Portugal continues to be at the top of best-places-to-retire-abroad lists. This got my attention when I retired in 2019 as a solo midlife woman of 59. I was intrigued by the thought of lowering my living expenses and the possibility of being able to afford to live on the ocean as a single retiree. The month I spent living in Portugal in 2019 convinced me it was the country for me to move to in retirement. After returning home, I planned to save money and move to Portugal at 65. But when my house sold unexpectedly in late 2021, I realized I could move three years ahead of plan. I’ve been living in Portugal since October 1, 2022, and will continue to share Midlife Expat Learning posts here periodically as I navigate the complex process of immigrating to Portugal.

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April is tax season in the U.S. (Monday of this week was the filing deadline) and Portugal (the deadline for filing is from April 1 until June 30). As such, I thought a brief look at tax and money-related information would be helpful to current and future expats in Portugal. Online links to resources are included at the end.

Please note that I am not an expert on any of this. All information presented here is based solely on my understanding from doing research and talking to tax accountants. I am not qualified to answer tax and financial questions. I’m just sharing my understanding of information and resources that I have found helpful.

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Taxes

• If you’re a U.S. citizen living in Portugal, you still have to file a tax return with the IRS in the U.S.
• You are considered a tax resident in Portugal when you have a Portuguese address attached to your NIF (fiscal number). Tax residents are required to file tax returns in Portugal.
• Expats who applied for and received NHR status from Portugal’s tax authority benefit from lower taxation rates for a period of 10 years. NHR is not renewable for successive 10-year periods. After 10 years, you will pay standard Portugal tax rates, which can be as high as 48 percent.
• Expat retiree pensions are currently taxed in Portugal at 10 percent. The first 4,104 euros are exempt.
• U.S. Social Security payments are considered a pension and are taxed in Portugal, even if they are not taxable in the U.S.
• Portugal does not tax government pensions. Public school teacher retirement funds are considered government pensions.
• Portugal and the U.S. have a double-taxation treaty. Taxes you pay in Portugal can be applied as a credit on your U.S. tax return.

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Bank Reporting

If you are a U.S. citizen with $10,000 or more in a foreign bank account, you must submit an FBAR form online with the U.S. government. The form is due the same day as your U.S. tax return, but it’s not submitted to the IRS, and the deadline is automatically extended to October without having to apply for an extension. There’s a $10,000 fine for willfully failing to submit your FBAR. For folks who were supposed to submit an FBAR but didn’t know they had to, there’s a specific procedure to follow so you don’t get fined.

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Personal Expenses and Budget

I get a lot of questions about the cost of living as an American solo midlife retiree here in Portugal, so I thought I’d share my budget and first-quarter expenses for 2024.

My monthly budget for “essentials” is 2,000 euros ($2,176 usd). Essentials include healthcare/insurance; rent; mobile phone plan for U.S. number; Portugal plan for phone/Internet/TV/landline; piped gas; electricity; municipal water; groceries; dining out; local transportation (I don’t have a car here); clothing; housewares; personal care; subscription services; Portugal bank fees.

My monthly budget for travel is 766 euros ($833 usd or $10,000/year).

For the period of January 1-March 31, 2024, my average monthly spending, including travel, was under budget at 2,479 euros ($2,698 usd). This average includes my solo travel expenses in the United Arab Emirates for my birthday, but does not include the roundtrip Emirates Air business class flight from Lisbon, which I paid for in 2023.

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Resources

E-Portugal official government services site

Portugal tax authority site

IRS tax treaties

FBAR requirements and form

Late-submission procedure for expats after failing to file FBAR and/or taxes in the U.S.

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Stay Tuned

Moving to another country is a complex process, and information can change quickly without notice. Everyone’s experience can be different. I’m remembering to take it all in stride, stay flexible, prepared, pivot-ready, and positive. Stay tuned.

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2023 Midlife Expat Learning Posts

January/February: SEF immigration appointment

March/April: SEF immigration troubleshooting

May/June: Language classes

July/August: Healthcare

September/October: Moving personal belongings one year later

November/December: Turning a furnished rental into a home

2022 Midlife Expat Learning Posts

February: Residency visa requirements

March: Finding housing in Portugal

April: Taxes & money in Portugal

May: World Portuguese Language Day

June: Healthcare in Portugal (postponed). See Cutting expenses to move abroad

July: Voting as an expat

August: Visa application timeline and expenses

September/October: Moving, meeting folks, making friends

November/December: Food, shopping, and Christmas in Portugal

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Thank you for reading!❤️ May your weekend be filled with simple, free pleasures.

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The Hot Goddess

Instagram: retired_rewired_inspired

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