Retire in Spain or Portugal? Where to Live Better, Richer, Freer

A lot of our clients ask the same question: Spain or Portugal for my retirement?

I left the United States almost ten years ago, I’ve lived in both countries, helped clients get residency in both, and navigated the bureaucracy in both. 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 – 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:

Breaking Down Spain

Okay I’ll be honest, I love Spain. But there’s a single reason why I don’t live here permanently. We’ll talk about this in a second. First, the Pros:

The Pros of Retiring to Spain

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 or the Mediterranean coast on $2,500-$3,000 per month. And I’m not talking about eating ramen noodles and living in a shoebox. 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 (appetizer, main course, dessert, bread, and wine) for $15. In the US, that same healthy meal would cost you $40 or $50 easily. 

The healthcare system is pretty good too. Spain ranks 7th in the world for healthcare quality. That’s way better than the US, which ranks 37th. You know very well the issues with American healthcare, so I won’t go into those. Our clients pay about $100-$250 per month for private insurance that covers everything. Compare that to the $1,000-$1,500 most Americans pay for insurance that 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 to 5 PM for siesta, which can be frustrating (don’t get me wrong). But they understand that rest, socialization, and family 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 city in Spain, spent two hours every morning at the local café, 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 top-notch. You can get anywhere in the country via train in a matter of 2-3 hours thanks to their high-speed rail system. Cities are very walkable because they were designed for humans way back when cars didn’t exist. And safety-wise, Spain is one of the most secure countries in Europe. Gun violence is almost 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. 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 in specific countries; and FAQ sessions with our team of expat experts. If you’re interested, click on the link below and let us know.

How to Move to Spain

Now, how do you actually move to Spain legally? That is the question. Honestly, Spain does not have the widest array of immigration options, especially after closing their Golden Visa program earlier this year.

The most popular remaining option is the Non-Lucrative Visa, which is essentially the Spanish “retirement visa.” You need to show about $32,000 in savings (and you can combine accounts to meet the criteria). 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 with this visa, but if you’re retired, who cares? After five years, you can apply for permanent residency.

Now, if you’re still have active income or want to work remotely while in Spain? Spain has a Digital Nomad Visa too. You need about $2,500 per month in income, but the neat part about the DNV 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 few years and might mean that with the US-Spain double tax treaty, you don’t owe much in taxes in Spain at all.

Lastly and worth noting is the power of your US passport. Americans can visit Spain for 90 days every 180-day 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 2 years. For everyone else, it’s a long wait, but you get an incredibly powerful EU passport – perhaps the world’s most powerful – at the end.

The Cons of Retiring to Spain

Okay, now for the stuff that drives people crazy about Spain. And trust me, there are some big problems.

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, Spain 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 doesn’t 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. Let’s keep going:

Second con: Spanish Kafkaesque bureaucracy is absolutely insane. Simple things take forever. Getting your residency card can take 6 months. With the Freedom Files, it’s far less. Opening a bank account requires 47 different documents (I’m exaggerating). And Government offices have their own concept of time.

One of our clients spent 8 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 Ferrari pit crew.

Customer service is also… different. In the US, we’re used to “the customer is always right.” In Spain, it’s more like “the customer will wait patiently while I finish my conversation with my friend.” It’s not rude. It’s just a different culture. But it can be 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. If you have any further questions, check them out in our free How to Retire to Spain guide or drop them in the comments below. 

On to Portugal, Spain’s lovely Iberian neighbor and one of the hottest expat destinations worldwide:

Breaking Down Portugal

Here’s what most people don’t realize and I hate to burst your bubble if you were looking for a clear choice between these countries: Portugal isn’t 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-4 year backlog. So why do I still recommend it for certain people? Let’s dive in:

The Pros of Retiring to Portugal

Portugal is still one of the most affordable places to live in Western Europe, relatively equal with Spain actually depending on the cities and goods you’re comparing. A couple can live comfortably in cities like Porto or even parts of Lisbon on $2,500 to $3,500 per month. And if you’re willing to live in smaller towns in the Algarve, on Madeira or the Azores, or in central Portugal, you can get that down to $2,000 per month easily.

But here’s what really impresses me about Portugal: The quality of life is incredible. Portugal has this California-like climate – mild winters, warm summers, and sunshine almost year-round (even more so than Spain’s coast). You can walk around Cascais (Cash-kise) with a light jacket while your friends back home deal with snow and ice. See what I did there? 

The healthcare 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 Lisbon and Porto. In fact, English proficiency in Portugal’s tourist centers like Lisbon is exceptionally high.

Safety is another huge win. Portugal is ranked the 7th safest country in the world – in my opinion even safer than Spain. You can walk around Lisbon at 2AM and feel completely safe. Any crime is petty theft 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 for 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. 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. You can’t do that from Kansas.

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 retirees 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. If you’re married, it’s about $1,500 for both of you.

The D7 is renewable every two years, and after five 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. That’s huge by the way. An passport in the European Union in just five years versus Spain’s 10 years. 

If you’re still earning active income, the D8 Digital Nomad Visa requires about $3,500 per month, 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 investment – either €500,000 in approved investment funds or a €250,000 donation in cultural or art projects. But the best part about the Golden Visa is that it requires you to spend only 7 days per year in Portugal to maintain it. Seven days. You can live anywhere else, not pay taxes in Portugal because you’re not a tax resident, and still get Portuguese citizenship in five 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 traveling around the world. 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.

The Cons of Retiring to Portugal

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. Eliminated in 2024. There’s a replacement called the IFICI or affectionately NHR 2.0, but it’s much more limited in scope and your income probably wouldn’t qualify. 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. Maybe worse in some areas. Getting your Golden Visa residency approval can take years – even the D7 and D8 visas processes are dragging out.

Banking can be a 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 fast. A decade or two ago, all of Portugal was significantly cheaper than the rest of 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. The days of finding amazing apartments for €800 per month are mostly over in tourist centers in Portugal.

Infrastructure outside major cities can be lacking too. Rural internet are spotty and unreliable at times. And that’s not to mention the service and work culture in Portugal. If you thought the Spaniards relaxed, boy – I’ll put it this way: The Portuguese are not generally motivated by money.

My Experience and Opinion

Choose Portugal if your main goal is EU citizenship. Five years to a Portuguese passport versus 10 years for 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.

If you have the money and want maximum flexibility, Portugal’s Golden Visa is still incredible despite the backlog. You get EU citizenship in five years while only spending 7 days per year in Portugal. You can live anywhere else, avoid Portuguese taxes entirely, and still get that EU passport. It’s like having your cake and eating it too.

Choose Spain if you want the best quality of life in Europe and don’t care about fast citizenship. Spain simply does daily life better. The food culture, the infrastructure, the healthcare system, the work-life balance – it’s hard to beat. Yes, you’ll pay higher taxes and deal with bureaucracy. But if you want to actually enjoy retirement in a place that knows how to live well, Spain wins.

Here’s the thing most people don’t think about: You don’t have to choose forever. Get Portuguese citizenship first with the 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 five-year citizenship timeline. In an uncertain world, having a second passport – especially an EU one – is incredibly valuable.

The bottom line: 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 healthcare costs or watching yourself deteriorate because of political polarization and a breaking social contract.

If you want help figuring out which path makes sense for your specific situation outside of these 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 5 steps to retiring abroad and avoiding all the mistakes so many expats make in the process. Pay special attention to Step #4 if I might add.