Retiring in Portugal vs Spain: Which country fits your retirement plan?

Portugal and Spain consistently rank among the top retirement destinations for Americans and Europeans, but the two countries offer very different experiences once you factor in climate, day-to-day lifestyle, visa routes, healthcare access, taxation, and cost of living. 

For anyone comparing retiring in Portugal vs Spain, this guide breaks down each of these factors with current data and retiree-specific insights, helping you decide which country aligns better with your budget, pace of life, and long-term residency goals.

Why Portugal and Spain are top retirement choices

For anyone deciding between Spain or Portugal for retirement, factors like climate, lifestyle, affordability, and long-term quality of life play a central role. Each country excels in different ways, giving retirees varied but equally appealing options.

Climate and day-to-day lifestyle

Portugal has a distinctly mild Atlantic climate, which keeps summers cooler and winters comfortable, especially along the coast. The Algarve enjoys over 300 days of sunshine per year, making it a prime location for retirees who want year-round warm weather without extreme heat. 

Cities like Lisbon and Cascais benefit from ocean breezes and a relaxed pace of life. The streets are quieter, evenings wind down earlier, and many rural towns still follow a slower rhythm.

Spain’s climate skews warmer overall. Mediterranean regions such as the Costa del Sol and Costa Blanca offer long, hot summers and mild winters, which is ideal for retirees who prefer consistent heat. 

Major cities like Madrid and Barcelona bring a more energetic lifestyle with late-night dining, festivals, and a faster urban tempo, while coastal towns offer a more laid-back beach atmosphere. Compared to Portugal’s calm, community-oriented environment, daily life in Spain tends to be more lively and urban.

Lower cost of living compared to the U.S.

Both countries remain significantly more affordable than the United States, but Portugal usually comes out slightly cheaper, which is why the living cost comparison of Portugal vs the US consistently shows Portugal as the better-value option. 

A single retiree can live comfortably on €1,300 - €1,700 per month in Portugal, and couples often spend €2,000- €2,500 depending on the region. Housing, groceries, and dining are where retirees feel the biggest savings, especially outside Lisbon.

Spain’s cost of living is still low by U.S. standards, although slightly higher than Portugal’s. Couples typically spend around €2,700 per month, with costs increasing in large cities and decreasing in smaller coastal areas. 

Even so, retirees in both countries find that their pensions stretch far more comfortably due to lower everyday expenses, affordable healthcare, and inexpensive local food.

High quality of life and safety

Portugal consistently ranks as one of the safest countries in the world, renowned for its political stability, low levels of violent crime, and a strong sense of community. The slower pace and walkable city centers make retirees feel secure and welcome. 

Spain also provides a high level of safety, though large cities experience more crowd-related petty crime. Smaller towns and coastal areas remain peaceful, friendly, and well-suited to retirees.

Across both countries, quality of life is shaped by outdoor living, rich cultural traditions, historic cities, and accessible healthcare. Retirees enjoy walkable neighborhoods, café culture, beaches, hiking trails, and a climate that supports an active lifestyle year-round.

Visa options for retirees: Spain vs Portugal

Portugal’s D7 visa (retirement visa)

Portugal does not offer a dedicated “retirement visa,” but most retirees qualify under the D7 Passive Income Visa. This route is popular because the income threshold is comparatively low and the residency pathway is clear. 

Applicants must demonstrate a passive income of approximately €870 per month, plus an additional 50% for a spouse and 30% for each dependent child. They also need a NIF (tax number), a Portuguese bank account, and proof of long-term accommodation.

The process begins at a Portuguese consulate, where retirees receive a four-month entry visa. Once in Portugal, they attend their AIMA biometric appointment to obtain a two-year residence permit. After five years of legal residence, applicants become eligible for permanent residency or citizenship.

Key benefits of the D7

Spain’s non-lucrative visa (NLV)

Spain’s Non-Lucrative Visa is the closest equivalent to a retirement visa, but it requires significantly higher income. Applicants must prove €2,400 per month (400% of Spain’s IPREM) plus €600 per dependent, making it nearly three times more demanding than Portugal’s D7. 

Private health insurance is mandatory, and visa holders must spend the majority of the year physically in Spain, as long absences can affect renewals. The initial permit is valid for one year and can be renewed for two additional two-year periods, leading to permanent residency after five years.

Restrictions of the NLV

Key differences between D7 and NLV

While both visas require proof of financial stability and clean criminal records, the two systems differ sharply in income thresholds, residency rules, and remote-work flexibility.

Portugal vs Spain Cost of living comparison

Understanding the cost of living is essential when planning your retirement in Portugal. Housing is the biggest expense for most retirees, so comparing the costs in Portugal and Spain helps you make an informed decision.

Housing costs: renting and buying

Portugal offers more affordable housing than Spain. The average property price in Portugal is about €1,951 per m². Prices in Lisbon are higher at €3,644 per m² and in the Algarve at €3,334 per m². In Spain, the national average ranges from €2,300 to €2,800 per m². Major cities are more expensive, with Madrid at roughly €4,200 to €5,000 per m² and Barcelona at €4,000 to €4,800 per m².

