Retire in Portugal

Are you looking to retire abroad? Then look no further than our charming, culturally-historically-gastronomically rich coastal beauty – Portugal. 

Placing fourth in International Living’s Global Retirement Index for 2022, the country has become quite popular for living and retirement recently – not only because of its culture, history, gastronomy or weather, but also because of the affordable living costs and relatively easy integration process it provides expats from all over the world – especially EU citizens. Another big indicator of the high quality of life in Portugal is the IEP’s (Institute for Economics & Peace) Global Peace Index, in which the country ranked sixth – making it the 6th safest country in the world in 2022.

The process

In recent years, many pensioners from all over the world have moved to Portugal. For EU citizens, the whole process is pretty straightforward – all you need is a residence permit from the SEF (Portuguese Immigration Service) of your area. You can find a list of all SEF offices here

For non-EU citizens it’s a little less easy – you’ll need to apply for a D7 Visa and get approved. The basis of what you need to apply is:

  • Proof of sufficient passive income outside of Portugal (no less than the national minimum wage – 740.83€)
  • A valid passport
  • Registration certificate
  • Proof of health insurance
  • Criminal record
  • Portuguese bank statement
  • Portuguese NIF
  • Birth or marriage certificates
  • Two color photos

The D7 visa can then be renewed after one year for two successive periods of two years and can be converted into a permanent residence permit after five years. You can also apply for citizenship at this time, if you so desire.

Below, divided by topics, you can find everything you need to know about retiring here. For other information you can also visit our article on how to move to Portugal, the D7 Visa or you can contact us directly.

Everything you need

Retire in Portugal for tax reasons

In 2009, Portugal’s retirement laws went through a significant change, in order to make the country more appealing to foreigners. The government implemented the non-habitual tax resident regime (NHR), which allows residents to benefit from a discounted flat income tax rate, instead of the regular rates that climb up to 48%. This includes pensioners. 

The NHR status is available to anyone who was not a tax resident in Portugal in the last five years. All you need to qualify is an international income, which includes pensions, salary, business earnings, investment yields, rental income and capital gains. It is exempt from taxation in Portugal for ten years. You are also exempt from tax on your overall wealth during this period. Any income generated in Portugal will be taxed at a flat rate of 20% instead of the bracketed income tax rates that can go as high as 48%.

All tax residents in Portugal are required to pay taxes on their worldwide income. You are treated as a tax resident in if you reside in the country for more than 183 days in a tax year or if you have a property that confirms your long-term residence in the country. If you register as a resident in Portugal for tax purposes, you can either apply right away or until March 31 of the following year. Accordingly, all residents need to fill out an annual tax return, declaring their income.

Portugal has double tax treaties with all EU countries and most non-EU countries, preventing double taxation. With the acquisition of this special tax status, the Portuguese state levies a lump sum of 10% on your international pension.

Another way to successfully retire here with special benefits is through the Golden Visa program

Can I receive my pension in Portugal?

By European law, all European countries agree on consistent social security regulations. If you have worked in different European countries during your professional career, these pension periods from all countries are added up. You will then receive pensions from the countries in which you worked. Please note, however, that different conditions apply when it comes to receiving your pension from different states.

The insurance institution of the country in which you worked will check whether you meet the requirements. It is, therefore, possible to receive several partial pensions from different countries, even if you want to settle in Portugal. The amount of the pension depends solely on the regulations of the respective country.

Pension payment abroad

As a pensioner, you can easily receive your pension in other EU member states. You no longer have to have an account in your home country, as it can be transferred to your Portuguese account. If you receive partial pensions from other countries, you do not have to keep domestic accounts for all of them. These amounts can also be transferred to a Portuguese account. For the transfer, you will only need an international IBAN and BIC.

How do I set up a Portuguese bank account?

Setting up a Portuguese bank account can make your life much easier when moving here. There are many banks in the country but only one is public – Caixa Geral de Depósitos (CGD). It’s a very solid bank but its fees have gotten higher over the years, driving some people away from it. However, if you plan on relying on a bank for a lot of services, this is a good option. The favoured private banks below all offer a large array of options – your decision should be made based on the priority of your needs.

  • Millennium BCP – the largest private financial group in Portugal and the second biggest in terms of market share
  • Santander –  the better option if you’re looking to get housing credit
  • Montepio – a large social economy group, comprising a bank and a number of companies with services ranging from insurance to management of residential centers
  • BPI – considered one of the most solid, but its range of services falls a little short of what would be desired

If you don’t plan on doing anything much with your account, then a bank without maintenance costs would be your best choice. The most trustworthy option is ActivoBank – a low cost bank under Millennium BCP. Besides not paying fees, you can also set everything up from the comfort of your home.

