An Algarve Report Card— Why We Say This Region Is The World’s #1 Retirement Haven
As we’ve been reporting lately, we believe that Portugal’s Algarve region is the best place in the world, all things considered, to live in retirement. Nowhere else in the world, we’ve been arguing, could you embrace a better overall being-retired experience than in this southernmost coastal region of Portugal.
That’s a strong position to take. Let me back it up… by breaking it down.
Here’s our Algarve report card:
The Algarve has been attracting foreign retirees for decades and is home today to more than 100,000 resident expat retirees. We award it an “A”, therefore, for Existing Expat Community.
Thanks to its 3,300 hours of sunshine per year, more sunny days than almost anywhere else in Europe, the Algarve has a longstanding reputation as a top summer destination among European sun-seekers and a top winter retreat for those looking to escape Northern Europe’s coldest months. Definitely, the Algarve gets an “A” for Climate.
The Algarve is one of the safest regions in Europe, and Portugal ranks as the 17th safest country in the world. Violent crime is rare, and petty crime is limited to street crime during the busy tourist season. “A” for Safety and Crime.
Portugal and the Algarve have enjoyed important infrastructure investments recently, specifically to do with the country’s highway network and airports, making this a great base for exploring all of Europe and Northern Africa and earning the location an “A” for Infrastructure.
Portugal’s health care is international-standard, and medical tourism is a growing industry in the region. We give the country an “A-” for Health Care.
Retired in the Algarve, what would you do with yourself all day?
The Algarve’s 100 miles of Atlantic coastline is punctuated by jagged rock formations, lagoons, and extensive sandy beaches, many awarded coveted Blue Flags from the European Blue Flag Association. The water off these shores is azure, and the cliff-top vistas are spectacular. In other words, you could fill at least some of your days at the beach, swimming, sunning, and boating.
In addition, the region boasts 42 golf courses in less than 100 miles and is generally recognized as a top golfing destination in continental Europe, and the world.
Plus, again, this is Old World Europe, meaning Continental culture. We award the region, therefore, an “A” for Entertainment. Living here, you’d be well and fully engaged, whether your idea of a good time is a morning round of golf, an afternoon shopping at an open-air market, or an evening of fine dining.
You could describe life here as healthy. The Portuguese are the biggest fish eaters per capita in Europe, and fresh fish of great variety is available in the ever-present daily markets. The abundance of sunshine means an abundance of fresh produce, too. These facts, along with low rates of pollution and generally clean streets and towns, translate to an “A” for Environment.
You could also describe life here as very affordable. The cost of living in Portugal is among the lowest in Western Europe, on average 30% lower than in any other country of the region. A retired couple could live here comfortably but modestly on a budget of as little as €1,100 or €1,200 per month. Right now, that’s only slightly more in dollar terms.
With a budget of €1,800 per month or more, you could enjoy a fully appointed lifestyle in the heart of Old Europe.
That said, other destinations on our radar offer more affordable costs of living. The Algarve is among your most affordable options in Europe, but perhaps your heart isn’t set on Europe. If you’re shopping in the Americas or Asia, you have cheaper choices. That’s why we give the Algarve a “B” for Cost Of Living. If we were grading the Algarve for its cost of living relative to the rest of Europe, it’d get an “A”.
If you’re thinking of buying a home of your own for your retirement overseas, you’ll be interested to know that the property market in this region remains severely undervalued and, like the cost of living in general, among the most affordable in Europe. Further, Portuguese real estate has one of the most favorable price-to-rent ratios (a measure of the profitability of owning a house) and price-to-income ratios (a measure of affordability) in the region. Bottom line, this means housing is cheaper to buy and investors can make more money from rentals than in most other European countries. We give the country an “A-” for Real Estate.
Further, recent legislation allows resident foreign retirees to receive pension and foreign income in the country tax-free for 10 years, if they qualify for the new Non-Habitual Resident (NHR) status. The law also provides for reduced taxation on wages, intellectual property, interest, dividends, and capital gains. On the other hand, tax rates are relatively high and the tax-free status for NHR residents is not indefinite but for 10 years, which is why we give Portugal a “B” in our Taxes category.
Finally, how easy is it to become a legal full-time resident of Portugal? The country’s new Non-Habitual Resident and Golden Visa programs mean it is much easier than it’s ever been. These retiree- and investor-residency programs are not as benefit-rich or as affordable as comparable programs in the Americas (in Nicaragua, Ecuador, or Panama, for example), but they are very competitive for Europe. That’s why we award Portugal an “A” for Residency.
Kathleen Peddicord
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