or so for a response), you’ll receive a passport stamp that enables you to travel to Portugal within 120 days. Once in the country, you can apply for a temporary residence permit at any Portuguese immigration office.
To fully earn a D-7 visa, you’ll need a driver’s license, a marriage/divorce certificate, and a clean criminal record report.
Ex-pats like Rudolph, prior to applying for a visa, need to transfer 10,440 euros into a Portugal bank account and deposit 50% of that amount (5,220 euros) for a partner. Rudolph says, “You must produce proof of income and assets and have either an owned property or a one-year lease.”
(Image credit: Getty Images)
5. Cultural integration is a big factor
The biggest cultural adjustment for retirees moving to Portugal is the language. Rudolph recommends taking Portuguese language lessons well before the move and keeping them up when you arrive. “Additionally, there are many good books that detail the country’s history and culture, so read as many as you can.”
As Rudolph suggests, there are abundant country- and locale-specific Facebook groups to connect with other expats. “Each decent-sized town will have an ex-pat meetup, usually weekly,” she says. “There are many activities that one can get involved in to meet people. I joined a hiking group, and that is where I met my closest friends.”
It’s also highly recommended to give in to a slow pace of life. “It does have a very much a service orientation, just a different style, but the people are very hospitable,” Savory says. “Many people speak English, yet the more low-density an area you go, the more remote, the more challenging it gets.”
Above all, a commitment to integrating into Portuguese culture is important. “U.S. retirees can jump right in by social media forums, joining local sports, hobby and business clubs. If you make the effort, you’ll assimilate more quickly,” Savor adds.
Once immersed in the Portuguese experience, you’re on your way to retirement in one of the most beautiful countries in the world.
“Overall, the Portuguese are warm and welcoming people,” Rudolph says. “We miss our friends and family back in the U.S., but we love it here now.”
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Publish date : 2025-01-21 12:36:00
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The post Where to Retire: Living in Portugal as a U.S. Retiree first appeared on Love Europe.
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Author : love-europe
Publish date : 2025-01-22 09:52:05
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