Last Updated on November 27, 2023 by Maryam Siddiqui
We don’t believe in competing with our European neighbors, but a lot of people often need clarification on spending their retirement in Portugal or Germany. For many years, Germany has been a magnet for tourists, retirees, and the working-age population. However, Portugal has taken the lead recently. So, what has changed?
There’s a lot to consider when deciding where to spend your golden years and the decision never truly gets easier. You’ll most likely consider the cost of living first, followed by safety, availability of healthcare, and, lastly, the entertainment options.
This article aims to help make your retirement journey easier by making a candid comparison between both of these countries. What’s there to love, and what’s there to reconsider? Let’s get into the details; Happy reading!
Retirement in Portugal or Germany? Why expats choose them
The total distance between Germany and Portugal is nearly 1200 miles, but they’re a lot closer at heart.
Portugal is located in the western part of the Iberian Peninsula, with the Atlantic Ocean to the south and west. Germany is in Central Europe, bordering the Baltic Sea north and the North Sea south.
Germany has a high standard of living, contributing to its popularity as a destination for expats. Germans enjoy a clean environment, high-quality healthcare, low crime rates, reasonable living costs, and excellent infrastructure.
Currently, 11% of Portugal’s population is immigrants, while 12% of the people in Germany are immigrants.
They’re both considered very good choices for retirees, so what makes them among the best? We’ll explain all the similarities and differences between the two countries and by the end of the article, you’ll be able to decide which one suits your needs more.
Similarities between the countries
There are many similarities and differences between the ways both countries function and what they offer their inhabitants. Both countries enjoy pleasant weather, breathtaking scenery, beaches, and a relatively low cost of living.
One reason why Germany and Portugal are new favorites for expats is because of the low cost of living compared to the rest of Europe. We’ll discuss the details later in the article, but they’re both relatively more affordable than other European countries.
Portugal is famous for its peaceful and slow lifestyle. The country consists of friendly inhabitants who love being close to nature and enjoy walks on the beach. Similarly, you will enjoy a clean and orderly lifestyle in Germany.
There can only be a conversation about these two countries if there’s a mention of the environment. Germans are known to have a high level of environmental awareness. The country’s water supply is generally crystal clear, and the lakes and rivers are immaculate.
Both countries are dedicated to ensuring a healthy environment and have government policies to check all the measures. According to Numbeo, Portugal has a 30.67 score, while Germany has a 28.59 score on the pollution index.
Portugal is currently leading the way in technology. It can be seen in the global expansion of some innovations, the establishment of large international high-tech companies, and the number of startups that thrive in the country.
As we all know, Germany distinguishes itself as a country that develops cutting-edge technology, particularly in high-value industries. If you look at Portugal’s recent growth, both these countries are racing parallel to become technology giants.
Portugal vs Germany for expats
Living in two different countries can never be the same; each has its drawbacks and benefits. Before moving into a new place, it would be a good idea to look carefully and decide accordingly. You may have many questions revolving in your head about whether to opt for retirement in Portugal or Germany.
Let’s dive into details of how life in both countries will likely affect your judgment and lifestyle.
About living retired in Portugal
According to the World Economic Forum, Portugal is the fourth-best country in the world to enjoy your retirement. With a low cost of living and tax incentives, retirees worldwide flock to Portugal. Retirees can benefit from the Non-Habitual Tax Regime, a high-quality healthcare system, and an overall excellent standard of living.
Portugal has some of Europe’s most iconic architecture, art, and music. With over 300 days of sunshine, you can enjoy the climate in Portugal, offering warm summers and moderate winters.
Everyone in Portugal can find a place and an activity that they enjoy. Lisbon is a city that attracts young people who want to live in the heart of the country. Likewise, Azores or Algarve are places for people who enjoy peace and comfort. Surfing, fishing, and diving are popular pastimes among the residents.
Don’t worry; it is not just words. In 2022, Portugal won thirty World Travel Awards. The awards were presented for its adventure tourism, beaches, and resorts, such as in the Algarve region, which residents chose as the most incredible beach destination.
You might know that the Portuguese are obsessed with food. High-quality Portuguese dishes such as seafood and meat dishes are impeccably prepared with simpler ingredients and are light and healthy. And the award-winning local wines and beverages to wash it all down are plenty.
Portugal’s healthcare system and treatment quality are at par with European healthcare systems, which, as we know, are among the best in the world. All legal residents also have access to free public healthcare.