Rental prices follow the same pattern. A one-bedroom apartment in Lisbon usually costs €1,200 to €1,500. In Porto and Faro, it is closer to €800 to €1,000. Similar apartments in Madrid or Barcelona cost €1,400 to €1,600. Smaller Spanish cities sometimes fall between €600 and €900. Overall, Portugal remains the more budget-friendly choice for both renters and buyers.

Groceries, dining out, and utilities

Grocery spending is similar in both Portugal and Spain. One person typically spends €200 to €300 each month. However, the price differences on individual items are small. 

Dining out is more affordable in Portugal. A lunch special usually costs €8 to €12. A mid-range dinner for two is often €25 to €35. In Spain, lunch tends to cost €12 to €18.

Dinner for two ranges from €25 to €50. Utilities average €100 to €130 per month in Portugal and €110 to €150 in Spain. Public transport passes cost €40 to €50 in Portugal and €22 to €79 in Spain, depending on the city.

Transportation and monthly expenses

Portugal’s public transport network is reliable, although Spain has a larger and more connected system because of its high-speed trains. A monthly pass in Lisbon costs €40 to €50. In Madrid, the cost ranges from €22 to €79 depending on travel zones. Fuel prices are lower in Spain, where gasoline averages €1.46 per litre compared to €1.75 per litre in Portugal.

Most retirees find that monthly budgets of €2,500 to €3,000 in Portugal and €2,700 to €3,200 in Spain cover housing, transport, healthcare, food, and leisure. Costs vary by region, but Portugal remains slightly more affordable overall.

Taxes and financial considerations

How Portugal taxes retirees

Portugal taxes residents on worldwide income. Foreign pensions are taxed under the standard progressive rates, which range from 14.5 percent to 48 percent. Portugal does not charge a wealth tax, and property taxes are moderate. 

Inheritance is subject to forced heirship rules that reserve two-thirds of an estate for legal heirs. Residents can choose to apply their home country’s succession laws under EU Regulation 650/2012.

How Spain taxes retirees

Spain also taxes residents on worldwide income, which is important to understand when looking at Spanish tax rates for pensioners. Rates can reach 47%, and savings income is taxed from 19 to 28%. Non-residents pay 24% on Spanish-sourced income. Some regions apply a wealth tax, and inheritance rules vary across the country. Under tax treaties, certain U.S. pension income is taxable only in the United States.

Which country is more tax-friendly?

Portugal is usually considered the more tax-friendly option because it has lower income thresholds and does not impose a wealth tax. Spain’s higher progressive brackets and regional wealth taxes increase the overall tax burden. Both countries have exceptions and special cases, so professional advice is important when planning retirement income.

Healthcare systems and insurance

Healthcare quality in Portugal

Portugal’s national healthcare system, known as SNS, provides universal coverage with low co-payments. English-speaking doctors are common in major cities and in the Algarve. Private insurance usually costs €50 to €100 per month and offers faster access to specialists. 

Popular hospitals for retirees include Hospital de Faro, Hospital de Portimao, and Hospital de Lagos in the Algarve, as well as Hospital de Santa Maria and CUF Cascais in the Lisbon area.

Healthcare quality in Spain

Spain’s national health system is one of the highest-rated in Europe. Residents receive access to public healthcare, and many retirees choose private insurance, which also costs about €50 to €100 per month. 

Major cities such as Madrid, Valencia, and Barcelona have well-established hospitals and specialist centres. Applicants for Spain’s non-lucrative visa must show proof of full private coverage before arrival.

Lifestyle differences retirees care about

Climate: Atlantic vs Mediterranean

Portugal’s climate is shaped by the Atlantic. Summers are cooler, winters are mild, and the Algarve has more than 300 sunny days each year. Spain’s climate is driven by Mediterranean and continental patterns. 

The southern coast is hot and dry in summer and mild in winter. Inland regions experience bigger temperature swings.

Language and ease of integration

English is widely spoken in Portugal’s major cities and in tourist areas, which makes the transition easier. Basic Portuguese is still helpful for daily life. In Spain, Spanish is more essential. 

While English is common in coastal regions with large expat populations, daily tasks in many towns are easier with Spanish. Language schools and cultural programs are widely available in both countries.

Food, culture, and social life

Portuguese food focuses on seafood, fresh ingredients, and simple flavours. Daily life feels calm and social without being intense. Spain is known for tapas, late dinners, music events, and a lively festival culture. Cities such as Barcelona and Madrid offer large art museums, music venues, and theatres. Both Portugal and Spain support active outdoor lifestyles with golf, hiking, sailing, and water sports.

Expat communities

Portugal’s strongest expat groups are found in the Algarve, Lisbon, Cascais, and Porto. Towns like Lagos, and Tavira have long-established retiree communities with English-speaking services. 

Spain also has large expat hubs, especially in Marbella, Alicante, and cities such as Madrid, Barcelona, and Seville. These regions offer international schools, English-speaking healthcare,  and active social clubs.

