Retirement in Portugal or Spain? (I Tested Both)

A lot of our clients ask the same question, Spain or Portugal for my retirement. I left the United States almost 10 years ago. I've lived in both countries. I've helped clients get residency in both and navigated the bureaucracy in both as well. So, I decided to settle this once and for all. After living this comparison firsthand, there's a clear winner depending on what you want from retirement abroad, and it might surprise you. So, in this video, I'll cover what makes Spain and Portugal special, how you can move to each country, and which is best for you based on your goals overseas. Let's start with Spain. Okay, I'll be honest. I love Spain, but there's a single reason why I don't live there permanently right now. We'll talk about this in a second, but first, the pros. Spain is cheap. Like, really cheap in some parts of the country compared to the US. A couple can live really well in small Spanish towns on the Mediterranean coast for $3,000 a month. And I'm not talking about eating ramen noodles and living in a shoe box. I'm talking about going out to dinner twice a week, buying fresh seafood at the market, and drinking wine that costs $3 but tastes like it should cost 100. Here's what shocked me. It's relatively easy to find three course meals. I'm talking like appetizer, main course, dessert, bread and wine for 15 bucks. In the US, that same healthy meal would cost you 40 or 50 easily. The health care system is pretty good, too. Spain ranks seventh in the world for health care quality. That's way better than the US, which ranks 37th. And you know very well the issues with American healthcare, so I won't go into those. Our clients in Spain pay about a hundred to 250 bucks a month for private insurance as well that covers everything. And compare that to the a,000 or $1,500. Most Americans pay for insurance that again barely covers anything. But the real magic in Spain isn't the food or the healthcare. It's the lifestyle in my opinion. The Spaniards have figured out something we Americans completely lost a century ago. How to actually enjoy life. Shops close from 2:00 to 5:00 p.m. for a siesta, which can be very frustrating, don't get me wrong. But they understand that rest, socialization, and family really matter. Long lunches with friends aren't rushed affairs. They last for hours because relationships matter more than being busy. The last time I visited Spain in March, our neighbor in Madrid, which is probably the most pro business, most modern city in the country, spent 2 hours every morning at the local cafe reading the paper and chatting with friends. In the US, we'd call that unproductive. In Spain, that's just life. On another note, Spain gets over 300 days of sunshine per year. The infrastructure is topnotch. You can get anywhere in the country via train in a matter of two to three hours thanks to the high-speed rail system. Cities are very walkable because they were designed for humans way back when cars didn't even exist. And safety wise, Spain is one of the most secure countries in Europe. Gun violence is non-existent. Most crime is just pickpockets in tourist areas. But increased illegal immigration is causing a ruckus and some social polarization, especially in southern Spain near North Africa. The expat community is huge, too. Over 41,000 Americans live in Spain, so you'll never feel alone if you don't want to be. In cities like Madrid and Barcelona, you'll find American clubs, English-speaking doctors, and people who understand what you're going through, which is really important when you move to a new country. Trust me, I know. And by the way, we're launching an online community, not a Facebook group for US expats aspiring to move abroad. And for those already living abroad, you'll have special insider access to our team for questions, country and visa, deep dive webinars, exclusive information, products and discounts, spaces for expats and specific countries, and FAQ sessions with our team of expat experts. If you're interested, you can click on the link below and let us know. All right. Now, how do you actually move to Spain legally? That is the question. Honestly, Spain does not have the largest array of immigration options, especially after closing their Golden Visa program earlier this year. The most popular remaining option, especially for retirees, is the non-lucrative visa, which is essentially their retirement visa. You need to show about $32,000 in savings, and you can combine accounts to meet the criteria if you need to. If you're married, it's about $50,000 for both of you. That's it. No huge investment required like some countries demand. The authorities simply want to know that you can support yourself while living in the country and that you won't become a burden on their social safety net. This visa is perfect if you're getting social security, if you have a pension, or if you live off investment income. You can't work in Spain on this visa, but if you're retired, who cares? After 5 years, you can apply for permanent residency. Now, if you still have active income or want to work remotely while in Spain, Spain does have a digital nomad visa, too. You need about $2,500 per month in income. But the neat part about this digital nomad visa is that it might also qualify you for something called the Beckham law. It's a special tax regime that can cut your Spanish taxes way down to about 24% for the first five, six years. and might mean that with the US Spain double tax treaty, you don't owe much in taxes in Spain at all. And we'll talk about taxes again in just a second. Lastly, and worth noting is the power of your US passport if you're American. Americans can visit Spain for 90 days every 180day period without any visa at all. So, you can try it out before committing. The path to full citizenship takes 10 years for most people, but