What you need to set up an account varies from bank to bank but three documents are essential:

  • Valid Identification (ID, Passport)
  • Residence Certificate (something like a rental contract or utility bill)
  • Portuguese Tax Identification Number (NIF)

How does the Portuguese health care system work and can I find English-speaking doctors in Portugal?

When you retire in Portugal, a new life starts and you should not think about the worst to happen. However, healthcare is a very important aspect of where to settle. 

The Portuguese healthcare system is one of the best in the world, ranking 12th worldwide, according to the WHO (World Health Organization). Primary medical care in Portugal is free in all public health facilities, and the additional payments for treatments are quite cheap. A significant disadvantage, however, is the sometimes long waiting times when making appointments. It is generally recommended for immigrants to take out private health insurance. Although this can be a little more expensive, it not only offers you quicker services but also access to private hospitals, where international doctors who may speak other languages work. You will find English-speaking doctors mainly in the regions of the Algarve and in and around Lisbon and Porto. 

English-speaking doctors/facilities 

English speaking hospitals/doctors

Insurances you need in Portugal

As explained in the previous point, it is worth taking out private health insurance in Portugal. The doctors listed above often work in private hospitals, which are not accessible only to the public health system. All private providers have certain insurance offers, which are linked to a monthly price and, joined with this, determine the benefits covered.

Most insurance policies do not cover dentist appointments so it is advisable to choose additional insurance for it. Some popular health insurance companies are Médis, Medicare, Allianz, Advancecare and Mgen Seguros. 

Cost of living in Portugal

In comparison to other European countries, the cost of living in Portugal is around 20% lower. However, it should be noted that the actual costs depend on the respective region and personal living conditions.

Rent

In tourist areas, for example, rental prices are much higher during the summer months, since many people rent houses and apartments for several weeks for the holidays. You can often observe an increase of around 20%, which only regulates itself after the summer months. So if you plan to move to Portugal, it is advisable to look for a suitable apartment in autumn or winter to avoid increased rental prices. On average, for a one or a two-room apartment, depending on the location and equipment, you should expect to pay between €600 and €1200. Rents in the city centers of Porto and Lisbon can be higher, so it is also worth considering looking for apartments on the outskirts.

Transport

These areas often have good train or ferry connections, so it is easy to commute to the center. Both Lisbon and Porto have economical monthly city passes that allow you to use public transport all over their metropolitan areas – usually with a discount for elders. Lisbon’s is called VIVA and Porto’s Andante. You can also look into renting a car or bringing yours to the country – which you can find all information on here.

Utilities

It is important to mention that many houses and apartments in Portugal do not have a central heating system. Therefore, many use electric heating, which is why electricity bills can often be higher in winter. Also, a lot of houses, especially older ones, use gas instead of electricity for things such as the cooking stove and hot water storage tank. In this case you can either get the gas supplied to you by your electricity company, like EDP, or you can buy the gas cylinder yourself. Prices on gas have gone up immensely in 2022, so electricity-only contracts are recommended – also because gas is much more dangerous.

Water bills tend to be cheaper everywhere, usually not surpassing 20€ in a two-bedroom apartment, for example.

Phone card/ cable TV/ Internet usually work as a package and depend entirely on your preference. Popular providers are NOS, MEO and Vodafone – all with different packages and benefits. Your choice will mainly depend on how fast you want your Wi-fi to be; how much monthly data you want on your phone; how many channels on your TV and if it’s for more than one person. You can get more information and compare plans here.

Groceries

There are many supermarkets in Portugal, not generally varying in price much. What’s recommended is for you to get a card/affiliation (like using a mobile app) of your closest grocery stores. Popular supermarkets such as Continente, Pingo Doce and Minipreço work on a client card system; Lidl and Aldi, for example, have mobile apps – both provide you with special discounts and quick information on deals and the weekly “folheto” (a pamphlet with the discounted products of the week/weekend).

Folheto supermercado
Example of a “folheto”
Food

The Portuguese diet is considered fairly healthy. A typical meal consists of

  • soup (usually simple with just vegetables);
  • a main course, which is usually made up of meat or fish and a carbohydrate like rice, pasta or potatoes, accompanied by a simple salad (lettuce, onion and tomato, generally);
  • dessert – usually a piece of fruit, a pastry like a pastel de nata or a typical heavier sweet (like Pão de Ló, Bolo de Bolacha, Pudim de Ovos or Leite Creme)
  • coffee – an espresso in a small cup

Portuguese cuisine relies heavily on meats, mostly beef and pork. A very popular dish, Cozido à Portuguesa, is actually just various types of meats and enchidos (pork tripe filled with pork meat, curated in different ways) combined with vegetables and potatoes. Fish is also very in demand, but mainly in seaside cities. The many cod dishes are eaten everywhere in the country, though – some favoured ones are Bacalhau à Brás, Bacalhau à Gomes de Sá and Bacalhau com Natas.

