Retirement - Spain or Portugal?

For residents of Spain.
FamilyMan
Posts: 110
Joined: Sat Nov 29, 2008 12:09 pm

Re: Retirement - Spain or Portugal?

Post by FamilyMan »

I enjoy this blog about 2 Americans who moved to Spain and talk about their life. I do think they plan on moving back to the US post COVID but their previous European experiences are interesting.

http://yourthirdlife.com/
coffeeblack
Posts: 770
Joined: Wed Jun 19, 2019 10:20 am

Re: Retirement - Spain or Portugal?

Post by coffeeblack »

cinghiale wrote: Sun Jul 21, 2019 12:06 pm Any consideration of living in Spain fewer than 183 days each year? You could then live where you want (Madrid is big and expensive, with hot summers and cold winters... think Indianapolis) and be unbothered by having to file either Spanish income or wealth taxes.

Our current strategy, now four years along, is as follows: We fill out IRS Form 8802, “Application for United States Residency Certification” each year. The IRS provides this residency certification on Form 6166, a letter of U.S. residency certification. That demonstrates that we are fiscal residents of the US. Also, we keep all key communications (taxes, credit cards, etc.) tied to a US address and visit the US each year for around 1-1.5 months. During the US visit we get our US taxes filed and take care of any necessary medical, dental, or administrative appointments. There’s also a pile of mail to open.

And then, we are fulfilling a long time dream of seeing the rest of Europe with the remaining time that gets us to 183 days.

Now, that plan may not have that much appeal, but please consider the following. Per your own calculations, the wealth tax would likely nick you for 12K. That amount of money can underwrite a whole lot of cheap airfares (Vueling, EasyJet, Ryanair, etc) and a whole passel of lodging options (Air B&B, Booking.com, etc.). Again, YMMV, but with early retirement, sufficient resources, and good health, you might want to put this option on the table.
How do you get around the 90 day stay EU rule?
leftcoaster
Posts: 741
Joined: Mon Jul 23, 2007 4:04 pm

Re: Retirement - Spain or Portugal?

Post by leftcoaster »

Which countries would be ideal for our situation?

Spouse is a German citizen with US permanent residency. I’m a U.S. citizen.

She’s fluent in German and I can muddle through. I’m fluent in French. She’s passable.

We are in the SF Bay Area and uninterested in cold weather. Proximity to beaches is great. Would like to avoid wealth taxes if possible.

In an ideal world Id go for the south of France. What’s the tax hit there?
wineandplaya
Posts: 306
Joined: Fri Sep 14, 2018 9:42 am

Re: Retirement - Spain or Portugal?

Post by wineandplaya »

For retirement in Portugal, it's good to be aware of the current tensions within Europe that taxation for retirees is too low in some countries. Currently, someone working in Sweden can get set aside money for retirement without paying income taxes, then move to Portugal and withdraw the money tax-free in retirement. At least the government of Sweden appears to be pretty determined to put an end to this, with or without Portugal's cooperation. They recently decided to cancel the double taxation agreements with both Portugal and Greece at the end of 2021:

https://www.regeringen.se/pressmeddelan ... -grekland/ [In Swedish]

This in particular will mean a 25 % non-resident tax paid in Sweden for any retirement income from Sweden, even if you are a Portuguese resident.
Stork
Posts: 175
Joined: Wed Feb 17, 2021 9:44 am
Location: Portugal (EU)

Re: Retirement - Spain or Portugal?

Post by Stork »

wineandplaya wrote: Mon May 24, 2021 11:27 am
This in particular will mean a 25 % non-resident tax paid in Sweden for any retirement income from Sweden, even if you are a Portuguese resident.
Quite logical, as they can't discriminate between (EU) nationalities.
SouthernInvestor
Posts: 113
Joined: Thu Jul 15, 2021 6:13 am

Re: Retirement - Spain or Portugal?

Post by SouthernInvestor »

I think many expats simply don't file taxes abroad. I don't think that I would sleep well at night with that approach and I think readers of this site tend to be unlikely to take that risk, but that seems to be the case with my friends in latin america.
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