Portugal is generally cheaper than Spain for retirement, offering a lower cost of living, especially regarding housing, utilities, and dining, with monthly expenses for couples often ranging from €2,500 to €3,000 outside major cities. Portugal also features lower income requirements for retirement visas (€870/month).
Choosing between Portugal and Spain for retirement ultimately comes down to your personal priorities and lifestyle preferences. If affordability, a slower pace of life, and access to a relatively simple residency path are top of mind, Portugal may have the edge.
Spanish tax residents are taxed on their worldwide income, while non-residents are only taxed on Spain-sourced income. For retirees, this often includes pensions, investment income, rental income from property in Spain, or US Social Security received while residing in Spain.
Bad things about living in Portugal include significant bureaucracy, low local salaries versus rising costs (especially housing), limited public transport outside major cities, slow justice, and potential cultural adjustments like a strong language barrier and different driving norms, plus challenges with aging infrastructure and an strained public healthcare system.
U.S. Social Security benefits and other foreign pensions are treated as ordinary income under Portuguese tax rules, subject to the same progressive rates. U.S. expats living in Portugal are required to file their U.S. federal tax returns and pay tax if applicable.
Some cons of retiring in Portugal include the slow pace of life, which doesn't suit everyone, bureaucracy and long waiting times, the need to carry cash, no central heating, and relatively low salaries compared to other European countries.
Social Security Benefits in Portugal
The good news is you can still collect US Social Security benefits while living in Portugal. The Social Security Administration pays benefits to retirees in over 150 countries, including Portugal.
Please note: Portugal does not offer free medical treatment to visitors, and under European Union rules non-EU citizens are required to have travel medical insurance covering emergency medical, hospitalization, and repatriation (including the case of death).
Portuguese people value quiet elegance and discretion. Loud conversations, boisterous behavior, or drawing unnecessary attention in restaurants, cafes, or historic sites can come off as disrespectful. ✅ Do this instead: Speak calmly, respect the atmosphere around you, and enjoy the slower rhythm of Portuguese life.
It's hard living in a country where you don't speak the language, understand how everything works, or have a big social group. You might decide you miss your friends and family too much. Some people decide that they miss things about their home country, even simple things like the food or specific shops.
What's Spain's 100% Tax All About? The proposed 100% property tax means that non-EU buyers, including British nationals, would need to pay a tax equal to the property's purchase price. So, let's say you choose to purchase a villa costing €200,000, you will need to pay an extra €200,000 in taxes.
Under the agreement, however, you may receive benefits as long as you reside in Spain regardless of your nationality. If you are not a U.S. or Spanish citizen and live in another country, you may not be able to receive benefits.
Both Spain and Portugal provide universal healthcare funded by taxes. Spain's system is larger and highly ranked, while Portugal's is affordable but slower, with longer wait times for specialists. Public health insurance, in both countries, can be accessed by expats who are legal residents.
Private Pensions, 401(k)s, IRAs: As mentioned, these pensions are taxed in your country of residence. If you are a tax resident in Spain, this income is declared and taxed in Spain. You can then claim a Foreign Tax Credit on your US return for taxes paid to Spain to avoid double taxation.
I find Portugal – even in the middle of the cities – tends to be very casual. People mostly dress not to stand out – think muted tones, lots of jeans and t-shirt combos with sneakers. Practical, comfortable and smart casual is how I'd describe true Portuguese style.
About 70% of Portugal isn't literally empty but refers to its vast, depopulated interior, driven by rural flight to cities and abroad for better economic opportunities, resulting in aging populations, abandoned homes, and development gaps, while coastal areas remain densely populated and face housing shortages, creating an uneven demographic landscape. Key drivers include historical emigration, low birth rates, economic crises, and bureaucracy hindering new construction, leaving many rural areas deserted as younger generations leave for better prospects, notes Reddit users and other sources https://www.youtube.com/watch?v=RLVzIevbcuo,.
Bad things about living in Portugal include significant bureaucracy, low local salaries versus rising costs (especially housing), limited public transport outside major cities, slow justice, and potential cultural adjustments like a strong language barrier and different driving norms, plus challenges with aging infrastructure and an strained public healthcare system.
In most situations, Medicare won't pay for health care or supplies you get outside the U.S. The term “outside the U.S.” means anywhere other than the 50 states of the U.S., the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.
If you earned Social Security benefits, you can visit or live in most foreign countries and still receive payments.
They can also deposit benefits into a financial institution in any country that has an international direct deposit agreement with the U.S. (check out the SSA list of countries with direct deposit agreements).
The healthcare system in Portugal consists of three components. The first is the National Health Service (in Portuguese: Servico Nacional de Saude or SNS). This is a form of subsidized state care for people who contribute to the social security system.