Retire in Spain or Portugal (2021)

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The Iberian Peninsula is a dream destination for people from all around the world. For retirees looking to enjoy a laid-back pace of life in beautiful, affordable, historic countries, Spain and Portugal are great options.

When choosing to retire in Spain or Portugal, Portugal is the clear winner. Portugal offers safety, ease of residency requirements, accessibility for foreigners, and affordability. In addition, Portugal is listed as one of the top countries when it comes to friendliness.

In the rest of this article, we will look at different aspects of retiring in these two countries. We will see the diverging aspects in residence permits, accessibility, and taxes. We will also see a few of the top destinations of each of the two countries that retirees tend to love.

What Are the Benefits of Retiring in Spain and Portugal?

Both Spain and Portugal share many similarities, including culture, climate, and infrastructure. There are, however, some differences. Each country has its own benefits for retirees.

The benefits of retiring in Spain include a rich culture and more travel options within the country. Portugal, on the other hand, offers easier access to residency, accessibility to foreigners, friendly citizens, and is listed as the third safest country in the world.

Let’s take a more in-depth look at the benefits of retiring in one of these two countries.

Culture

If you are familiar with Spain and Portugal, you will know that these two European nations share many similarities that foreigners from all over the world are quite attracted to.

Spain and Portugal both embody a distinct way of life that many foreigners come to love and enjoy deeply. With cultures that emphasize family, community, meals together, and taking time to enjoy life, it’s no wonder that people come to these countries and never want to leave.

No matter if you love a delicious glass of wine, a mouth-watering meal, or a day at the beach, you can find it all in either Spain or Portugal. Southern Spain has the world-famous tapas culture while Portugal cuisine is known throughout the world.

Both countries have the reputation of being warm-blooded, friendly, Mediterranean countries. However, according to Internations, Portugal is at the top of the list when it comes to being friendly to foreigners. Foreigners who came to settle in Portugal reported that they truly felt welcomed and cared for by their new neighbors.

Additionally, many retirees are looking for a safe place to enjoy their time. According to the 2020 Global Peace Index, Portugal ranks 3rd in the safest countries in the world. Spain comes in at 38. While these are both very high in the list, meaning both countries are quite safe, Portugal clearly wins over Spain in this category.

Geography and Climate

The Iberian Peninsula has some great weather, particularly in the southern coastal regions. These regions are well regulated by their respective ocean or sea and don’t get too hot in the summer or cold in the winter.

Retirees usually head towards the southern destinations, as the north of each country can be a bit wetter, cloudier, and colder during some months. Southern spots tend to enjoy sunshine year-round and avoid any harsh winter weather that retirees tend to avoid.

When it comes to the two countries, there is no denying that Spain is significantly larger than Portugal. While this means Spain has more to offer geographically, it can also mean longer travel times when moving around within the country.

Just because Portugal is smaller does not mean that it is at a disadvantage. Portugal has great diversity as well– from coast to mountains, from villages to metropolises. You can change scenery quickly in this country since everything is quite close together. You can easily escape the big city life in a single day by visiting both the sea and the mountains.

Cost of Living

When it comes to the cost of living, both of these countries are more affordable than their Western European neighbors. However, even between the two countries, you will experience a distinct difference in living expenses.

In Portugal, the current minimum salary is approximately 740 euros per month. In Spain, it is 1,050 euros per month. The difference between these two salaries is quite big and can be easily felt when it comes to renting an apartment or paying for daily services.

For essential daily goods, the price difference is not so significant. When you go to the grocery store, the difference in prices will be subtle if noticeable at all. When comparing similar daily goods between the countries, you may notice slightly higher prices in Spain.

However, when you need to use essential services, you will find lower prices in Portugal. If you need to get a haircut, hire a dog walker, or use another daily service, you can expect to pay more in Spain than in Portugal.

Remember, big cities will always be the most expensive for each country respectively. Many people choose cities like Madrid, Barcelona, and Lisbon because of the job market. It can be easier to find suitable work in these large metropolises. However, this does not need to factor into a retiree’s decision for their new home.

Retirees have much more choice when it comes to where they will live. This demographic does not need a strong job market and can choose a smaller city with a lower cost of living. They may like to choose a smaller city closer to nature. With so much natural beauty in the Iberian Peninsula, retirees can easily choose a midsize coastal city or a small city near the mountains.