The country features a mix of modern cities and remote municipalities with breathtaking views, making it ideal for people looking for a little bit of everything. From the bustling culture to the leisurely pace of life, retirees of all lifestyles will find a home in Portugal.
About living retired in Germany
Germany has been a popular retirement destination due to its low expenses, robust healthcare system, and well-maintained infrastructure. The weather may not be as pleasant as in Portugal, but Germany could be your ideal retirement place if you don’t mind some chilly winters.
According to data from Numbeo, rent in Germany is about 37% lower than in the US. A one-bedroom apartment in the city center costs €866. In contrast, a one-bedroom apartment outside the city center costs as low as €620.
Germany is one of the top five countries in Europe for its beautiful landscapes, lakes, mountains, oceans, rivers, and parks. You will be astounded by the natural scenery across the country, such as rock formations and blue seas.
For all the choco lovers, Germany is famous for its excellent chocolate – it’s no surprise that it produces delectable delicacies.
With a 62.3% safety index score, it is one of the safest places to enjoy your retirement years. As per Statista, Germany’s crime rate for 2021 was 6,070 crimes per 100,000 people, marking the sixth year that the country’s crime rate has decreased.
Differences between the countries
As you can tell by now, the two countries have plenty of similarities. So now, let’s move on to how they’re different so you can decide whether to spend your retirement in Portugal or Germany.
Living in Portugal is more like living in a friendly homeland. People are easygoing, considerate, and homely. You can see people taking walks to parks and beaches and children playing on a Sunday noon quite often.
The friendly attitude extends to their business dealings as well. Physical contact is vital to the Portuguese, and they can be offended by the Germans’ usually more reserved demeanor.
The Portuguese, unlike the Germans, do not engage in small talk about occupations, income, or religion. But rather prefer talking about literature, films, or good wine to create mutual trust. In balancing personal and professional responsibilities, Portugal performs better than Germany.
Another difference is the aesthetics of eating out. Portuguese people don’t follow Germany’s street food-eating culture. In Portuguese restaurants, you don’t look for your table but wait to be seated by the waiter.
These are only some of the differences and may not really impact your decision to retire here. Let’s look at some of the most important aspects that would contribute to your decision-making.
Cost of living in each country
Retirees usually do not plan to be extravagant while moving to a new country or place. Therefore, you should do comprehensive planning to forecast future aspects as well. Going for a cost-friendly option with maximum lifestyle utility is nothing short of a miracle.
That being said, consumer prices in Germany are 38.57% higher than in Portugal (without rent). If you live in Portugal, you’ll be paying 44.2% less for restaurants; for example, a basic meal with a drink at a budget restaurant will cost only €8. Grocery prices are 41.25% higher in Germany, and rent is 20.86% cheaper in Portugal.
Conclusively, living in Germany is more expensive than in Portugal. However, it is also important to remember that Germany’s purchasing power is much higher. Let’s look at some of the cost differences we’ve highlighted in the table below:
| Expense | Cost in Portugal | Cost in Germany |
|---|---|---|
| One-bedroom apartment in the city center | €719 | €864 |
| Three-bedroom apartment in the city center | €1,296 | €1,598 |
| Groceries | €200 | €250 |
| Utilities | €110 | €244 |
| Transport (Monthly Pass) | €40 | €70 |
| Tennis Court Rent (1 Hour on Weekend) | €11.75 | €20.83 |
Estimates are from Numbeo (as of December 2022).
Taxes
As an expat, it’s essential to calculate various taxation measures in force in the country you’re relocating to, from income taxes to corporate tax and VAT systems. You surely don’t anticipate a legal case in a foreign land.
The good news is that while living in Portugal, you can take advantage of the Non-Habitual Resident Tax Regime. Portugal’s tax regime successfully benefits foreign residents with up to 10 years of tax incentives.
Applicants must be EU/EEA/Swiss citizens or have the right to reside in Portugal through Visa schemes such as the Portuguese Golden Visa.
Calculating and collecting taxes is always a hurdle living in a foreign country. In Germany, foreigners pay the same taxes as Germans. Germany has six tax brackets, and the tax bracket decides the amount of income tax and surcharges you will pay.
For example, a foreigner earning a gross salary of €40,000 will likely pay 36% of his earnings as tax. At the same time, arrangements exist for people subject to double taxation in Germany and their native country. Many countries, including the United Kingdom, the United States, New Zealand, and Australia, have bilateral tax treaties with Germany. The same is the case with Portugal.
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Transport
Germany’s transport system is known worldwide, and its high reputation stems from the fact that it is dependable, comfortable, and relatively speedy.
