Top 8 Places to Retire in Portugal: A guide for expats

Many expats prefer to retire in Portugal because it is a great place to slow down and enjoy life. So if you plan to settle in Europe’s most affordable country, try Portugal.

You will find warm weather, affordable luxuries, and a relaxed pace of life. Moreover, people are friendly, have a dependable climate, and have plenty of low-cost thrills on hand.

The country offers special tax breaks, free healthcare, and discounted utilities for expats. However, you often have difficulty deciding where to start because there are so many options.

Now you may be probably curious about the best places to retire in Portugal. As a result, I have listed eight ideal places in Portugal, great for retirees, which can help you make a move to this idyllic land.

The best Places to Retire in Portugal

best places to retire in portugal

01- Lisbon

Lisbon, the capital of Portugal, is a great place to retire. It’s a vibrant city with many cultural offerings, including street festivals and music.

The city has a mild climate, perfect for year-round living. Therefore, many retirees choose to live in Lisbon due to its low cost of living and abundance of cultural attractions.

Most of Portugal’s major tourist attractions are within a two-hour drive of the capital, making it a quick place to travel onward. In addition, it has a short drive from the beautiful mountain and coastal areas. Lisbon is a melting pot of cultures, and you’ll find yourself immersed in a new world.

Lisbon for expacts

02- Southern Algarve

The Southern Algarve, nestled between Spain and Portugal’s capital city of Lisbon, has several perfect beaches for those who want to explore their retirement years.

This region is rich with opportunities for water sports like fishing and boating and its lively nightlife. Furthermore, many attractive villages such as Cacela Velha, Armão de Pera, and Vale do Lobo.

In general, western Algarve has mild weather with warm days and slightly colder nights during winter; most days throughout spring and summer are pretty lovely, so there’s rarely any rain either.

Algarve Portugal

03- Lagos

Choose from Lagos, a popular destination on Portugal’s southern coast with picturesque beaches. You will discover a bustling fishing port complete with vibrant local markets.

04- The Portimão

Portimão, farther north along the coast, or Costa Vicentina, straddles two Portuguese regions (the Algarve and Alentejo). This town features many white-sand beaches that are perfect for spending lazy days. Similarly, there are plenty of hiking trails nearby.

05- The Quarteira

This city has lovely beaches and many green parks to enjoy sunny days sitting on your porch drinking port wine (or just relaxing).

06- Costa Vicentina

Costa Vicentina is located along Portugal’s coastal line, and it is an ideal place to retire in Portugal. Here you can find several quaint villages sprinkled throughout its rolling hills. It has long stretches of unspoiled beaches and quiet country lanes for biking and hiking.

The region has many things to offer to help you enjoy a comfortable retirement. Its small towns and villages are packed with charming cheap restaurants, oceanfront bars, and affordable vacation rentals. You can also find budget-friendly medical services in small towns in the region.

Costa Vicentina is also one of Portugal’s most affordable places to retire. You can find an apartment for a few hundred euros a month and enjoy the sun and sand for free.

Costa Vicentina Portugal
Retire in Portugal

07- Central Alentejo

When deciding where to retire in Portugal, don’t overlook Central Alentejo. This area lies inland in southeast Portugal. Its large cities include Évora and Beja, but smaller towns such as Monsaraz and Reguengos de Monsaraz.

The medieval town of Monsaraz, for example, was once a fortified stronghold on an important pilgrimage route. As a result, its old town center contains buildings and monuments that date back as far as 500 BC. Nearby, you’ll find natural attractions such as caves and lakes, plus a wealth of cultural activities like wine-tasting tours, golfing, and hiking.

Évora and Beja are increasingly popular for expats who want to retire abroad or city-dwellers looking for a change of pace.

Alentejo Portugal

08- Faro Region

Faro has established itself as one of Europe’s top retirement destinations in recent years. Its Mediterranean climate has a minor rainy season from October to April and an even smaller snow season between December and February. However, the snow rarely lasts longer than a day or two during these months, and it is even rarer in December.

Each year about 19 inches of rainfall on Faro, plenty for trees, shrubs, and flowerbeds but not so much that residents have to worry about flooding. But what separates Faro from other European retirement hubs are its properties.

Houses in this city are much more affordable than those on most Spanish islands (especially its neighbour across the Strait of Gibraltar) yet still offer outstanding ocean views.

So, in Faro, you can find a one-bedroom apartment for as little as $350,000. But if you prefer not to live in a multifamily building. Otherwise, you can purchase a detached house or villa with views of either ocean or countryside starting at around $500,000.

Cost of living in Portugal for foreigners?

In Portugal, those planning to retire often wonder: How much money will I need?

In reality, renting an apartment or home and cooking your meals or eating out will be pretty affordable compared to most Western European countries. Utilities are affordable as well.

You could live comfortably off 3K€ per month if you’re careful with your expenses. So, an apartment in Lisbon can cost upwards of 500-700€ per month on average.

As for household bills, electricity will run about 35-50€ a month on average (including gas and water), depending on your usage and heating/cooling needs. Moreover, the internet might be 100-150€ per month, depending on your speed and usage.

