While many people compare Portugal to Latin America because of it’s vibe and language (Portuguese is also spoken in Brazil), it’s a unique country located in Europe that is trending up the ranks as one of the best places to retire on a budget.
Today I present you a video, as well as a transcript, from people who actually retired to Portugal. They address the cost of living in Portugal, the Visa process, taxes, healthcare, and much more. I found this read an interesting share since Portugal made the top ten countries to retire to in 2020 list.
Amon: Hey guys, this is Amon-
Christina: -and Christina, from Our Rich Journey. We are coming to you from our home in Lisbon, Portugal. If you’re new to our channel, we just reached financial independence. We retired early and we moved to Lisbon. We did a video on retiring early and we recently gave you a minimalist home tour of our place in Portugal. We got a lot of comments from both of those videos because people were wondering why we decided to move and retire to Lisbon, Portugal. In this video, we are going to talk about the top 10 reasons why we decided to retire early in Lisbon, Portugal.
Amon: The number one reason why we chose Portugal was because Portugal is very welcoming and it is especially welcoming to foreigners. We wanted to go to a place that we can go to and feel right at home. We’ve lived all over the world in various environments and when we came to Portugal just to visit we felt at home. When we started to do our research in detail about Portugal, we realized just how welcoming it was.
Christina: It’s not just our perception either. Before we decided on Portugal, we were looking at different countries and Portugal was always coming up on top in terms of the country that’s most welcoming to foreigners.
Amon: When we arrived and moved here and knew absolutely no one, we felt secure that we would be able to assimilate quite well. In fact, over the past month, we have made so many friends, it feels like we’ve lived here forever. The next reason is language. Portuguese is a very difficult language to learn. What’s amazing is that you don’t have to speak Portuguese when you first get here.
We have an eventual plan to learn Portuguese. When you first arrive in Portugal, one of the things that you recognize right away is that so many people speak English. We have been in situations where maybe we’re dealing with a person that doesn’t speak English, but another Portuguese person will come out of nowhere and say, “Let me help you guys. Let me do the translation.” That is prevalent all over Lisbon.
In fact, there hasn’t been a single situation that we have not been able to speak English. We have set up bank accounts, we have signed leases, we have entered into contracts that have been translated in both Portuguese and English and we have spoken and dealt with people in English. This is an amazing thing when you’re first moving to a country, and you don’t speak the language.
Christina: We looked at the statistics, and we found that 35% of people in Portugal speak English. As you get to the larger cities, more people speak English. We live in the capital of Portugal, in Lisbon, and there are a ton of people that speak English. What I really want to go back to is that point that Amon said about our lease. Our rental here is in Portuguese and English. It’s very hard to move to a foreign country and have that option to sign contracts that are in both languages. That is something that really drew us to Portugal.
Amon: The next reason was because of the diversity here in Portugal, and in particular, Lisbon, Portugal. Lisbon is a big city so you have people here from all over the world. They’re speaking multiple languages. We were just so impressed the first time we came to Lisbon, and just saw this place that was a melting pot, all these different cultures in one place. In fact, we did something special for this video, we went out and we just wanted to capture all of the beautiful faces of Lisbon.
We walked up on absolute strangers, and we said, “Can we take a video of your face for two or three seconds and put it on our YouTube channel?” They said, “Yes.” This goes back to Lisbon being this welcoming place, but just being able to walk up to an absolute stranger and say, “You are beautiful, and we want to put your face on our YouTube channel”, and they said, “Yes.” This is why Lisbon is so special to us.
Christina: The next reason why we chose Portugal is because of the visa process. We were looking at all different places to retire in. Of course in the States, we don’t Need the visa process but we’re also looking at Spain. One of the big differences between Spain and Portugal is that Portugal has a much smoother and easier visa process.
Amon: If you’ve ever immigrated to a country, you know that the visa or the immigration process can be extremely stressful. Here in Portugal, they make this process as smooth as possible. We’re not saying it’s perfect, but you feel like you’re making progress towards it. When we started to fill out the paperwork and go through the different applications, we realized that this was going to be a less stressful process.
Christina: We applied for the Portugal passive income visa, it’s the D7 Visa. Like we said, the process was very smooth. One of the great things about applying for the visa is that we could apply completely in English. We didn’t need to translate the application into Portuguese and so that was a huge benefit in terms of the ease of process in applying for a visa here.
Amon: There are several different visa that you can apply for, but the Portugal passive income visa was the most appropriate for us as early retirees, is for people living off of a pension, or people like us that are living off of their assets. To qualify for this visa, you basically have to prove that you have enough income from your assets or your pension to be able to sustain yourself here in Portugal. What counts as income? It can be retirement income, like pensions, or it can be income from your real estate or your investments.
Christina: No matter what the visa that you apply for in Portugal, our experience has been that it’s a very smooth and easy process.
Amon: The next reason why we chose Portugal was because of taxes. Portugal has a very special circumstance here for foreigners, especially foreigners that have pension or income that is produced outside of Portugal. If you come to Portugal, you can apply for something called a non-habitual residence. Under this particular tax scheme, you can either pay reduced taxes or no taxes on the income that you are bringing into Portugal.
Christina: For us in particular, it would be no taxes and it’s for a period of 10 years. We will not be paying Portuguese taxes for a period of 10 years. That is a huge incentive and we have not seen any other country that offers that type of tax incentive for foreigners.