Larger cities have more public transit options than smaller towns, yet even the smallest villages have a bus system. Schedules, ticket prices, and possible discounts are all detailed on the different official websites. Transportation is relatively developed and cheaper in Germany.
In contrast, every major city in Portugal is interconnected by train system. Train tickets in Portugal are reasonably priced. Lisbon and Porto have very well-maintained, well-managed, and safe underground metro systems; Metropolitano de Lisboa in Lisbon and Metro do Porto in Porto.
Lisbon and Porto are the only two cities that currently have a subway, but the public bus and tram system is very common elsewhere. Public transport in Portugal is also comfortable and cheap, but less advanced than in Germany.
Climate
Portugal’s pleasant climate makes the country highly appealing. Most of the time, it’s bright and mild. The temperature is neither too hot nor too cold. You can imagine relishing the breezy winds running across your face while admiring the country’s beautiful architecture.
The same can not be said about Germany, where the weather is typically harsher. As a country where natural areas, outdoor activities, the countryside, and the seaside are culturally valued, Portugal also has a higher quality of life.
Here are the average temperatures during different seasons:
| Country | Spring | Summer | Autumn | Winter |
|---|---|---|---|---|
| Portugal | 15.4 ºC (59.72 ºF) | 22.4 ºC (70.52 ºF) | 18.1 ºC (64.58 ºF) | 11.8 ºC (53.24 ºF) |
| Germany | 9.7 ºC (49.4 ºF) | 19.8 ºC (67.7 ºF) | 10.4 ºC (50.7 ºF) | 0.5 ºC (33 ºF) |
Data is from Climate Data.
Security
Despite countless measures across the globe, crimes are on the rise, and one cannot avoid becoming a victim. However, you can only be thoughtful of your decision to spend your retirement in Portugal or Germany. According to the Global Peace Index, Portugal is ranked as the fourth most peaceful country in the world, while Germany is #17. Portugal has a lower number of crimes as compared to Germany.
Furthermore, crimes like theft and pick-pocketing always persist in tourist places. You must be aware regardless of where you’re retiring.
Entertainment
Entertainment is defined differently by everyone. You might have perceived Germans as party people, but according to a survey, most germans spend their time at home or watching television. Nonetheless, there are multiple festivals held around the country.
And, if you like alcohol, Germany is known for its beers. You can find many beer tastings, including local breweries and pubs.
With Portugal, it’s different. It’s full of life and activities catering to people from different backgrounds and interests. From swimming in the Atlantic Ocean, exploring Serra da Estrela, bathing in the sun on a beach, and visiting castles and historical monuments, Portugal is fun and homely. You’ll often find people sitting in outdoor cafes or playing gold somewhere in the Algarve region.
How to get a visa in each country
Are you excited to move to either of these two? The next move is to apply for a Visa!
Portugal offers two routes to move to Portugal as a retiree; Portugal D7 Visa and the Golden Visa. To get a D7 Visa, applicants must prove a passive income outside of Portugal of not less than €705 monthly. Passive income can be of any nature, like a pension, rental income, or a remote job salary.
All the Visa formalities take place in your country of residence, including submitting the required documents. The Visa allows two entries for four months. After arriving, you must apply for a Residence Permit with the Immigration and Board Service (SEF).
Another feasible option is a Golden Visa. It is most suitable for investors looking to put their money into an investing activity to get additional benefits. Read our article on applying for Golden Visa for more details.
On the other hand, citizens of other EU states can enter Germany with their passports which entitles them to the right to live and work here. Non-EU citizens must get a German Visa to enter the country and then apply for a residence permit.
In Germany, two residence permits are available: A temporary Resident Visa and Long-term Resident Visa (also known as the National Visa). Temporary residence permits are for applicants who want to stay in Germany for a shorter period. Once you have stayed in Germany for at least five years, you can apply for a permanent resident Visa.
Bottom Line: Retirement in Portugal or Germany?
We hope this article helped clarify what spending your retirement in Portugal or Germany feels like. Although it’s impossible to know without going on a scouting trip in either country, you might have a clearer idea than you did before.
If you’d like to talk to other expats who have been through the same process as you, join our Facebook Group – All About Portugal For Expats, and ask other retirees questions they had before starting their journey. Did they choose to retire in Portugal, or did some relocate to Germany? Explore your opportunities and make your dreams come true.
Our experts will be waiting for you whenever you’re ready to start your relocation process to Portugal. Whatever stage you may be, we can help take the burden off of you and onto us! Sit back and relax while Viv Europe works on changing your life forever!
