# Yet another early retiree looking for sanity check



## sponger (Jun 4, 2020)

yet another early retiree looking to PT as my wife and I's future home. Like many (likely most) US citizens, we have been way too myopic on working and too US-centric having never spent substantive time in any other country (one week vacations every year or so to a beach or to Rome/London/? doesn't feel the same as immersing yourself into a culture).

After about a year's worth of research...we've definitely sold ourselves on Lisbon/PT. Really an easy sell...but with covid mixed with a bit of a mid-life crisis....my wife and I have come to the conclusion that life is too short to wait for the perfect time so we're "just doing it".

I realize how open ended this question is....and that there are as many opinions as there are people...but really looking for confirmation that I'm not crazy and not setting myself up for a financial meltdown.

In looking at our financials (uber conservative projections)….we can budget about $4,500 per month (after tax cash). I've read a lot about families easily "living" on $1,500 a month and International Living regularly touts the ability to live well in Portugal for about $2,200 a month....with $3,000 living very very well. When searching the net...some people say while these are possible, others claim this is fine for surviving. Many people point to Numbeo as a good reference...but then it claims that Lisbon (for example) is 23% cheaper than my hometown in the US and the average cost for a single person in Lisbon (excluding rent) is about $700. Based on that math, the average monthly cost in my home town for a single person would be around $900 (exc rent). While this is possible, it would really be barely getting by...so I don't fully trust Numbeo.

What I can't seem to find is any recent observations from residents on what "living well" means since it's such a relative terms. I can see rental prices online and would think between $1,500 to $2,000 max should get us a nice place in a decent part of Lisbon....which means I have ~$3,000 for everything else. Is this enough to really comfortably experience the country? 

Our "lifestyle" would include wanting to eat out several times a week (mid-range restaurants) with eating at a high-end restaurant once or twice a month. Going to a movie/theater at least once a month but likely more, traveling (day trips or occasional overnight) around the country maybe once a month. Longer trips with airfare outside of Portugal would be funded separately. I don't think we'll have a car but if we did...that would be purchased outside of budget. 

There is a lot of good info on this site....so thanks in advance for thoughts. Also note....I know there are other threads....but it's always good to get that added personal confirmation (or otherwise) ahead of making what I consider a life changing adventure....


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## NickZ (Jun 26, 2009)

Stop planning in $. Think in €. Many of the costs you want can be found online but nobody bills in $.

Build a safety margin into your budget for currency fluctuations. 

Historic average for €/$ is 1.18. About 8% worse when compared to today. It's been much higher in the past. You need to be able to handle that. 

I'm sure the average local is living on a fraction of your budget. The problem is what are your expectations? 

How large of an apartment? If you're coming from the US you might feel cramped even in a larger family sized apartment. 

That relates to more than just room size. Your utility use may be different than the average. Your food choices different.


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## RichardHenshall (Jul 26, 2009)

... and don't forget to allow for Portuguese income taxes on your worldwide income and gains.


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## sponger (Jun 4, 2020)

thanks for the initial responses! 

I've already built in about a 10% cushion for exchange rate (meaning I could lose 10% of cash due to changes in foreign currency) and this is on top of an additional cushion for just being off. 

My budget also assumes cash available after tax. Admittedly.....the effective tax does confuse me a bit as there is no clear guidance I can find. I'll end up paying a tax advisor to effectively create a pro forma expat return based on assumptions....and what my effective tax should be. I've done my own calcs based on NHR, how much income (if any) I earn from potentially working taxed at PT rates, double tax treaty, and a few other assumptions I researched. But I start to get confused when trying to understand how my US-based IRA is taxed (on not just distributions but also investment gains) and social security.....but both IRA and SS are several years away. I plan on living at least the next five years on purely savings.

Assume the $ budget is Euro....does anyone have experience living on $3K a month (not including Rent) and what does that allow you in terms of lifestyle in Lisbon? (my assumption is this is above the "average" local...).


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## Strontium (Sep 16, 2015)

Stop living on some internet dreamscape, just come over here for 2 months or so and experience the place, no one in reality would consider moving their home to a different country without initially getting firsthand experience of the place then sorting out the minor details like how much will it cost. . Locals here are on an mean average income of approx 1200 euro a month before tax so if you live like a local family you are quids in ( as the Brits say). Most local workmen have a lunch at some local restaurant for 7 (varies) euro but not yer al la carte stuff obviously as their 1200 euro before tax means they are sensible.


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## Knollbrow (Aug 15, 2017)

Cant blame you for wanting to escape Trumpland !

Without a doubt you could live very luxuriously on your monthly budget in Portugal - even in Lisboa 
But there is so much more to Portugal than Lisboa.

Whilst Lisboa is my all time favourite city I don’t venture there in July / August peak times - too busy / too hot - although it’s getting busy with tourists most months because of Airbnb. 

My advice is that you really need to explore to the north and south of Lisboa - you will find places, people, values and lifestyles that are so totally different to any in the US.

I found my happy place in the Alentejo - 2 hours by fast train from Lisboa, 10 mins from beautiful unspoiled Atlantic beaches and 1 hour drive from the Algarve and Faro airport. The location is stunning, no pollution, very low levels of crime (none that we have seen) the locals friendly and authentic, the lifestyle is relaxed and simple, there are fantastic restaurants serving simple tasty food for €7 as well as more expensive fresh sea food, and at the end of the day the night sky is so clear you see the Milky Way in all it’s glory.

So don’t worry about budget - focus on location, and the lifestyle values in your retirement


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## Eliora (Apr 20, 2020)

IMO the Language is the biggest problem in Portugal, for us anyway.
Everything else is good.


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## hktoportugal (Feb 25, 2019)

Strontium said:


> Stop living on some internet dreamscape, just come over here for 2 months or so and experience the place, no one in reality would consider moving their home to a different country without initially getting firsthand experience of the place then sorting out the minor details like how much will it cost.


We are probably quick learners as we decided in less than two weeks ;-) We visited Portugal three years ago for the first time, one week in Lisbon with a trip to the Algarve, 5 days in Porto with a few trips up further north. We came here convinced we would buy something in Lisbon and fell in love with Porto instead and relocated to Porto two years later (as we wanted to time this with our daughter going to middle school). But to your point, definitely recommend to at least visit Portugal and the various regions before you settle on Lisbon, we are sure glad that we did.


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