New retirees in Portugal face higher taxes after the NHR regime closed, increasing expenses for U.S. expats with $300,000-$500,000 in savings.
Retiring in Portugal now requires $300,000 to $500,000 in savings alongside $55,000 in annual Social Security income for a comfortable lifestyle. The country’s Non-Habitual Resident tax regime ended in April 2025, exposing new retirees to progressive tax rates up to the high 40s on IRA withdrawals and pensions.
Previously, the NHR regime offered significant tax breaks, making Portugal a top destination for U.S. retirees. With those incentives gone, financial planning must account for higher tax burdens, though living costs remain below many U.S. metropolitan areas. Housing, healthcare, and income structuring are now critical factors in affordability calculations.
Middle-management retirees earning a median $122,090 annually may still find Portugal viable, but the financial equation has shifted. Strategies like Roth conversions before residency can help mitigate tax friction abroad.