‘We cut our expenses by 50%’

In 2011, at 41-years-old, I retired early from my six-figure profession in legislation. My spouse joined me in retirement 4 years later after quitting her job as a nurse.By the time 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 residing expenses 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’s when it hit us: Why not depart the U.S. and spend our retirement life in Lisbon?Without 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., cut our residing expenses whereas residing in Lisbon, then reinvest these financial savings into extra dividend-paying shares to compound our passive revenue. The Miradouro de São Pedro de Alcântara is an ideal spot to admire Lisbon at nightfall. Alex Trias and his household purchased an house within the metropolis for a bit of over €500,000 in 2015.Photo: Alex TriasWe’ve been residing right here for about six years now, and we’re nowhere close to prepared to go away. Here’s how a lot we spend per 30 days — and why we love residing in Portugal:1. Living expenses are a lot decrease than within the U.S.Portugal is taken into account one of many most cost-effective international locations to dwell in Western Europe.On common, in comparison with life again within the U.S., we have cut our expenses 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 of over €500,000 with no mortgage.Our favourite Portuguese cut price: Multiple luggage 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.Portugal is known for its scrumptious seafood, and you could find among the freshest on the Mercado de Campo de Ourique. If you do not really feel like cooking, a number of of the restaurant cubicles on the Mercado decide their seafood provides from the fish counter.Photo: Alex TriasOne of our greatest month-to-month expenses is eating out at eating places. A typical lunch on the Mercado de Campo de Ourique, a connoisseur meals market, can run about $16 per individual. A glass of wine prices an additional $4.Here’s a breakdown of our month-to-month expenses:Health insurance coverage (for all the household): $258Groceries: $407Basic family necessities: $250Transportation (gasoline, automobile insurance coverage, public transportation): $250Housing (property taxes, insurance coverage, upkeep): $430Water and electrical energy: $175Phone and web: $80Eating out (10 to 12 meals per 30 days): $600Total: $2,4502. A really beneficiant tax systemEuropean taxes are usually very excessive, however not like international locations like France and Italy, Portugal does not impose wealth, inheritance or property taxes (though there’s a 10% “stamp responsibility” on Portuguese belongings which can be inherited or gifted exterior of the direct household).As an expat, you might be thought-about a Portuguese taxpayer when you reside greater than 183 days in a single calendar 12 months in Portugal or, topic to sure circumstances, when you’ve got a everlasting residence accessible in your private use in Portugal.And because of the non-habitual resident tax regime, foreigners can profit from a tax exemption (or a diminished tax price) on most overseas supply revenue for 10 years.As U.S. residents, we’re at all times 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 in the us3. Low-cost, high-quality healthcareIn addition to Portugal’s nationwide well being companies protection, which presents backed or free well being companies to all authorized residents of Portugal, my household’s personal medical insurance by Multicare is complete and reasonably priced.Our premium is $258 per 30 days, however our plan has a $0 deductible and $16 co-pays for physician visits at a non-public hospital. I as soon as had an in a single day emergency room go to that concerned a number of assessments and consultations; all the price 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 will usually price me $600 a month again dwelling is simply $21 in Portugal — for the model identify treatment. 4. Low crime chargesPortugal is the fourth most secure nation on the planet, in response to the 2021 Global Peace Index, which considers terrorism, violent crime and political instability, amongst different elements, in its methodology.And the Portugal News reported that 2020 had the bottom crime charges in Portugal for the reason that nation began reporting its crime knowledge in 1989.Beyond 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 purchasing.You can store for recent produce or decide up lunch on the Mercado de Campo de Ourique. The market is noticeably protected, with prospects leaving their purses at their tables as they go meals purchasing.Photo: Alex TriasAfter we first moved right here, my spouse seen there isn’t any “cat calling,” and she or he has by no means felt harassed strolling down the road. The Portuguese are inclined to prize good manners. “Bem educado” means “well mannered” in Portuguese, which comes as very excessive reward.That mentioned, pickpocketing is a real menace in congested vacationer areas, so we’re at all times on guard after we trip the tram.5. Consistently nice weatherTemperatures 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.Guincho Beach, situated about 25 minutes by automobile exterior of Lisbon, kinds a part of the Sintra National Park.Photo: Alex TriasIn 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.6. Getting off the hamster wheelLiving overseas has utterly modified our outlook and priorities in life. We considerably streamlined our belongings after we moved to Portugal. We now focus way more on how we spend our time.I attempt to construct downtime into my day and spend numerous time in nature. Some of my happiest moments are when I’m strolling alongside the seashore at Guincho Beach or mountaineering by eucalyptus forests within the hills of Sintra and Colares.I additionally take each alternative to journey with my household. Backpacking by Europe is our daughter’s favourite factor about residing 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 legal professional. He and his spouse and daughter have been residing in Portugal since 2015. He is the writer of the “Investment Pancake” sequence on SeekingAlpha.com and has revealed practically 500 articles about tax planning, investing, early retirement, and the place to search out one of the best meals in Lisbon.Don’t miss:


Recommended For You