Amon: We’re going to do a whole video on taxes in Portugal, but just know that we chose Portugal because of how they were going to tax our investment portfolio. That is what we live off of. We live off of our investments, and so paying reduced or no taxes on those investments was very important for us. The next reason why we chose Portugal was because of the healthcare system. We get this question all the time, “Especially as an early retiree, what are you guys doing about healthcare?” Here in Portugal, our family of four only pays $1500 for the entire year. That’s all we pay for in health insurance.
Christina: We would also qualify for the public health insurance which is free, but as part of our D7 visa application we had to purchase private health insurance. For us, we purchased that private health insurance at a very incredible affordable price. Price is not the only thing for healthcare here. That was the incentive that wanted us to retire here in Portugal. It’s not just price. It’s actually about the quality of healthcare also. The World Health Organization ranks Portugal as number 12 in the world for its healthcare system. That is better than the United States. That was a huge draw for us when we were deciding whether to retire in Portugal.
Amon: Our health insurance is only $1500 for the entire year which leads us to the next reason why we chose Portugal, was the cost of living. Cost of living is relative depending on where you’re from. For us when we were talking about financial independence, our number was based off of retiring in the San Francisco Bay Area. When we achieved financial independence, based off of the San Francisco Bay area for us to come to Lisbon, Portugal we are Getting a bargain.
Here in Portugal, our apartment is one-fourth the cost of what it would be in San Francisco. In fact, if we chose to buy a place here, it would even be much cheaper for us but for now, we are renting. It’s not just the cost of our rent, food, healthcare, almost everything. Our kids’ education is so much less here in Portugal. You know what? I’ll just give you an example. There’s this thing called the latte factor where in the US they will tell you, “If you get rid of your lattes and save that money, invest that money, you will be a millionaire one day.”
The latte factor is not a factor here in Portugal, because the cost of a latte is 60 cents. 60 cents? Compare that to a latte in the US, that can be $5 at least. In San Francisco, they were like $7 per latte. We have lattes every day. We have several lattes a day because it is so affordable here.
The next reason why we chose Portugal was because of the education system, and in particular the education that our children would have access to here in Lisbon. There are a number of excellent private and public schools here in Lisbon. The education that our children get here, they can take that education and go anywhere else in the world. They can go to a school in the UK, in the US, in Asia, wherever they want to, and it is because of the great system that they have here in Lisbon.
Christina: We picked a neighborhood that had great public and private schools, and we ultimately decided to put the girls in a private Portuguese school. We decided to go that route because the classes are very small. What we love about this private Portuguese school though, is that the classes are taught in Portuguese. They’re small classes taught in Portuguese, but the teachers also speak English, so if our girls are ever struggling, the teachers can assist in English as well.
Amon: You know what? I love this school. Our kids are assimilating perfectly. In fact, Sinoah came home yesterday and she has the second-highest math grade in her class. Math there’s not a lot of speaking going on it’s all numbers, but she’s heading in the right direction.
Christina: When we’re going over the work that they’re doing now we’re seeing that it’s a natural progression from what they were studying before, it’s not like they’re reverting back and they’re studying stuff that they already knew, they are progressing and they’re doing really well, and they’re learning a lot of new material at this school.
Amon:: Education was not just about what our children were going to learn. There are also so many universities and so many other opportunities to learn here in Lisbon. It’s great for me and Christina. In fact, there’s the University of Lisbon here which is a large, huge campus. We were at it the other day. There is so much that we can get into just at that university.
Christina: The next reason why we wanted to retire in Portugal was because of the safety. Of course, we are a family of four, we have two young girls and we definitely wanted to go to a country where we felt safe. The Global Peace Index ranked Portugal as the third safest country in the entire world. Unless you’re from New Zealand or Iceland, your country is not as safe as Portugal. That is something that really drew us to Portugal. We really wanted to go to a country that we felt safe.
We really want to stress safety on this because we know a lot of you may have families and may have young children, and that’s a huge concern going to a foreign country and really feeling safe in that country. This place is incredibly safe, it’s not just the numbers, it’s not just that it’s ranked third in the world, you actually feel safe when you go out. You can go out at night, you can be a woman all on your own at night, and you’ll still feel the safety even though being in a big city.
Another reason why we decided to retire in Lisbon, Portugal, is because there are so many things to do in this city. We said we retired. Our goal in retirement is not to just sit at home and do nothing, we want to go out, we want to see the city, and Lisbon has all of the opportunities and so many things to do here.
Amon: Any day of the week, Christina and I can go out and find an activity to get involved in. We spend so much time outside of the house just doing things. We go to the beach, we go to the mountains, we’re at the library. We go to different festivals. Christina and I are always out and about. In fact, we’re always doing meet-ups with people and talking to them about financial independence. There is a great financial independence community here.
Christina: It’s not just activities for us, there are activities for the girls as well. Sinoah is really into basketball, and Malia is very much into swimming and they compete at a very high level. When we are looking at a country that we wanted to move to we wanted to make sure that they could still continue to compete at the high level that they’re used to competing at.
Now Sinoah has a basketball team that competes at the national level. We’re very excited that she gets to play for this team, and Mal has found a swim team where they practice every single day, and they also have swimmers that compete at the national level.
Amon: Those are our reasons for picking Portugal to retire early to. Lisbon is an amazing city, but there are other great cities in Portugal. You should definitely check those out. As usual, if you liked this video, please give it a thumbs up, subscribe to our channel and-
Christina and Amon: -join the journey.