Wednesday, September 19, 2018

Retire in Portugal - Affordable Europe

Would you like to retire in Europe, but cannot afford to live in one of the more famous cities, such as London, Paris, Prague or Venice?  A country you may wish to consider is Portugal.  Retirement there is very affordable when compared to most locations in the United States.  In addition, with a Eurail Pass, it is easy to travel throughout the rest of Europe and see all those places you hoped to enjoy in retirement.

According to the website International Living, it is relatively easy for Americans to relocate to Portugal and the cost of living is more reasonable than most other European destinations.  Of course, anyone who seriously plans to retire in Europe should investigate their options thoroughly, beginning with an extended vacation in Portugal.  However, the information below will give you an idea if this is a place which could work out for you.

Portugal is Charming and Affordable

Portugal is one of the smaller countries in Europe.  It is only about the size of the state of Vermont and has a population of about 11 million people.  The vast majority of people in Portugal are Roman Catholic Christians.

The weather is generally beautiful, there are many courses where you can play golf, and it has a lengthy coast along the Atlantic Ocean.  Northern Portugal is mountainous and tends to be cooler and rainy; the southern part of the country consists of rolling plains and is warmer and drier.

Expatriates are most likely to be found in the areas of Portugal known as the Algarve, the Alentejo and the Silver Coast.  According to reports from "International Living," a variety of rental properties can be found in the $450 to $550 per month price range, rising to around $1,000 a month in the more popular areas of Lisbon.  International Living has reported that a couple can live in the countryside for about $1,750 a month, including their rent.  If they live in Lisbon, their monthly expenses will rise to about $2,250 a month.  Utilities cost about $80 a month.

Small condos and cottages can be purchased in the Alentejo region for $65,000 to $100,000.  However, experts highly recommend people rent for a year or more before purchasing property.  This will give you the opportunity to decide if you have moved to an area you enjoy.  When you do purchase a home, be sure you use a real estate agent and have a lawyer check the title and review the contract.

The country is beautiful and relaxed.  In the cities, expect to find charming roundabouts, statues, fountains, cobblestone streets, parks and outdoor cafes. Around the countryside there are a variety of castles and cathedrals.

Healthcare in Portugal

Good healthcare is available, particularly in the private hospitals.  New residents will need to obtain private health insurance.  Medicare from the United States cannot be used if you are a permanent resident of another country.  However, if you only live in Europe part of the year, you may want to maintain your Medicare policy in the United States so you can use it when you return to the states.

You can qualify for health insurance in Portugal if you have a job there and pay into their social security system.  If you are retired, you will need to purchase a private health insurance policy.  The U.S. Embassy advises that you obtain your insurance through a private Portuguese hospital or clinic.  One couple who described their experiences on the International Living website said they pay about $250 a month for the two of them to have health insurance.

Portuguese Visa Requirements

When you first visit Portugal, you do not need a special visa to enter the country.  You can stay up to 90 days without one.

Once you decide to move there permanently, you will need proof of private health insurance and enough funds to support yourself in Portugal.  Then you will be able to apply for a Type 1 Visa by submitting an application to the nearest Portuguese Consulate.  You cannot relocate permanently to Portugal or stay longer than 90 days until you have the visa.  If you want to work in Portugal, you will need a Permanent Residency Visa.  Foreigners can also set up a company in Portugal, if they are legal residents and have the necessary permits and capital.  This is another situation where it would be wise to consult with a lawyer and, possibly, a local accountant.

Once you are living in Portugal, you will want to open a local bank account.  The U.S. government will direct deposit your Social Security benefits into a European bank for you.

Portuguese Taxes

Portuguese income taxes depend on whether you are classified as a resident or non-resident.  Workers pay income taxes ranging from 14.5% to 48%, based on their total income from around the world.

Depending on your investments, you may also be required to pay a capital gains tax.  In addition, the country has a Value Added Tax on certain restaurant services and agricultural supplies.  Talk to a tax advisor or accountant to see how much of your income will go to cover your taxes, so you understand exactly how much of your assets will be available to pay for your living expenses.

Investigate, Investigate, Investigate

Whenever this website recommends a place to live overseas, we high recommend you check out the State Department website for any advisories or warnings regarding foreign countries.  In addition, I also recommend that you vacation in a place before you move there and, during your trip, you should consult a real estate agent, a lawyer and, possibly, a tax attorney so you can minimize any surprises.

You also need to be prepared for fluctuations in the value of the dollar against the currency of the country where you are moving.  As the value of your Social Security check rises and falls, you may find it easier or more difficult to cover your expenses.  You want to make sure you have allowed for a margin of error, so you are not forced to leave because you cannot afford to stay.

Finally, read everything you can before moving to country.  Expatriates have written about their lives in virtually every corner of the world and they often have helpful tips to make your transition easier.

If you are interested in learning more about where to retire abroad or in the United States, or financial planning, Social Security, Medicare, common medical problems and more, use the tabs or pull down menu at the top of the page to find links to hundreds of additional helpful articles on a variety of topics.


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