there's a shortcut. If you're a citizen of a former colony like Mexico, Colombia, or the Philippines, it's only two years. For everyone else, it's a long wait, but you can get an incredibly powerful passport in the EU. Perhaps one of the world's most powerful at the end. Okay, now for the stuff that drives people crazy about Spain. And again, I've lived here enough to recognize these cons. First, taxes. The reason I personally don't live in Spain and instead enjoy its fruits as a tourist rather than a resident. If you live in Spain for more than 183 days a year, and sometimes less if you have significant ties to Spain, the government will tax you on all your worldwide income at rates up to 47%. In some provinces, it can hit 52%. Yes, there's a tax treaty with the US, so you don't get double taxed on the same money, but most Americans would still pay a lot more taxes in Spain than they might expect. Most of our clients actually end up pivoting away from Spain because of this fact. The math for many people just does not add up when there are so many other great destinations overseas. But tax savings isn't the main goal for everyone. And if you're cutting your cost of living substantially, sometimes your savings can offset taxes a bit. So, let's keep going. Second con, Spanish CFKA-esque bureaucracy is absolutely insane. Simple things take forever. Getting your residency card can take 6 months. With the Freedom Files, it's far less. But opening a bank account requires 47 different documents. I'm exaggerating slightly. And government offices have their own concept of time. One of our clients spent eight months trying to get his driver's license transferred. Eight months to transfer a license. The Spanish government can make even the most bureaucratic American DMV look like a damn Ferrari pit crew. Customer service is also different. In the US, we're used to the customers always right. Right. In Spain, it's more like the customer will wait patiently while I finish my conversation with a friend. It's not rude. It's just a different culture. But it can be very frustrating if you're used to American style treatment and service. All right, that's about all I have to say about Spain before I share my recommendations later in the video and you want to stay for that. If you have any further questions about Spain, check them out in our free how to retire to Spain guide or you can drop them in the comments below and I'll respond. On to Portugal, Spain's lovely Iberian neighbor and one of the hottest expat destinations worldwide. Here's what most people don't realize, and I hate to burst your bubble if you're looking for a clear choice between these countries. Portugal is not what it used to be. The golden days of the NHR tax program are over. The Golden Visa is less attractive thanks to an almost four-year backlog. So, why do I still recommend it for certain people? Let's dive in. All right. Portugal is still one of the most affordable places to live in Western Europe. Not all of Europe, but Western Europe. Relatively equal with Spain, actually, depending on the cities and goods that you're comparing. A couple can live comfortably in cities like Porto or even parts of Leisboa on $3,3500 a month. And if you're willing to live in smaller towns in the Algarve or Amadera or the Azores or in central Portugal, you can get that down to $2,000 per month easily. But here's what's really impressive about Portugal. The quality of life is incredible. Portugal has this Californiike climate, mild winters, warm summers, and sunshine almost year round. Even more so than Spain's coast, actually. You can walk around Koskais with a a light jacket while your friends back home deal with snow and ice. The healthare system is good, too. Portugal ranks 12th globally for healthcare quality, just behind Spain. Our clients typically pay $500 to $1,000 per year for comprehensive private insurance. Compare that to what you're paying in the US right now. Plus, many doctors speak English, especially in these po and Porto. In fact, English proficiency in Portugal's tourist centers. This surprised me. Like Lisbon is exceptionally high. Safety is another huge win. Portugal is ranked the seventh safest country in the world. In my opinion, even safer than Spain. You can walk around Lisbon at 2:00 a.m. and feel completely safe. Any crime is mostly petty theft in in tourist areas. But the real magic is how welcoming Portugal is to foreigners. Over 14,000 Americans already live there. And I think this is an underestimation. The government has been great in the past two decades at actively designing programs and welcoming foreign entrepreneurs, capital investors, and expats. Lastly, Portugal is perfectly positioned. You can fly directly from the American East Coast to Lisbon in a little over 6 hours. If you want to explore Europe, you're just a short, cheap flight from anywhere. One of our clients took 25 short and long trips around Europe in her first two years living in Portugal on the Golden Visa. Can't do that from Kansas. So, how to move to Portugal? Portugal offers Americans several pathways to move to the country, and honestly, they're pretty generous compared to most European countries. The most popular option for our retirey clients is the D7 retirement visa. You need to show about $1,000 per month in passive income, which is one of the lowest thresholds in Europe and significantly lower than Spain's non-lucrative visa requirements. You can qualify with proof of social security, pensions, investment income, whatever. And if you're married, it's about $1,500 for both of you. The D7 is renewable every 2 years, and after 5 years of tax residency, yes, the D7 visa requires you to live there at least 6 months a year to maintain your status. You can apply for Portuguese citizenship after that period. That's huge, by the way. A passport in the European Union