Portugal is one of the top retirement destinations in the world, offering South African expat retirees a wonderful quality of life, excellent food, an affordable cost of living and the chance to spend their golden years enjoying their South African retirement annuities in the sunny climate and beautiful countryside of Portugal. If you are planning on retiring to Portugal, here are some of the inviting areas you can consider settling in:
Porto and Northern Portugal
This is the oldest region of Portugal and was founded by D Afonso Henriques in 1139 and it is currently the most populated region of the country. For retirees who enjoy hiking and mountain walks, northern Portugal has plenty to offer with several natural parks and a mountainous terrain. However, this region is not all about the mountains, there is also a coastline with more than 100km of great beaches for you to enjoy soaking up the sun.
The biggest cities in this region are Porto (the second biggest city in Portugal), Brag, Viana do Castelo and Vila Real. The advantage of this region is that the price of real estate is relatively low and there is an excellent road infrastructure that is well maintained. There is also a city airport in Porto.
Centre of Portugal
The centre of Portugal has a similar coastline to Northern Portugal with more than 290km of beautiful beaches. Here you will find the only ski track in Portugal and many authentic villages that are almost frozen in time. The biggest cities are Aveiro, Viseu, Guarda, Coimbra, Castelo Branco and Leiria. Like Northern Portugal, this region also has an excellent road infrastructure and affordable real estate – although Coimbra is reportedly slightly more expensive.
Lisbon and Tagus Valley
The Lisbon region is the second most populated region of Portugal and is also considered to be the wealthiest. In this region you’ll find the famous Portuguese capital, Lisbon, home to wonderful beaches, natural parks and many World Heritage sites. This dynamic region is ideal for retirees looking for plenty of culture, although the cost of living in this region is the highest in Portugal.
The Algarve is world-renowned for its incredible beaches and weather and is the most popular tourist region in the whole of Portugal. Interestingly, it is also one of the smallest and wealthiest regions in the country. Real estate in this region is higher than the rest of the country as is the cost of living. However if you are looking for familiar faces, you’ll find a large expat community enjoying the Algarve, which experiences the sunniest days in the whole of Portugal.
How to retire in comfort in Portugal
If you are planning to retire in Portugal, you are able to access your South African retirement annuity abroad – even before you turn the age of 55 – due to a change to tax legislation that came into effect in 2008. The only proviso is that you have financially emigrated from South Africa. Financial emigration does not change your status as a South African. You and your partner will still have South African citizenship and your South African passports. What’s more, financial emigration can take place at any time – on your exit from South Africa or many years after you have chosen to live abroad.
The benefits of cashing in your retirement annuity
Cashing in your retirement annuity and moving your funds abroad affords you with many financial opportunities:
- You can withdraw all your funds without incurring any early withdrawal product penalties as long as you pay the withdrawals tax liability
- You can use your retirement annuity funds for any purpose in Portugal – whether you wish to top up your existing retirement funds or invest in a new home or enjoying your lifestyle.
- Withdrawing your funds helps protect them from the volatile effects of the rand – and if you withdraw your funds at a time when the rand is trading strongly against your new currency, you will benefit even further.
- If you plan to retire overseas, withdrawing your retirement annuity means you can utilise it in the currency of your new home, which simplifies life because it allows for the better matching of assets to liabilities when calculated in the same currency.
At FinGlobal we have helped thousands of South Africans living abroad cash in their retirement annuities so they can make the most of their retirement abroad. To find out more about how we can assist you with this process, contact us today.