Infrastructure

Spain and Portugal are both developed countries with great infrastructure. You can find high-speed rail in both countries as well as well-designed public transportation systems in the cities.

The main cities in both countries are hubs for flights to many countries. You can find many direct flights to North and South America from the major airports in both Spain and Portugal. You can also find many budget flights to other European airports for travel and adventure within Europe.

There is no significant advantage one of these countries has over the other when it comes to infrastructure.

Residence Permits

If you are a citizen of a country within the European Union, it will be quite easy for you to retire in Spain or Portugal. When you arrive in the country, you simply need to register your stay.

However, retirees coming from non-EU countries will need to obtain the proper long-term residency permits if they wish to stay continuously in their country of choice.

It is possible to obtain permits in either country that would allow you to retire without needing to leave the country regularly. The process in Portugal is easier than in Spain, but it is possible in both.

Typically, it is possible to apply for your residency permit in Portugal entirely in English. This is simply not the case for Spain, which requires certified translations for many of the documents. Seeking out a certified translation for each document can make the process more complicated and expensive if you choose Spain over Portugal.

Because of how much more complicated the residency permit process can feel in Spain, many potential residents end up hiring outside help to get the job done. If you are trying to secure your paperwork on a budget, Portugal is the better option. You should be able to complete the process yourself without any outside assistance.

Another difference between the two processes is how much money you will need to show you have access to. While the numbers change each year and are dependent on your particular situation, Spain generally requires you to have more available funds than Portugal.

Finally, if you are thinking long-term, Portugal only requires you to live there as a resident for five years before applying for citizenship. The process is much longer and more complicated in Spain, on average taking around ten years.

For more on the residence permit comparison between these two countries, you can check out this review on Youtube:

Taxes

Another deciding factor for many retirees is the rate of taxation that they will face in their new home country.

In Portugal, you can be approved for a Non-Habitual Resident status (also known as NHR). This status is a tax incentive designed to attract foreigners to Portugal, and it works well for retirees.

The status works to make foreign income tax-free in Portugal. This means that income from various investments is not subject to taxation in Portugal. It still may be taxable in your home country, depending on what country you are from and their particular tax laws.

Language

In terms of language, there are a few things to consider. The first is how easy it is to learn the local language. The second aspect of language is the rate at which English is spoken. Let’s take a look at both categories for these countries.

If you are looking to learn the local language, luckily, both Spanish and Portuguese are Romance languages. Between the two, Spanish tends to be easier to learn than Portuguese. The pronunciation and grammar tend to be simpler, and people tend to get the hang of Spanish more quickly than Portuguese.

However, if you are looking for a country with more English-speaking locals, Portugal wins in this category. Additionally, a lot of written information will be available in English as well. When you need to open a bank account or complete other potentially intimidating tasks in a foreign country, it is usually easier to do in Portugal regarding foreigner-friendly accessibility.

This is also true when it comes to accessing the healthcare system in both countries. You are more likely to be met with English in the Portuguese healthcare system versus the Spanish one. This accessibility can be very advantageous in times of stress and crisis when clear communication is necessary.

Additionally, let’s take a look at the role of the Spanish in Spain. Depending on the region you live in, Spanish may not even be the most spoken language. In Catalonia, for example, Catalan is the mother tongue of many locals.

You will be able to communicate in Spanish, but if you are looking for a more immersive cultural experience, you may not have the same luck in Spanish as in the local language.

Where To Retire in Spain and Portugal

These countries have been popular with retirees for years, and there are some favorite places in both countries. However, the ultimate decision will come down to your personal preferences. Luckily, both countries have a range of offerings, from lazy coastal spots to bustling historic cities.

Spain

Being the larger country geographically, there is so much diversity within Spain when it comes to different regions. Retirees tend to prefer the Mediterranean regions for their weather, culture, and access to beaches. Let’s take a look at some favorite retiree destinations in Spain.

Malaga

Malaga, a tourist-friendly city, situated on Spain’s southern Mediterranean coast, is a popular destination for retirees. Tourists and retirees from England have long been frequenting this charming port city. This trend has helped develop the city in a way that is quite foreigner-friendly.