in just 5 years versus Spain's 10 years. If you're still earning active income, Portugal also has the D8 digital nomad visa, which requires about $3500 per month in income, but it gives you more flexibility if you want to work and earn while living in Portugal. Now, here's where Portugal gets interesting. The Golden Visa program. Yes, it requires an investment either €500,000 and approved investment funds in the country or a €250,000 donation in cultural or art projects in the country as well. But the best part about this golden visa is that it requires you to spend only 7 days per year on average in Portugal to maintain it. 7 days. You can live anywhere else, not pay taxes in Portugal because you're not a tax resident, and still get Portuguese citizenship in just 5 years. This is perfect if you want citizenship in the European Union, but don't want to commit to living in Portugal full-time or paying taxes there quite yet. I mentioned in a previous video how one of our clients just received his golden visa residence permit after 41 months of waiting. That backlog is ferocious, but the Golden Visa and Portuguese citizenship is their plan B while continuing to travel around the world. So, the backlog wasn't a big deal. And another benefit is that your citizenship timeline begins when you submit your application, not when you're approved. So he and his wife are just a year away from the right to live, work, study, and get treatment, not only in Portugal, but throughout the 27 countries in the European Union. Pretty powerful, right? Okay, let me be honest about Portugal's downsides, because there are some big ones. First, the famous NHR tax program that made Portugal a tax haven. It's gone. It was eliminated in 2024. And there's a replacement called the IFIC or affectionately NHR 2.0, but it's much more limited in scope. And your income probably wouldn't qualify there. It's pretty limited. Portugal now taxes worldwide income at rates up to 48%. If you spend more than 183 days per year in the country and become a tax resident. Yes, there's a US Portugal double tax treaty and yes, there are some crypto tax benefits if you hold for more than a year, but Portugal is no longer the tax paradise it once was. Again, these tax rates often scare away expats interested in living in Portugal. The bureaucracy is almost as bad as Spain's as well, maybe worse in some areas. Getting your Golden Visa residency approval can take years. As I mentioned, even the D7 and D8 visas, the processes are dragging out. Banking can be an absolute nightmare. Portuguese banks are notorious for being difficult with foreigners. Even with proper documentation, opening an account can take weeks or months. And don't get me started on some of their online banking systems. They feel like they were designed in 1993. And Portugal's secret is out, which means prices have risen really fast. A decade or two ago, all of Portugal was significantly cheaper than the rest of Europe. Well, Western Europe. Now, Lisbon and Porto aren't the bargains they once were. Property prices have skyrocketed. Rent in central Lisbon can compare to major US cities, honestly. And the days of finding amazing apartments for €800 a month are mostly over in the touristy parts of Portugal. Infrastructure also outside of the major cities in Portugal can be lacking, too. Rural internet is spotty and unreliable at times. And that's not to mention the service and work culture in Portugal. If you thought the Spaniards were relaxed, boy, I'll put it this way. The the Portuguese are not generally motivated by money. All right. So, my experience and my opinion, generally, I'd say choose Portugal if your main goal is EU citizenship. Five years to a Portuguese passport versus 10 years for the Spanish citizenship. That's a massive difference. And that EU passport opens up 27 countries where you can live, work, and retire. It's one of the most powerful passports in the world. And if you have the money and want maximum flexibility, the Portugal Golden Visa is still incredible. Despite the backlog, you get EU citizenship in 5 years while only having to spend 7 days per year in Portugal. You can live anywhere else, avoid Portuguese taxes entirely, and still get that passport. It's like having your cake and eating it, too. It's a really good deal. Now, choose Spain if you want the best quality of life in Europe and don't care about fast citizenship. Spain simply does life better. The food culture, the infrastructure, the health care system, the work life balance, it's honestly hard to beat. Yes, you'll pay higher taxes and deal with a lot of bureaucracy. But if you want to actually enjoy retirement in a place that knows how to live well, I think Spain wins. Here's the thing that most people don't think about, though. You don't have to choose forever. You can get Portuguese citizenship first with a golden visa, then move to Spain later if you want. That EU passport gives you options, but if I had to pick just one for most American retirees, Portugal edges out Spain because of that 5-year citizenship timeline. In an uncertain world, having a second passport, especially in EU one, is incredibly valuable. The bottom line here, Portugal for citizenship, Spain for lifestyle, both will give you a better retirement than staying in the US and watching your savings get eaten alive by inflation and high health care costs or watching yourself deteriorate because of political polarization and a fracturing social contract. If you want help figuring out which path makes sense for your specific situation outside of those two countries as well, that's exactly what our freedom consults are for and what our pride and joy is. In the video on your screen, we break down the five steps to retiring abroad and avoiding the mistakes so many expats make in the process. Pay special attention to step number four, if I might add.