If you’re working, it’s possible to get a pension from your home country as well. But, again, your money would be deposited into an account and wired to your bank account here.

Unlike if you don’t work, you can still get a basic old-age pension from age 65 (65 for men; around 63 for women), but that won’t cover all of your expenses unless you’re very frugal with how much you spend each month.

If you live outside Lisbon or Oporto, utility and healthcare costs can rise significantly. And if any other people are living with you or dependents who rely on your income, that could impact how much money you need for retirement as well.

Retiree visa in Portugal

Retiree visas in Portugal exist for those interested in living out their golden years outside of their native country. To qualify, you must meet specific age requirements, health standards, and financial thresholds. Unfortunately, you won’t be eligible for a retiree visa if you don’t already hold citizenship from an EEA country (United Kingdom, Germany, or France).

However, there are several visa programs for citizens from Europe, such as Canada or Australia. Those visas are geared explicitly toward retirees who want to live abroad and work part-time jobs while saving up money for retirement.

D7 visa of Portugal

For non-European Union citizens and pensioners who wish to settle in Portugal, a D7 residence permit is required.

They will need to meet specific eligibility criteria to apply for Portuguese D7 visas, such as proof of identification, income, medical insurance, and accommodation.

Portugal’s consulate or embassy receives the visa applications. So, the cost of applying for a D7 visa is roughly €300, while it’s less expensive than other European countries.

Also Read: D7 Visa Portugal Requirements

Visas and Residence Permits requirements

If you’re planning on retiring in Portugal, you’ll need to apply for a Residence Permit and a Visa to be able to do so.

Please note that visa requirements and the type of visa required may vary depending on your purpose of stay, citizenship, and the type of visa required for your nationality.

Visas are the easiest type of immigration status for retirees to obtain. However, residency permits are better for those wanting to keep their options open and travel more. For example, residency permits do not require you to work in order to maintain your residence in Portugal.

Type-One Resident Visa

If you’re interested in retiring in Portugal, a Type 1 Resident Visa will allow you to spend an extended period of time in the country.

The Type 1 Resident Visa is for non-European Economic Area (EEA) citizens who wish to live in Portugal for a prolonged period.

This is the most popular visa category, and is often a requirement for those who wish to apply for Portuguese citizenship.

Once you have obtained a Portuguese residency card, you are free to travel throughout the Schengen Area. You will also be able to conduct business in Portugal and the Schengen Area without needing to obtain a work visa.

You can also bring your family to Portugal with you on a spouse visa, as long as they have been married for at least three years.

Pro and Cons

In reality, a comfortable living after retirement is a dream of thousands. The downsides, however, cannot be overlooked. While there are pros and cons for every country, here’s what we’ve found about living in Portugal as an ex-pat.

The apparent benefit of immigration to Portugal is cheaper than other Western European countries. If you’re used to spending your retirement savings quickly, then a lower cost of living can add up over time. On the other hand, Portugal offers excellent healthcare and other social benefits.

The biggest drawback is cultural changes that come with relocating. Moreover, the cost of living in a rural setting can be high, and the availability of services and amenities may be limited.

Portugal is not the most stable economy globally, and sometimes expats face unexpected price increases and other unexpected costs.

Above all, the language barrier can be challenging to overcome, and some expats often complain about the state of the public infrastructure.


Are American retirees welcome in Portugal?

This coastal country has a robust retirement community, with a number of communities that welcome both American and European expats. The Portuguese island of Porto Santo, for example, is home of American expats, who enjoy the warm weather and vibrant nightlife.

Where do expats live in Portugal?

Many expats choose Algarve as their retirement spot. This region offers plenty of sunshine, beautiful beaches, and a Mediterranean style of living.
Lisbon and Porto are other popular areas for retirement, but these two locations have significantly higher cost-of-living expenses than Algarve.
Faro, Sagres, and Lagos are among Algarve’s most popular destinations. A short flight from Lisbon or Porto can reach these coastal cities.
Other popular towns where retirees live include Albufeira, Vila does Bispo, and Olhão. All three offer direct flights from both Lisbon and Porto on low-cost airlines.

Can foreigners retire in Portugal?

Yes, of course! Portugal is a dream retirement destination for many foreigners. The country has a mild climate, a thriving retirement culture, and a slew of retirement visa options that make it easy for foreigners to retire overseas.

Does Portugal tax US Social Security?

US Social Security benefits are subject to US federal income tax, just like benefits from other types of US retirement plans, like 401(k) s and IRAs. However, some people get taxed on their Social Security benefits even when they are a resident of a different country.
This happens when a person receives their Social Security payments from a country other than the one in which they are a resident for tax purposes. If you receive your Social Security payments from Portugal, for example, you may be subject to Portuguese tax on those benefits.


Portugal is a gorgeous country with a unique culture and rich history. It’s also a wonderful place to spend your retirement. With the low cost of living, it’s easy to maintain a comfortable lifestyle on a fixed income.

However, English speakers may have a bit of a language barrier. Although this isn’t a huge disadvantage, it should be considered.

Also, Portuguese culture is distinct from Western culture, which can make navigating social situations challenging.

Hence, in this article, I have highlighted some essential aspects of retirement in Portugal to guide aspirants in the right direction.

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