English is widely spoken in Malaga, and there are plenty of establishments that cater to the tastes of foreigners. It is popular for all kinds of foreigners, those looking for a warm vacation, a place to work remotely as well as a place to retire. With so many foreigners, it can be easy to build a community with like-minded people.

For those concerned about weather and climate, don’t worry. You can enjoy a very mild winter in Malaga. The city boasts 320 days of sunshine a year, and even in winter, the temperatures don’t drop much lower than 55°F (12.77°C). You can access beautiful beaches easily from the city and as well as enjoy the entertainment a mid-sized city has to offer.

The population of Malaga is just under 570,000, making it a much more comfortable environment for those looking to avoid big cities. However, this doesn’t mean Malaga is simply all beaches. There are still plenty of intricate historic buildings in the city’s old center to enjoy and many historical sites that will appeal to retired history buffs.

For fans of art and culture, there is a wide range of museums to see in Malaga. Since Malaga is the birthplace of world-famous artist Pablo Picasso, you can find more than one museum in the city celebrating his life and work.

Malaga is also close to other smaller beach towns as well as nearby mountain getaways. This city can be a great place to set up a home base and explore neighboring areas later on. It is also close to Northern Africa, making it possible to take a weekend trip to Morocco or another exciting destination.

Alicante

Located on Spain’s eastern Mediterranean shores, Alicante is another popular destination for foreigners. It is slightly smaller than Malaga, with a population under 350,000. This city is a popular summer destination for Spaniards as they attempt to flee the heat of inland Spain.

The coast helps regulate the temperature and makes the hot summer months much more comfortable.

It is a very walkable, accessible city and is home to many foreigners from around the world who have chosen to live here long term. With a significant expat population, you can find many services here in English and can easily bump into other English speakers in the city.

Alicante has a reputation for being a party place with plenty of late-night bars and clubs for people looking to have a good time. However, the city is not all about the parties. There are plenty of historical sites and cultural offerings. Plus, the beaches are absolutely stunning.

Valencia

If you keep going north along Spain’s eastern shores, you will reach Valencia. This is Spain’s third-largest city, with a population of around 800,000 inhabitants. Valencia is becoming a more sought-after choice for foreigners of all ages, from remote workers to retirees.

The reason is this city truly has it all. It’s on the coast with plenty of access to the beach, but you can easily reach the mountains for a change of scenery. It is a big city with plenty to offer but without the high price tag that comes with places like Madrid or Barcelona.

Valencia has a stunning, walkable historic center and abundant green space throughout the city itself. It is a wonderful mix of old and new, a place where you can feel the deep traditions of Spain while experiencing its offerings as a modern city.

If you’re into Spanish cuisine, you will be in heaven in Valencia. This city is the birthplace of Spain’s world-famous paella. You can try all the different varieties in this city, as well as other mouth-watering Spanish classics.

For those looking to stay fit or explore a new hobby, consider cycling in Valencia. It is one of the most bikeable cities in Spain and is home to vibrant cycling culture. There are long stretches of bike paths that run along the river, as well as rentable bikes placed throughout the city.

Public transportation in the city is also quite good for those who aren’t in the mood to stroll through the streets on foot. It’s also a great destination for LGBTQ+ retirees as Valencia is known throughout Europe as a destination that is supportive and ideal for LGBTQ+ travelers.

Seville

If the beach isn’t your top priority, Seville can be another amazing option for retirees. This city located in the inland south of Spain is one of the most charming cities the country has to offer while maintaining affordable prices. It’s the country’s fourth-largest city and has a population of around 700,000.

It’s not as overwhelming as Madrid, nor is it as expensive. However, it has a lot to offer retirees who are looking for a little more hustle and bustle than beach life has to offer.

Seville has charming neighborhoods, mouth-watering eateries, and elaborate historic architecture. If you are looking for a more immersive southern Spanish experience, Seville is a great choice. It is considered the birthplace of Flamenco, and the city still celebrates its musical and cultural traditions with pride.

Seville is also near Portugal’s border, making it easy to have an international weekend away from home. It is a great home base if you are looking to travel around southern Spain as well. You can easily reach charming villages or visit Cordoba or Granada, other favorite destinations in the south.

