Retiring in Portugal drastically reduces costs

Kyle M., a 54-year-old retired in-house counsel for a technology company, and his wife have found that retiring in Portugal has allowed them to significantly reduce their living expenses while enjoying a high quality of life. They first visited Portugal in September 2023 and have since bought a home there and are applying for permanent residency. “It is shockingly difficult to come back to the U.S. pricewise,” Kyle said. “It’s staggering how expensive things are here.” For 2025, Kyle and his wife have budgeted $181,000 in expenses for everything, including travel to and from the U.S., living costs, and some expenses for their young adult daughters. One of the biggest changes to their budget has been healthcare. In the U.S., they were budgeting around $4,000 a month for healthcare for a family of four, including health insurance at about $2,800 a month, plus copays and deductibles. On Portugal’s public health system, that cost is around $3,250 Euros (approximately $3,347 USD) for himself and his wife for the year, plus an additional $1,000 per month for one of their daughters. That’s a shift from around $50,000 per year to more like $15,000 per year. They were able to purchase their home in Portugal by selling a property in the U.S., but they still have mortgage payments they mostly break even on with two income-generating rental properties. Property taxes in Portugal are significantly lower. Since Kyle and his wife are both retired, they no longer have commuting costs.

retiring abroad reduces living expenses

Their monthly budget for gas and transportation has gone down from about $300 per month, or $3,600 per year, to around $600 per year. Kyle budgets $800 a month for groceries and $750 a month for dining out. They don’t typically have trouble staying under this budget. Dining out is significantly cheaper in Portugal, and this includes things like ordering fresh fish and “a good bottle of wine.” Travel is important to Kyle and his wife, not only for recreation but because their two daughters and other family members still reside in the U.S. They budget $1,500 a month for travel and another $750 per month for entertainment and recreation. Electricity and other utilities are also significantly cheaper in Portugal. Kyle said their electricity, water, and garbage come to about $100 per month total. Homeowner’s insurance is around $500 for the year, and for that, the insurance company would pay for a total rebuild of their home if they suffered a complete loss. Other expenses, such as those related to veterinary care for their dog, are also significantly lower in Portugal. A recent house call with an exam and vaccinations was under $100. Things may change in their budget when they become Medicare eligible in about 10 years. At that time, they may also begin drawing on Social Security, which could change some of their expenses. Kyle said they’ll deal with that and rebalance their budget when the time comes.