‘We cut our expenses by 50%’

In 2011, at 41-years-old, I retired early from my six-figure profession in regulation. My spouse joined me in retirement 4 years later after quitting her job as a nurse.

By the point she retired in 2015, our portfolio of high-yielding shares and mutual funds paid roughly $130,000 a 12 months in dividends, which coated most of our dwelling bills in Washington, D.C.

That 12 months, we took a household trip to Lisbon, Portugal with our daughter, who’s now 16 years previous. We instantly fell in love with town.

That is when it hit us: Why not depart the U.S. and spend our retirement life in Lisbon?

With out losing any time, our household of three packed up our belongings and booked one-way tickets to Portugal. The plan was to hire out our home within the U.S., minimize our dwelling bills whereas dwelling in Lisbon, then reinvest these financial savings into extra dividend-paying shares to compound our passive revenue. 

We have been dwelling right here for about six years now, and we’re nowhere close to prepared to depart. Here is how a lot we spend per thirty days — and why we love dwelling in Portugal:

Portugal is taken into account one of many most cost-effective international locations to stay in Western Europe.

On common, in comparison with life again within the U.S., we have minimize our bills by 50%. We’re lucky to personal our two-bedroom, one-bathroom, 1,300-square-foot house, which we bought in 2015 for a bit over €500,000 with no mortgage.

Our favourite Portuguese discount: A number of baggage of recent fruit and veggies. A heat loaf of bread from Gleba Bakery — made with its very personal homegrown heirloom wheat — prices solely $4, and is value each penny.

Certainly one of our greatest month-to-month bills is eating out at eating places. A typical lunch on the Mercado de Campo de Ourique, a gourmand meals market, can run about $16 per particular person. A glass of wine prices an additional $4.

Here is a breakdown of our month-to-month bills:

• Medical insurance (for the whole household): $258
• Groceries: $407
• Fundamental family necessities: $250
• Transportation (gasoline, automotive insurance coverage, public transportation): $250
• Housing (property taxes, insurance coverage, upkeep): $430
• Water and electrical energy: $175
• Telephone and web: $80
• Consuming out (10 to 12 meals per thirty days): $600

Complete: $2,450

European taxes are usually very excessive, however in contrast to international locations like France and Italy, Portugal would not impose wealth, inheritance or property taxes (though there’s a 10% “stamp obligation” on Portuguese property which can be inherited or gifted exterior of the direct household).

As an expat, you might be thought of a Portuguese taxpayer in case you reside greater than 183 days in a single calendar 12 months in Portugal or, topic to sure situations, when you’ve got a everlasting residence accessible to your private use in Portugal.

And due to the non-habitual resident tax regime, foreigners can profit from a tax exemption (or a lowered tax charge) on most overseas supply revenue for 10 years.

As U.S. residents, we’re all the time accountable for U.S. revenue taxes, however we save on state and native revenue taxes. Plus, our property tax invoice in Portugal is a fraction of what we paid within the U.S.

Along with Portugal’s nationwide well being companies protection, which provides sponsored or free well being companies to all authorized residents of Portugal, my household’s personal medical health insurance by way of Multicare is complete and reasonably priced.

Our premium is $258 per thirty days, however our plan has a $0 deductible and $16 co-pays for physician visits at a personal hospital. I as soon as had an in a single day emergency room go to that concerned a number of assessments and consultations; the whole value was coated by our insurance coverage, and I paid nothing aside from my co-pay.

Prescription drug costs additionally are usually dramatically decrease in Portugal than within the U.S. One generic prescription that might sometimes value me $600 a month again dwelling is simply $21 in Portugal — for the model title medicine. 

Portugal is the fourth most secure nation on the planet, based on the 2021 World Peace Index, which considers terrorism, violent crime and political instability, amongst different elements, in its methodology.

And the Portugal Information reported that 2020 had the lowest crime charges in Portugal because the nation began reporting its crime knowledge in 1989.

Past the statistics, my household and I really feel very protected in each a part of Lisbon at just about all hours. Locals even declare tables on the Mercado by leaving their purses unattended on a chair whereas they go meals buying.

Once we first moved right here, my spouse observed there isn’t a “cat calling,” and she or he has by no means felt harassed strolling down the road. The Portuguese are likely to prize good manners. “Bem educado” means “well mannered” in Portuguese, which comes as very excessive reward.

That stated, pickpocketing is a real risk in congested vacationer areas, so we’re all the time on guard after we journey the tram.

Temperatures in Lisbon vary from a median excessive of 82 levels Fahrenheit in July to a median low of 47 levels Fahrenheit in January, which compares favorably to the sweltering warmth and piles of snow typical in Washington, D.C.

In Lisbon, we hardly ever use an air conditioner in the summertime. The thick stone of our house partitions assist reasonable temperature indoors. And we by no means hassle with hats or gloves within the winter.

Residing overseas has utterly modified our outlook and priorities in life. We considerably streamlined our belongings after we moved to Portugal. We now focus much more on how we spend our time.

I attempt to construct downtime into my day and spend loads of time in nature. A few of my happiest moments are when I’m strolling alongside the seashore at Guincho Seashore or mountaineering by way of eucalyptus forests within the hills of Sintra and Colares.

I additionally take each alternative to journey with my household. Backpacking by way of Europe is our daughter’s favourite factor about dwelling in Portugal. She treasures each second, whether or not she’s attending a math competitors in Geneva or taking a household drive to Seville for the weekend.

Alex Trias is a retired lawyer. He and his spouse and daughter have been dwelling in Portugal since 2015. He’s the creator of the “Funding Pancake” sequence on SeekingAlpha.com and has printed almost 500 articles about tax planning, investing, early retirement, and the place to seek out one of the best meals in Lisbon.

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