For more reviews and information on where to live as a retiree in Spain, you can check out this informative Youtube video from International Living:

Portugal

While Portugal may be a much more compact country, it still offers varied landscapes and cities ranging in size and scenery. Its islands tend to be popular retirement destinations as well. Let’s take a look at some of the most popular spots for retirees to call home in Portugal.

Algarve

The Algarve is the most southern region in Portugal, and it touches the Atlantic Ocean with impressive beauty. This region has been a go-to destination for retirees for years and is one of the most naturally beautiful places the country has to offer.

If your priority is the beach, you will want to head to the Algarve. There is a mix of small cities and towns along the coast you can choose from, including Tavira, Lagos, and Carvoeiro. Here you can find great dining and cultural offerings while being close to the region’s stunning nature.

Throughout the Algarve, you can take in the rough and rugged natural beauty and enjoy swimming in the Atlantic Ocean. You can enjoy the breathtaking beauty of the jagged cliffs jutting out into the sea.

However, you won’t be the first to have discovered this region’s stunning scenery. The Algarve can be on the pricier side because it has been such a sought-after vacation and retirement destination for years.

If you are looking for budget-friendly options in the Algarve, you will want to check smaller towns and stay out of the more touristy areas. It will also be more affordable to rent a modest apartment instead of a full house or villa.

If you have a larger budget, you can choose to live in this beautiful region in luxury.

Porto

One favorite destination in Portugal is the northern city of Porto. This city is stunningly beautiful, nestled in the hills with a river running below. While Lisbon suffered an earthquake that wiped out many of the old buildings, this was not the case for Porto.

You can still find so much of its history preserved in its streets, cafes, and homes in this city.

However, Porto is not giving you the sunshine you will find in southern Portugal. Skies can be much more cloudy here with chillier temperatures. However, it puts you in close proximity to many of Portugal’s best northern destinations.

You can easily visit the countryside and other small cities for the day or a weekend getaway.

Lisbon

While this is the biggest city in Portugal, it is still a potential retirement destination for someone looking for a bustling city. It has the most to offer in terms of culture, museums, and nightlife. It is home to so many dining options, and you will never get bored sampling all the restaurants that Lisbon has to offer.

It is also a deeply historical city that will keep you busy taking in its many sites and neighborhoods. The architecture, plazas, statues, and history tucked into each corner can keep you intrigued day after day. When you need a break from its steep hills and cobblestone streets, you can head out on a day trip to its nearby villages and stunning nature.

Lisbon can be a good base as it has plenty of things to do in the city, in the surrounding areas, and has its own airport with many direct international flights.

However, this will be one of the more expensive destinations in Portugal. It is the country’s biggest city, with over 3 million people living there. However, Portugal is an overall affordable country, and it is possible to live in its most bustling city on a retirement budget.

Madeira Islands

While thinking of Portugal, it can be easy to forget that there are island options as well. The Madeira Islands are a series of islands off the coast of the mainland that make for a great retirement destination.

The main island is called Madeira and is the main inhabited destination. The island may be small, but it has a lot to offer for retirees. You can easily start your day at the sea and be on a leisurely hike in the mountains in the afternoon.

The nature is absolutely stunning here and is easily accessible since everything is so close together.

It’s not all nature, though. There are plenty of places around the island for all your wining and dining needs. You can find a wide range of restaurants and cafes to sip delightful coffees and enjoy famous Portuguese food.

Madeira has options for a range of budgets. You can find more affordable housing options in addition to more luxury offerings. Depending on what you are looking for, you may very well be able to find the perfect fit for you and your retirement lifestyle on Madeira.

For more commentary on the various retirement destinations, you can find in Portugal, you can check out this video on Youtube:

Final Thoughts

You can’t go wrong when choosing between Spain and Portugal for retirement. Each country has a relaxed pace of life with cities and sceneries of all shapes and sizes. However, if you are looking for an easier process to obtain your residency and a country that is typically more accessible to foreigners, Portugal is the better choice.

In Portugal, you will be able to handle more things on your own, even before you master the Portuguese language. This can be a huge advantage when it comes to staying on budget and enjoying your retirement experience abroad.

Retire in Spain or Portugal