What all of these dishes have in common is their heaviness – in Portugal people eat good and in great quantities. The drinks are no exception to the rule – wine and beer are the preferred beverages, especially when eating out.

A meal in a traditional Portuguese restaurant (fondly called “tasco”) will cost you anywhere from €5 to €10, with drink, dessert and coffee typically included – this is called “Prato do Dia”. Fancier restaurants range from €10 to €25 per person, usually. However, it all depends on the city and the area of the city in question – downtown Lisbon, for example, has gotten much more expensive over the years.

Clothing

As for clothing, you can find all your regular stores at shopping centres in most cities. The most popular ones would be Centro Comercial Colombo, in Lisbon, and Norteshopping, in Porto. There’s also a lot of secondhand, vintage, and charity shops with cheaper prices, especially in Lisbon and Porto. A popular secondhand chain is Humana, for example. 

Best areas to retire in

Although Porto and Lisbon are the biggest and most popular cities, the centres would not be the best option for retirees. There are many lesser known places with a lot of potential.

Algarve

The Algarve is a substantial region in the south of Portugal, including many different towns that differ greatly from one to the other. Vilamoura and Albufeira, for example, are mostly known for their nightlife scenes and luxurious hotels and resorts and are extremely sought-after and touristy during the summer months. Below you can find some quieter and cheaper towns in the region.

Monchique 

Monchique is a breathtakingly beautiful town in the mountains, fondly nicknamed “the garden of the Algarve”. Here you can go on beautiful hikes with views over the mountainous landscape and Atlantic and enjoy the unique combination of the beautiful nature, the town’s famous craftsmanship and well-being facilities. Definitely the place to go if you’re looking for some peace and quiet and stunning nature. 

Burgau
Burgau, Algarve. Sent in for our Photo Contest. ©Ana Jorge Gomes

A small fishing village, perfect if you love the more wild nature from the western Algarve but enjoy the facilities of a slightly touristy beach town. It has a few cute bars and restaurants and two small supermarkets and it’s especially great if you’re into outdoor activities like hiking, supping, surfing, climbing and coasteering.

Salema

A beautiful tiny fisherman town located in a bay with clear blue waters and white washed houses. It’s the ideal place to stay if you love going for hikes along the stunning cliffs and to enjoy white sandy beaches. The town is situated in the south western Algarve about a 20 minute drive west from the larger town of Lagos, where you can find all the services you need. 

Monte Clérigo (Aljezur)

A very quiet village, with just a few houses on the coast, mostly visited by surfers and Portuguese families in the summer. At sundown, it’s common for groups to get together in a house terrace to appreciate the view and wind down. The town, Aljezur, is a 10-minute drive away and also very calm, endowed with beautiful architecture and some historical sites. The perfect option for those looking for peace, always with flip-flops on their feet – and plenty of seafood to eat.

Nazaré

A beautiful half-moon shaped village by the sea. It’s greatly known for its sandy beaches with great waves, largely sought by surfers all over the world. It is fairly tourist-y during the summer months, however, it’s still a quiet, peaceful area, holding a lot of its traditional Portuguese fishing village culture and ways. 

Braga

Located in the North, Braga is the perfect option if you want peace and quiet but to still enjoy the benefits of city life. It’s one of the oldest cities in the country, making it very historically rich and endowed with beautiful Roman architecture. In recent years, it has become consistently more prosperous in culture as well. 

It’s a very popular option for immigrants everywhere, because of its ample offer of amenities but cheaper prices when compared to Porto – the closest bigger city. Therefore, Braga’s become a little of a melting pot as well. The local university, University of Minho, also plays a big role in the rising diversity and youthfulness of the city. 

Cascais

A beachy town just a 30-minute drive outside of Lisbon. Historically it was the summer retreat of the Portuguese nobility and it has remained a rich area, so prices don’t differ much from those practised in Lisbon. It’s much calmer, though, and still full of culture and local gastronomy. Since it’s so central it won’t be hard to find English-speaking locals, also. 

Covilhã

Covilhã. Sent in for our Photo Contest. ©Filipe Rodrigues

Located in the Castelo Branco district, Covilhã is a small town just nearby Serra da Estrela. It’s quite small and divided in two parts: the “upper part”, where the historic centre and the area closest to the University’s main campus are located, and the “lower part”, where there are supermarkets, restaurants, and a shopping centre. The core population of the city is old people, but, much like Braga, the university brings a lot of young people and foreigners around, making it easier for you to get integrated in the community. A great option for people looking for a more rural, local and traditional experience, who don’t care too much about beaches and sunny weather. 

