Various reasons are drawing American retirees to leave the US, primarily seeking an enhanced quality of life where the benefits of Social Security income and savings can stretch further. Key drivers also include less expensive universal healthcare services and, more recently, a calmer political environment. In addition to Portugal, American retirees are relocating to several countries, including Greece, Italy, and the UK, among others.
Portugal For Retirement: A Data Glimpse
The number of American citizens living in Portugal[1] has surged more than sevenfold since 2017, according to the Agency for Integrations, Migration, and Asylum (AIMA), rising from around 14,813 in 2023 to a total of 20,959 Americans in 2024.
According to the Annual Statistical Supplement to the Social Security Bulletin[2] 2025, retirees represent around 71% of the total number of Americans living in Portugal, with a total of 11,359. This reality makes Portugal one of the most concentrated areas for American retirees in Europe.
Choosing Portugal for retirement has never been a rash move for American retirees. Their selection was triggered by several reasons, including:
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Visa and Residency Solutions for Retirees
Portugal offers several options for American retirees to relocate and reside legally in the country, with the most common option being the Portugal Golden Visa. This requires investing worth $500,000 in a Portuguese investment fund, such as an equity or venture capital fund.
US investors can leverage their Individual Retirement Account (IRA) and invest their retirement savings without triggering penalties or tax issues if they invest in the Portugal Golden Visa. However, if they withdraw their funds directly from their retirement accounts before retirement age, they are subject to penalties. A self-directed IRA account enables US investors to invest beyond traditional stocks and bonds. It allows them to benefit from alternative assets, including qualified investment funds, without the need to establish a Limited Liability Company in the US or Portugal.
American retirees can also obtain residency through the D7 visa, often referred to as the passive income visa.
Read also: Portugal Golden Visa: How Can Americans Use Their IRA to Qualify?
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Lower Cost of Living
The rising costs in the US are one of the main reasons that motivate retirees to look beyond their borders. Retirees are usually attracted to nations that provide less expensive healthcare services, lower daily expenses, and affordable housing costs, and Portugal for retirement is a right fit for their requirements.
Their dollars from savings and Social Security income are of higher value in Portugal. According to Numbeo[3], the cost of living in Portugal is 28% lower than in the US, excluding rent, and 30% lower including rent. Real estate rental prices are 36% lower, groceries (36%), restaurants (35%), and local purchasing power (54%) lower than in the US.
Moreover, with most retirees’ income in dollars, converting dollars to euros can have a positive impact on their lifestyle. The average monthly expenses for a single person in the US reached $6,500 in 2023, while it doesn’t exceed $800 depending on the region or city they are living in. Smaller towns and less tourist-driven regions are even cheaper.
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Diverse Lifestyle Options and Peaceful Pace of Life
Apart from financial reasons, Americans choose Portugal for retirement for the exceptional lifestyle it offers. Retirees can choose between the vibrant streets of Lisbon and Porto, the inland medieval villages, or the sun-drenched southern coast, where year-round swimming and a laid-back seaside lifestyle are part of everyday life.
With its calm, balanced, and peaceful lifestyle, retirees can enjoy the long lunches, seaside walks, and community-centered living, which replaces the urgency of a fast-paced environment in the US. This sense of tranquility is deeply rooted in Portugal, which is rich in picturesque landscapes. Retirees can spend their days enjoying coastal promenades, viewing historic towns, or taking in ocean views. Beyond its scenery, Portugal offers enriching activities suitable for retirees, such as golf, cultural festivals, local markets, or café culture. Its mild climate also encourages an outdoor lifestyle year-round, supporting both physical well-being and mental clarity.
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World-Class Healthcare at Affordable Cost
The public health services is one of the main attractive points that are pushing Americans to choose Portugal for retirement. The country offers comprehensive healthcare coverage once registered as a resident. Portugal was ranked 23rd in the 2024 Health Care Index[4], well ahead of the US, which was ranked 40th. The country has a hybrid healthcare system that combines high-quality public and private services that are also low compared to the US. Private health insurance is notably affordable when compared to the US, making it an attractive option for retirees.
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Tax Treaty Benefits
Choosing Portugal for retirement offers attractive tax benefits for new residents, making it a top choice for retirees. The US-Portugal tax treaty[5], or the existing tax treaty, prevents double taxation by outlining primary taxing rights for various income types, such as pension distributions, and enabling foreign tax credits. However, pension distribution may be subject to different tax treatments depending on its source and residency status. Therefore, proper planning can help optimize retirement income across both jurisdictions.