Best places to retire in Portugal and Spain

Best places to retire in Portugal

Portugal offers retirees an appealing mix of safety, affordability, and quality of life. The Algarve attracts those seeking sunshine and beaches, with over 300 sunny days annually. Lisbon and Cascais blend urban amenities with coastal charm, plus easy airport access for international travel.

The Silver Coast provides authentic Portuguese culture at lower costs. Towns like Caldas da Rainha and Nazaré offer ocean views without the crowds. Porto and Braga in the north deliver rich history and excellent healthcare at reasonable prices.

Inland regions like the Douro Valley suit nature lovers seeking tranquility. Living costs here are significantly lower.

Most retirees need €2,500 to €3,000 monthly in Portugal. This covers housing, healthcare, food, and leisure. The D7 Passive Income Visa makes residency accessible for those with stable pensions or savings. English is widely spoken in major cities and coastal areas, making the transition easier for foreign retirees.

For more details, you can check our article on the best places to retire in Portugal.

Best places to retire in Spain

Madrid is ideal for retirees who want a major city with strong infrastructure, museums, restaurants, and year-round cultural events. It is walkable, has an extensive public transport system, and offers a lively lifestyle.

Barcelona is known for its architecture, creative culture, and active expat community. Landmarks such as the Sagrada Familia and the Ramblas attract newcomers and create a vibrant daily atmosphere.

Seville appeals to retirees who want authentic Andalusian culture and a lower cost of living. Rents can start around €800 per month, and the pace of life is slower than in larger cities.

Alicante, located on the Costa Blanca, is popular among retirees seeking beaches, warm weather, and a strong international community. Nearby towns such as Elche and Benidorm provide additional options.

Marbella on the Costa del Sol is another favourite. It has mild winters, a large expat population, good restaurants, and strong healthcare facilities. Living costs are lower than in Barcelona and Madrid.

Pros and cons of retiring in Portugal and Spain

Deciding between Spain or Portugal for retirement often means weighing the practical advantages of each country against the potential drawbacks. The lists below highlight what most retirees consider before choosing where to settle.

Pros and cons of retiring in Portugal

Pros 

Cons

Pros and cons of retiring in Spain

Pros

Cons

Spain vs Portugal: Which country is right for retirees?

Choosing between retiring in Portugal vs Spain depends on the lifestyle you want, your budget, and how much flexibility you need with visas and daily living. Both countries are excellent options, but each appeals to a different type of retiree.

Reasons to choose Portugal

Portugal is a strong choice for retirees who want a lower cost of living and a calm, steady pace. Communities are smaller and quieter, safety levels are high, and English is widely spoken in many coastal and urban areas. 

The D7 visa also makes residency more accessible due to its lower income requirements and flexible stay rules. Portugal suits those who prefer milder summers, relaxed towns, and an environment that feels easy to settle into.

Reasons to choose Spain

Spain is the better option for retirees who want larger cities, warm Mediterranean weather, and a more active social atmosphere. Its cultural scene includes festivals, music events, museums, and nightlife, creating a lively lifestyle year-round. Spain’s healthcare system is one of Europe’s best, which adds appeal for long-term residents. 

Although living costs and visa requirements are higher, Spain works well for retirees who value bigger metropolitan areas, beach weather, and a vibrant daily pace.

Touchdown makes relocating to Portugal simple for retirees

Planning a move abroad is exciting, but comparing residency options, gathering documents, and meeting financial requirements for retiring in Portugal vs Spain can become complicated fast. Touchdown is here to simplify every step and guide you with clarity.

As a leading relocation platform for Portugal, Touchdown combines expert legal support, easy-to-use tools, and personalized guidance to help you secure the right residency pathway. 

Our free eligibility checker shows which visa fits your profile. From there, we help you obtain your Portuguese NIF, open a local bank account, and prepare all documentation under the supervision of licensed immigration lawyers.

When it is time to apply, our team coordinates your consulate appointment and ensures your submission meets the latest requirements. After arrival, Touchdown continues to support you through local registrations, tax setup, and residency renewals so you can focus on settling into your new home with confidence.

Book a 1:1 consultation with our team or explore the platform to start your move to Portugal with confidence.

FAQs about retiring in Portugal vs Spain

Is Portugal or Spain better for retirement?

Portugal usually comes out ahead for lower costs, easier residency, and strong safety scores, while Spain is better for retirees who want bigger cities, warmer weather, and a more active cultural scene. The best choice depends on your lifestyle priorities.

Do US retirees pay taxes in Portugal?

Yes. If you are a US citizen and a Portuguese tax resident, you must declare your worldwide income in Portugal. Non-residents only report Portuguese-source income. The Portugal–US tax treaty allows you to claim credits or exemptions so you are not taxed twice.

Which is safer, Portugal or Spain?

Both countries are safe, but Portugal ranks higher on global peace and safety indices. Spain is also considered very safe but Portugal has a slight statistical edge overall.