Ponte de Lima

Located in the almost absolute North of Portugal, Ponte de Lima is one of the oldest villages in Portugal – amazingly full of Roman architecture and history, making it an incredible choice if you want a very classical Portuguese living experience. Although smaller and with fewer foreigners, you won’t get bored. Many Portuguese traditions like the singing style desgarrada, typical craftsmanship (‘Artesanato’) and religious celebrations (‘romarias’) are common here. If you do get bored some time, it’s only a short drive to Spain and other small Portuguese towns around – likewise full of history and culture. 

Leisure activities in Portugal

Portugal is the oldest nation in Europe and therefore full of history – everywhere there’s museums, churches, gardens and various sights and architecture for you to explore and see. 

Culture

Also very culturally rich, every day there’s events like concerts, workshops, movie screenings and theatre plays that you can go to. Movies in Portugal are often not dubbed (except for children’s ones) meaning they will be displayed in their original language, with Portuguese subtitles. Theatre plays are usually in Portuguese, which might be a bit difficult at the beginning, but can also help you learn the language. Portugal is also known for its amazing and many music festivals – broadly happening in the summer months, but with some exceptions in fall/winter.

Nightlife

The evening events, especially in the big cities and in the Algarve, can be a wonderful balance to everyday life. Many restaurants and bars provide live music and invite you to dance and dive into Portuguese culture. Nightlife is also a big part of these cities’ backgrounds – Algarve’s is mostly popular for its many nightclubs, while Porto and Lisbon have more of a bar and street-drinking culture with places like Bairro Alto, Rua Cor de Rosa, Cais do Sodré (Lisbon) and Cordoaria, Galerias and Mártires da Liberdade (Porto) being the most popular. At these events and places a lot of different cultures come together, and you can meet a lot of new people. 

Last but not least, and probably one of the best ways to spend your free time is a road trip along the beautiful Portuguese coastline. Portugal’s beaches are among the most beautiful in the world and the Algarve, in particular, is known for its many beaches to relax and swim in. You won’t ever get bored. 

What kind of fitness offers can I find in Portugal?

To keep your health on track, there’s all types of exercise to choose from. From gyms to golf courses, to water sports such as surfing or sailing, there is an activity for everyone. Numerous hiking trails also invite you to explore the country and nature on your own.

Popular hiking area Passadiços do Paiva. Sent in for our Photo Contest ©Sara Pereira

You can find gyms in all areas of the country – the prices always depend on the respective offer. If you are only interested in normal gym training, a membership costs about €30 per month. If you would also like to take part in fitness courses, or if you are looking for a studio that is also equipped with a swimming pool and sauna, the price can go up to €125 per month. It is advisable to compare offers for different gyms and, if necessary, ask about free lessons to make sure you would enjoy them.

While football is by far the most popular and most played sport in the country, golf is also prevalent and most likely a better option for retirees. All over the country, you will find beautiful golf clubs in the middle of nature, with numerous courses for beginners and advanced. The price range for these courses is very wide. If you have your golf equipment, you will only pay for the booked course or the hours you play. 

Water sports, especially surfing, are widespread in Portugal and surf courses are particularly popular during summertime. Some surf schools also offer classes for adults and retirees. Since there are many surf schools in Portugal, the prices are not too high. You pay between 15€ and 25€ for an hour and as you don’t have a surfboard as a beginner, the equipment is included. 

Learning the Language when you retire in Portugal

What is the best way to learn the language?

When you retire in Portugal, you should also try to learn the language. Language schools in Portugal offer a wide range of courses but if you prefer to learn the language from home, there’s also a lot of online courses and apps, like Babbel and Duolingo, which are mostly useful for deepening vocabulary, but less for strengthening grammar and communication. Some popular Portuguese language schools are CIAL, in Lisbon, and CEL, in Porto. 

Speaking is crucial when learning the Portuguese language, because the phonetic structure is complex, which often makes it difficult to pronounce some words. How quickly you learn the language might also depend on your language skills. People who speak French or Spanish often find it easier to learn Portuguese because the languages are similar.

If you already have previous knowledge, a language tandem would be suitable for you. There are often groups on social media that offer regular events where you meet not only like-minded people, but also locals that you can hopefully try a tandem with. 

How Pearls of Portugal can help you

At Pearls, we help you through the whole process of coming to Portugal and finding a home. From the moment you contact us, we do everything in our power to make sure both your arrival and stay run as smoothly as possible. Our services don’t end the moment you’re settled – apart from an extensive research and consultations on what properties would be best for you, we offer a free after-sales service and assistance in every step of the integration process.

You won’t have to stress about things like knowing what Visa to apply to and how; opening a Portuguese bank account; getting a NIF number; knowing what architect and construction companies to hire in case of renovation and many more aspects, which you can find on this page. You can also contact us for a free consultation.

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