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Strong Expat Community
The strong American expat community is one of the key attractions of Portugal. The steady growth in the network of American retirees who choose Portugal for retirement and investors settling across the country creates a support system that makes integration and forming social connections easier. Therefore, newcomers can feel at home and at the same time enjoy the culturally rich environment.
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Safety and Stability
Portugal is ranked as one of the world’s safest countries, with lower violent crime rates than the US. According to the Global Peace Index[6] 2025, published by the Institute for Economics and Peace (IEP), Portugal ranks 7th globally, while the US ranks 128th out of 163 countries.
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Forced Heirship System
The Portuguese inheritance law[7] enforces a forced heirship system to protect spouses, descendants, and ascendants, allocating shares of the deceased’s estate ranging from one-third to two-thirds. This means that portion dedicated to the legitimate heirs is reserved by law.
One of the vital aspects of inheritance tax in Portugal is the exemptions provided for direct family members, including spouse, biological and adopted children, descendants of children, and ascendants. If the beneficiary of an inheritance or gift is not one of these close relatives, then a 10% stamp duty applies.
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Access to Europe
Another attractive aspect for American retirees residing in Portugal is the ability to access the EU and enjoy freedom of movement across its member states. This maximized mobility enables retirees to experience different cultures, explore diverse lifestyles, and visit the nearby countries with affordable prices using low-cost flights, trains, and short gateways.
These factors combined make Portugal a well-rounded and strategic retirement destination for Americans.
If you are planning to retire in Portugal as an American, there are several key factors you should take into consideration to ensure a smooth relocation and long-term settlement.
Residency Pathway
One of the most common options is the Golden Visa program, typically through qualifying investment funds starting from around €500,000. This route is popular among non-EU retirees due to its flexibility and minimal stay requirements compared to other visa types.
NIF and Banking Setup
Obtaining a Portuguese tax number (NIF) is one of the first administrative steps required for almost everything in Portugal, including contracts, utilities, and financial transactions. A local bank account is also necessary to manage funds, demonstrate financial capacity, and support residency processing.
In most Golden Visa applications, the NIF and bank account are typically arranged early and often facilitated alongside the application process, helping streamline financial setup before or during submission.
Residency Approval and Legal Stay
Once your application is approved, you are granted a temporary residence permit, allowing you to legally live in Portugal and travel within the Schengen Area while maintaining your residency status.
Healthcare Access
After becoming a legal resident, you gain access to Portugal’s public healthcare system (SNS), which provides affordable care including primary consultations, hospital services, and prescriptions. Many retirees also choose private health insurance for faster access and broader coverage depending on personal preference.
Tax Residency Considerations
Becoming a resident in Portugal may also make you subject to Portuguese tax residency rules, meaning your global income could fall under local taxation depending on your stay duration and structure of income. Proper planning at this stage is essential.
Residency Renewal and Long-Term Path
Residency permits require periodic renewal, and over time, this pathway can lead to permanent residency or citizenship eligibility, depending on the route chosen and compliance with residency requirements.
US expats usually choose Lisbon, Porto, or the Algarve, but the most suitable places depend on their budget and lifestyle priorities. If retirees want affordability and calm places, they can choose Braga, which is known for its affordable rents, family-friendly environment, and limited nightlife. The Silver Coast, the colorful canals of Aveiro, and the gentle waters of São Martinho do Porto provide more affordable living.
If they want retirement by the sea, they can choose the Algarve, which is known for seasonal crowds, sunny days, exclusive golf resorts, and retirement villages. The eastern towns of Tavira and Castro Marim are quieter alternatives. If they want an island lifestyle and nature, they can choose Madeira, which is known for its scenic appeal.
High quality of life and luxury real estate developments in Melides are attracting American celebrities like George Clooney and Sharon Stone to this emerging coastal paradise.
For more information about the Portugal Golden Visa, please contact us.
[1] https://www.theportugalnews.com/news/2025-04-08/americans-choosing-portugal/96733
[2] https://www.ssa.gov/policy/docs/statcomps/supplement/2025/supplement25.pdf
[3] https://www.numbeo.com/cost-of-living/compare_countries_result.jsp?country1=United+States&country2=Portugal
[4] https://www.numbeo.com/health-care/rankings_by_country.jsp
[5] https://www.irs.gov/pub/irs-trty/portugal.pdf
[6] https://www.visionofhumanity.org/wp-content/uploads/2025/06/Global-Peace-Index-2025-web.pdf
[7] https://www.ibanet.org/document?id=estate-planning-guides-Portugal-Sept-23