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Portugal (the Algarve region) is considered one of the best retirement locations in the world. This piqued my interest into digging deeper into what’s attracting retirees from all over the world.

The 8 amazing advantages of retiring in Portugal include:

  • Temperate climate with 300 days of sun
  • Affordable cost of living
  • Tax advantage with the NHR program
  • Ease of entry
  • Excellent and affordable healthcare
  • Safe with a low crime rate
  • The Portuguese are welcoming and friendly
  • Laid-back lifestyle

My first experience with Portugal was back in the spring of 1985. The adventure of a lifetime as I backpacked through Europe for six months. While all of the continent beckoned, the Algarve stole my heart and I spent an entire month there!

Thinking back, this was my favorite country. Some of the reasons included the beautiful weather, friendly people and incredible value.

Recently, my wife and I vacationed for six weeks travelling throughout the country. Our article, Practical Travel Tips for Portugal, shares many of our experiences.

Lots has changed over the years, yet in my wife’s words “it feels like home”. Many others agree as evidenced by the large and growing expat community. According to Expatra, Portugal ranks as the #1 best place to retire in 2022.

Let’s expand upon why it’s considered one of the best places to retire.

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1. Temperate Climate With 300 Days of Sun

The Algarve region enjoys a Mediterranean climate with moderate winters and warm summers. In fact, it’s one of the sunniest areas in all of Europe with around 300 days of sun per year.

The Algarve region is greatly influenced by the Mediterranean. Temperatures during the summer rarely exceed 84°F (29°C) and are, usually, accompanied with refreshing sea breezes.

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The climate is almost perfect, especially for someone who dislikes bone numbing winters. Such a moderate climate has great appeal, making it the first of many advantages of retiring in Portugal.

What About Climate Change?

Global warming and the increased frequency of extreme weather is a major factor to consider when deciding where to live. Ideally, I’d prefer to be in a milder climate which isn’t being battered by natural disasters.

For instance, we’ve all heard about the Californian droughts and wildfires. Entire communities have been burnt to the ground and each year seems to be worse than the one before. 

In fact, 73% of southwestern states are experiencing water scarcity and are under drought conditions. At the other extreme, Florida and the east coast have been battered with some of the worst hurricanes in decades. 

These have led to flooding, power outages and other hardships. According to climatologists, due to climate change, these extreme weather patterns will persist and continue to worsen.

Even Portugal and southern Europe experienced a record-breaking heat wave this past summer (2022). Nowhere will be immune to climate change; however, the Algarve area appears to be least affected.

2. Affordable Cost of Living

Who isn’t concerned about rising costs and making ends meet? Sadly, lots of retirees haven’t saved enough and are faced with a dwindling quality of life. This becomes a compelling reason to consider moving to an area with a lower cost of living.

It was a pleasant surprise to realize how inexpensive everything was in Portugal. The following table was compiled from various sources like Nation Master and BLS contrasting the cost of living with the US.

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Furthermore, Portugal has the lowest cost of living in western Europe. According to International Living Global Index, it’s on par with Costa Rica where a couple can live comfortably on around $2,200 per month.

3. Tax Advantage with The NHR Program

Of particular interest is the non-habitual residency (NHR) tax regime. In simple terms, foreign income such as a pension (or Social Security) is taxed at a flat-rate of 10%. This program is specifically designed to attract expats and extends for a period of 10 years.

Further to this, investment income, capital gains, dividends and salaries from abroad are tax exempt. Somewhat unique to Portugal and achieved through their tax treaties with most developed countries.

The NHR program is highly successful attracting over 10,000 new residents since its inception (2009). The reason is the Portuguese population has been in decline for years. Younger workers have left for better salaries and work opportunities.

Through this tax incentive, the tide has turned attracting new residents and thereby stimulating the economy.

4. Ease of Entry

Portugal’s one of the easiest countries to enter and become a resident. As mentioned above, they desire to attract foreigners with means and have made the process as straightforward and simple as possible.

If you’re thinking Portugal might be worth a visit, as a tourist you can stay for up to 90 days. Even as a winter get away, the Algarve is sure to delight. The Portuguese government encourages tourism and, by extension, those who wish to relocate.

There are multiple types of visas which include the Gold Visa, ones for students, workers and the most common – the D7.

As of 2022, the minimum income requirement for the D7 Visa is €705 per month. A spouse would require an additional 50%. This minimum could be met in a variety of ways such as a pension, investment income or a salary from abroad.

The Visa / Residency Process

All visa applications should go through the Portuguese embassy in your home country. These, also, need to be submitted at least a month prior to your planned departure. The following requirements will need to be met:

  • Valid passport
  • Private healthcare insurance valid in Portugal
  • Proof of sufficient means
  • Background criminal record check
  • Accommodation for 12 months

After your application is processed, you’ll be granted a temporary visa. Upon arrival, an interview with Portuguese border and immigration will be scheduled.  It will, then, become a valid one-year residency permit renewed annually for up to 5 years.

For more information, the Digital Emigre, provides an excellent guide.

5. Excellent and Affordable Healthcare

Decent affordable healthcare becomes a priority for all of us as we age. This is where Portugal shines and the World Health Organization ranks them 12th out of 190 UN member countries.

