Retire To Portugal: The Real Costs Of Living

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Portugal offers newcomers low living costs, simple residency visas, a great lifestyle and tax benefits. This country also features excellent infrastructure, delicious food, some of Europe’s best coastlines, golf courses and a substantial English-speaking community. Portugal is an ideal starting point for exploring the European continent.

There are a few things you might want to know before moving there:

  • Is Portugal an excellent place to retire?
  • Is there free healthcare in Portugal?
  • How much money do I need to retire in Portugal?
  • Is US Social Security taxed in Portugal?
  • Can foreigners own property in Portugal?
  • How much does groceries cost in Portugal?

Now let’s answer these questions to determine whether Portugal is the correct country for you

Is Portugal an excellent place to retire?

Portugal is somewhere you have to seriously consider if you are wanting to move to Europe. It is among the least expensive countries in Europe with a high percentage of English speakers in the larger towns as well as a large expat community. The Algarve has sunny coastlines, Porto has vineyards and Lisbon is a beautiful modern city. Furthermore, in past years, the Portuguese administration has reduced residence restrictions and taxation to attract more visitors and expats.

Retiring in Portugal has several benefits including great weather, access to the North Atlantic Ocean, mountains to trek, very safety, great health care and cheap housing. Portugal is ideal for people who enjoy a slower pace of life. The Portuguese are patient and coutious and believe in enjoying life with friends and family. 

There is heaps to do for everyone in Portugal and you will always have something to do with your time. From water sports in the lakes or ocean, hiking in the Serra da Estrela mountain region, seeing palaces and fortifications. Sailing, fishing and snorkeling are popular pastimes among the locals and expats alike.

In 2020 Portugal received 26 World Travel Awards. The prizes were presented for the region’s sights, coastlines and hotels. The Algarve which is popular among the Portuguese  and travelers as a great place to unwind on the beach. Portugal has been awarded Europe’s top holiday destination.

Is there free healthcare in Portugal?

No, it is not free for tourists or temporary visa holders but it is cheap for permanent residents, citizens and EU healthcare card holders with a small copayment. Dentists are not covered by the public health system and hospitals will be free or provide a discount for permanent residence or citizens. About 20% of people have private health insurance to cover the extras like glasses, dental, doctor copayments and hospital stays.

If you are not a permanent resident or citizen then you will have to obtain private medical coverage for the duration of their trip. However short-term visitors from the European Union (EU), European Economic Area (EEA) and Switzerland can use their European Health Insurance Cards to receive public healthcare in Portugal (EHIC).

Public taxes and copayments finance coverage in Portugal from employed citizens to the Portuguese social welfare system. However those who are unemployed, have dependent relatives or are pensioners are exempt from making contributions. Medications are subsidized for permanent residents and citizens. When you first visit you will have to have private health insurance to cover you until you become eligible for the public health system.

In Portugal private insurance will start at $140 a month with a $1,000 deductible for major surgeries.

You can check to the following websites for International health insurance pricing:

How much money do I need to retire in Portugal?

Portugal is 58 percent less expensive than the United States. It can cost even less if you choose to live in smaller towns or a little further from the beach. Leases in Portugal are 51% less than in the United States. To cover your monthly expenses in Portugal, you’ll need at least $1049 USD. This is an estimate of how much you can spend each month based on your lifestyle.

Here’s a step by step breakdown of the retirement costs for Portugal:

Rent for a 3 Bedroom House$839 USD / €738
Rent for a 1 Bedroom Flat$522 USD / €460
Utilities (Electricity, Gas, Rates)$115 USD / €101 
Internet$38 USD / €33
Maid Service (Hourly) x 4 a month$28 USD / €6
Groceries$200 USD / €176
Dining Out (2 people) For 4 times$72 USD / €63
Fitness or Social Club Membership x 2$74 USD / €33
TOTAL MONTHLY EXPENSES (3 bed)$1366 USD/ €1202

NOTE: These rental costs are based on apartments outside the city center of Lisbon. The prices might be higher if you prefer to live in the city’s heart or near the coast.

Is US Social Security taxed in Portugal?

No, It’s not. On August 1, 1989 a deal between the United States and Portugal increased social security protection for those who work or have worked in both countries. In addition it also benefits many people who would otherwise be ineligible for monthly retirement, disability or survivors payments under one or both nations’ social security systems if the agreement were not in place.

It also aids individuals who would otherwise be required to pay social security taxes to both nations on the same earnings. The agreement contains Social Security taxes (including the U.S. Medicare part) and Social Security retirement, disability, and survivors benefits in the United States. However, it does not cover benefits under the Medicare or Supplemental Security Income programs in the United States.

Link: US Portugal Agreement

Can foreigners own property in Portugal?

Yes, there are no limits as to who can buy residential property in Portugal and there are no location restrictions either. You can own the land and the house on top of it.  Under the Golden Visa program the current Portuguese administration encourages expatriates to invest in property in Portugal. 

You may be eligible for a Golden Visa residency visa in Portugal if you are a non-EU citizen who invests in property worth a specified amount. This visa permits you to reside, work, and study in Portugal while allowing you to travel throughout the Schengen area freely. After five years you can also apply for citizenship in Portugal. 

For your first property in Portugal it is always wise to use a real estate agent who will bring you up to date on the laws and taxes as well as the process you will need to follow.. These are known as Inmobiliaria in Portugal. Make sure it’s a property licensed agency with a Portuguese Association of Real Estate Agents license number (Associacao de Mediadores Imobiliarios). You can search for them on that website for proof they are licensed. You should also get a property lawyer to help with making sure the paperwork is in order.

The cost of a home in Portugal varies based on the style of the house, its location, and other factors. However an apartment in Lisbon’s city center costs roughly $2,900 per square meter, while those outside the city cost around $1,845. This decreases greatly in smaller cities or other regions outside the capital. 

These Are A Few Recommended Websites of Real Estates You Can Look Into:

How much do groceries cost in Portugal?

Dining out in Portugal is somewhat cheaper than in other nearby countries. An inexpensive restaurant will charge you $8 – $17 USD for a meal while fast food is even more affordable. A typical Mcdonald’s meal will set you back about $4 – $6 USD. And for a three-course meal it will set you back around $34 – $68 USD.

A beer in a restaurant in Portugal can cost as little as $1 which goes up to $4 for specialty imported beers. On the other hand if you’d instead buy your booze at a supermarket you can expect to spend as little as $0.74 for half a liter of domestic beer or up to $3.4 for the imported beers. A mid-range wine will set you back $2.83 – $8.50 for a bottle.

In Portugal supermarket chains are relatively inexpensive. Continente, Auchan and Pingo Doce are just a few you can choose from. If you’re on a budget Portugal also boasts bargain grocery stores like Lidl, Minipreço and Aldi

Here is the overview of the average monthly groceries:

Milk1 Liter / 1 quart$0.8 USD
Bread1 Loaf$2.2 USD
Eggs1 Dozen$2 USD
Beef1 kg/ 2.2 pounds$8.4 USD
Chicken Breasts1 kg/ 2.2 pounds$5.1 USD
Beer12 cans$4.5 USD
Wine1 Liter / 1 quart$1.6 USD

NOTE: Some of these websites are in portuguese. Enable your auto-translation feature to get the result in English in your browser

TIP: If you are planning to stay in Portugal for the long run, it is better to apply for a membership program to get more discounts while shopping in the big supermarkets.

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