In 2011, at 41- years-old, I retired early from my six-figure profession in law. My partner joined me in retirement 4 years later on after stopping her task as a nurse.
By the time she retired in 2015, our portfolio of high-yielding stocks and shared funds paid approximately $130,000 a year in dividends, which covered the majority of our living costs in Washington, D.C.
That year, we took a household getaway to Lisbon, Portugal with our child, who is now 16 years of ages. We instantly fell for the city.
That’s when it struck us: Why not leave the U.S. and invest our retirement life in Lisbon?
Without squandering at any time, our household of 3 loaded up our personal belongings and scheduled one-way tickets toPortugal The strategy was to rent our home in the U.S., cut our living costs while residing in Lisbon, then reinvest those cost savings into more dividend-paying stocks to intensify our passive earnings.
The Miradouro de São Pedro de Alc ântara is an ideal area to appreciate Lisbon at sunset. Alex Trias and his household purchased an apartment or condo in the city for a little over EUR500,000 in 2015.
Photo: Alex Trias
We’ve been living here for about 6 years now, and we’re no place near all set to leave. Here’s just how much we invest each month– and why we enjoy residing in Portugal:
1. Living costs are much lower than in the U.S.
Portugal is thought about among the most affordable nations to reside in Western Europe.
On average, compared to life back in the U.S., we have actually cut our costs by 50%. We’re lucky to own our two-bedroom, one-bathroom, 1,300- square-foot home, which we bought in 2015 for a little over EUR500,000 without any home mortgage.
Our preferred Portuguese deal: Multiple bags of fresh vegetables and fruits. A warm loaf of bread from Gleba Bakery– made with its really own homegrown treasure wheat– expenses just $ 4, and deserves every cent.
Portugal is well-known for its scrumptious seafood, and you can discover a few of the best at the Mercado de Campo deOurique If you do not seem like cooking, numerous of the dining establishment cubicles at the Mercado choose their seafood materials from the fish counter.
Photo: Alex Trias
One of our greatest regular monthly costs is eating in restaurants at dining establishments. A normal lunch at the Mercado de Campo de Ourique, a premium grocery store, can run about $16 per individual. A glass of white wine costs an additional $4.
Here’s a breakdown of our regular monthly costs:
- Health insurance coverage (for the whole household): $258
- Groceries: $407
- Basic family basics: $250
- Transportation (gas, vehicle insurance coverage, mass transit): $250
- Housing (real estate tax, insurance coverage, upkeep): $430
- Water and electrical energy: $175
- Phone and web: $80
- Eating out (10 to 12 meals each month): $600
Total: $2,450
2. A really generous tax system
European taxes tend to be really high, however unlike nations like France and Italy, Portugal does not enforce wealth, inheritance or estate taxes (although there is a 10% “stamp duty” on Portuguese properties that are acquired or talented beyond the direct household).
As an expat, you are thought about a Portuguese taxpayer if you live more than 183 days in a single fiscal year in Portugal or, based on specific conditions, if you have a long-term home readily available for your individual usage in Portugal.
And thanks to the non-habitual resident tax routine, immigrants can gain from a tax exemption (or a decreased tax rate) on the majority of foreign source earnings for 10 years.
As U.S. residents, we are constantly responsible for U.S. earnings taxes, however we minimize state and regional earnings taxes. Plus, our real estate tax costs in Portugal is a portion of what we paid in the U.S.
3. Low- expense, premium health care
In addition to Portugal’s nationwide health services protection, which provides subsidized or complimentary health services to all legal locals of Portugal, my household’s personal medical insurance through Multicare is detailed and cost effective.
Our premium is $258 each month, however our strategy has a $0 deductible and $16 co-pays for physician sees at a personal healthcare facility. I as soon as had an over night emergency clinic go to that included several tests and assessments; the whole expense was covered by our insurance coverage, and I paid absolutely nothing besides my co-pay.
Prescription drug costs likewise tend to be significantly lower in Portugal than in the U.S. One generic prescription that would normally cost me $600 a month back house is just $21 in Portugal– for the trademark name medication.
4. Low criminal offense rates
Portugal is the 4th most safe nation on the planet, according to the 2021 Global Peace Index, which thinks about terrorism, violent criminal offense and political instability, to name a few aspects, in its approach.
And the Portugal News reported that 2020 had the most affordable criminal offense rates in Portugal given that the nation began reporting its criminal offense information in 1989.
Beyond the stats, my household and I feel really safe in every part of Lisbon at essentially all hours. Locals even declare tables at the Mercado by leaving their bags ignored on a chair while they go food shopping.
You can purchase fresh fruit and vegetables or get lunch at the Mercado de Campo deOurique The market is significantly safe, with consumers leaving their bags at their tables as they go food shopping.
Photo: Alex Trias
When we initially moved here, my partner discovered there is no “cat calling,” and she has actually never ever felt bugged strolling down the street. The Portuguese tend to reward excellent manners. “Bem educado” indicates “polite” in Portuguese, which comes as really full marks.
That stated, pickpocketing is a real danger in overloaded traveler locations, so we’re constantly on guard when we ride the cable car.
5. Consistently enjoyable weather condition
Temperatures in Lisbon variety from a typical high of 82 degrees Fahrenheit in July to a typical low of 47 degrees Fahrenheit in January, which compares positively to the blistering heat and stacks of snow common in Washington, D.C.
Guincho Beach, situated about 25 minutes by vehicle beyond Lisbon, forms part of the Sintra National Park.
Photo: Alex Trias
In Lisbon, we seldom utilize an a/c unit in the summertime. The thick stone of our home walls assist moderate temperature level inside. And we never ever trouble with hats or gloves in the winter season.
6. Getting off the hamster wheel
Living abroad has actually entirely altered our outlook and top priorities in life. We considerably structured our personal belongings when we transferred toPortugal We now focus even more on how we invest our time.
I attempt to construct downtime into my day and invest a great deal of time in nature. Some of my happiest minutes are when I am strolling along the seaside at Guincho Beach or treking through eucalyptus forests in the hills of Sintra and Colares.
I likewise take every chance to take a trip with my household. Backpacking through Europe is our child’s preferred aspect of residing inPortugal She treasures every minute, whether she’s going to a mathematics competitors in Geneva or taking a household drive to Seville for the weekend.
Alex Trias is a retired lawyer. He and his partner and child have actually been residing in Portugal given that2015 He is the author of the “Investment Pancake” series on SeekingAlpha.com and has actually released almost 500 posts about tax preparation, investing, early retirement, and where to discover the very best meals in Lisbon.
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