Universal (public) healthcare is delivered through Servico Nacional de Saúde (SNS). All legal residents are entitled to this high-quality medical care with over 200 hospitals throughout the country. The only drawback to their system is the long wait times for non-critical treatments.

Their private system resolves this with more expedient treatment at reasonable rates. Both the public and private systems provide top notch care and many doctors split their practice between these two systems.

The Cost of Healthcare

The majority of essential medical services delivered through the public system are completely free. However, non-essential services can have long wait times and may not cover all expenses.

For example, the surgery for a knee replacement would be at no charge under the public system. However, rehabilitation and other aids may incur additional costs.

In addition, prescriptions, dental or vision care are chargeable. Fortunately, these costs are, for the most part, subsidized and significantly lower than back home.

Private healthcare insurance not only shortens wait times; it also provides additional benefits such as private rooms and addressing any extra costs. Compared to the US, health insurance is a bargain.

An average retired couple can expect to pay around $115.00 a month (or $1,280.00 per year) for a basic plan. Obviously, the extent of coverage, age and any pre-existing conditions will impact these rates.

For further information, Expatica provides an excellent resource on Portugal’s healthcare system.

6. Safe With a Low Crime Rate

Portugal ranks 6th on the 2022 Global Peace Index and remains the safest country in Europe. In contrast, the US is considered far more dangerous trailing in 129th position.

Violent crime is almost unheard of and we felt completely safe throughout our travels. And, that included evening strolls in Lisbon. Overall, we found the Portuguese to be exceedingly honest.

That’s not to say there isn’t petty crime. In particular, pick pockets abound in the crowded tourist areas. Thus, the old saying “an ounce of prevention is worth a pound of cure” truly applies when it comes to thwarting these would be thieves.

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While the vast majority of the population are trustworthy and law abiding, opportunistic theft remains a problem. Any valuables left unattended are at risk of disappearing.

For instance, we heard warnings on several occasions of not leaving any electronics in a vehicle. Likewise, any unattended items on the beach or an outdoor café were at risk. And, all these warnings came from the locals.

7. The Portuguese Are Welcoming and Friendly

The World Population Review revealed Portugal to be the friendliest country in the world to foreign residents. Further surveys reveal over a third of people (36%) say they felt at home right away as compared to an international average of 19%.

According to InterNations:

  • Friendly attitude towards expats: 94%
  • Ease of making local friends: 58%
  • Expats likely to stay forever: 47%

The Portuguese are a warm, open and hospitable people. With such a diverse population of different languages and customs, they’re used to accepting and integrating with foreigners.

English is the second most spoken language and taught in the schools. You’ll find almost everyone speaks some English, especially in the tourist areas. 

Yet, Portuguese is their native language and taking the time to, at least, learn the fundamentals goes a long way.

Portugal isn’t a rich country and tourism has become a major industry for them. Unlike some countries, they embrace it and welcome foreigners. 

Their overall attitude is one of hospitality and helpfulness. We experienced this countless times throughout our travels. One incident, in particular, underscores this.

We arrived late in the evening at the Albufeira train station finding ourselves completely stranded and no taxis available. Completely exhausted with no idea how we’d get to our Airbnb.

Fortunately, a young Portuguese fellow noticed our plight and offered to share his Uber ride. You can’t imagine our relief! The fact he and the driver went out of their way to get us safely to our destination created a lasting impression for us.

This was just one of many acts of kindness we witnessed. As beautiful as the country was, it was the friendliness of the people we fell in love with. Almost everywhere, there’s a small town feel with a laid-back approach to life.

8. Laid-Back Lifestyle

Laid-back lifestyle is the last of the 8 advantages of retiring in Portugal. Retirement should be about getting out of the rat race and enjoying life. In this respect, a slower lifestyle allows the opportunity to refocus and savor those things important to you.

Unfortunately, most North Americans are so used to keeping busy, they don’t know how to slow down. This can lead to culture shock with newly arrived expats finding themselves frustrated by how slow things move.

The reality is getting things done in a timely manner can be downright frustrating. For instance, getting a plumber or electrician can take days or even weeks. The truth of the matter is the Portuguese are not in a rush, plain and simple.

Without a doubt, everything is more relaxed. The national pastime appears to be getting together for coffee. Or as one local called it, going to “take a coffee”.

In addition, they’re more family focused with a greater emphasis on relationships. In short, people matter more than material possessions.

The community spirit is alive and well with almost every little town having a summer festival. They’ll party into the wee hours of the morning with everyone having a great time.

To be candid, there are numerous benefits of a more relaxed pace of life. Stress levels are down and people seem overall happier.

Closing Thoughts on Advantages of Retiring in Portugal

The miles and miles of endless sandy beaches are absolutely stunning. With over 300 days of sunshine and a temperate climate, it’s not surprising so many expats choose to retire here.

Other advantages include a lower cost of living, excellent healthcare system and low rate of crime. The people are friendly with the pace of life more laid-back.

In my opinion, all these factors promote a higher quality of life and better retirement.

  • Thanks for posting this, as Portugal has always interested me. I’ve heard nothing but great things about it, and it makes me want to visit. Safe travels, and thanks for sharing this great info!

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