Portugal continues to attract retirees from around the globe with its affordable cost of living, high quality of life, and welcoming atmosphere. Whether you're considering relocating to the sun-kissed Algarve coast, the historic streets of Lisbon, or the tranquil towns of the interior, understanding the financial aspects of retiring in Portugal is crucial. Here's an updated look at what you can expect in 2025 when it comes to the cost of retiring in Portugal.
Monthly living costs for retirees in Portugal
Living in smaller towns or rural areas
For those wanting to retire in Portugal seeking a quieter lifestyle, Portugal's smaller towns offer exceptional value. Retirees can live comfortably on a monthly budget of approximately €1,400 to €1,800. This includes rent, utilities, groceries, dining out, and transportation.
Living in major cities
In contrast, larger cities like Lisbon, Porto, and the Algarve region are more expensive. A comfortable lifestyle in these areas typically requires a monthly budget ranging from €1,800 to €3,200, depending on the neighbourhood and personal lifestyle choices.
Housing costs
Housing is one of the most significant expenses for retirees. Here's a breakdown:
- Renting: Monthly rents vary by location. In Lisbon, a one-bedroom apartment in the city center averages around €1,100–€1,500, while in smaller towns, it can be as low as €500–€700.
- Buying Property: Property prices have been rising, especially in popular areas. As of 2024, the average price per square meter in Lisbon is approximately €2,500, while in rural areas, it can be as low as €1,000.
Find property for sale in Portugal with idealista, and if you're not ready to commit, check out our wide range of properties for rent across the country.
Daily expenses
- Groceries: Monthly grocery bills for one person average between €150 and €250, depending on dietary habits and shopping preferences.
- Dining Out: Eating out is affordable. A meal at a budget restaurant costs about €10–€12, while a three-course meal for two at a mid-range restaurant is around €40–€60.
- Transportation: Public transportation is efficient and economical. A monthly public transport pass in Lisbon costs approximately €42, and taxis start at €3.50.
Find out more on how much money you need to live comfortably in Portugal.
Healthcare in Portugal
Portugal offers both public and private healthcare options:
- Public Healthcare: The Serviço Nacional de Saúde (SNS) provides public healthcare, which is either free or low-cost for residents.
- Private Health Insurance: Many retirees opt for private health insurance for quicker access to services. Monthly premiums range from €50 to €150, depending on coverage and age.
Tax considerations
Portugal is known for its favourable tax policies for retirees:
- Non-Habitual Resident (NHR) Tax Regime: This program offers significant tax benefits for new residents, including a flat 10% tax rate on foreign pension income for up to 10 years.
- Income Tax: The standard income tax rates range from 14.5% to 48%, but retirees often benefit from exemptions or reductions under the NHR regime.
Sample monthly budget for a retired couple
| Expense Category | Estimated Monthly Cost |
|---|---|
| Rent (2-bedroom apt.) | €700–€1,200 |
| Utilities | €100–€150 |
| Groceries | €250–€300 |
| Dining Out | €150–€200 |
| Transportation | €50–€100 |
| Health Insurance | €100–€200 |
| Total | €1,350–€2,150 |
This budget reflects a comfortable lifestyle in a smaller town. Living in Lisbon or Porto may increase costs by 20–30%.
Key takeaways for foreigners thinking of retiring to Portugal
Retiring in Portugal offers a blend of affordability, quality healthcare, and a pleasant climate. With careful planning, retirees can enjoy a comfortable lifestyle without the financial strain often associated with Western Europe. Always consider consulting with a financial adviser familiar with Portuguese tax laws and cost of living to tailor a plan that suits your individual needs.