Planning the best financial outcome for Portuguese retirement

A critical part of preparing for retirement in Portugal is understanding the local retirement system and how it works. Here's what you need to know:

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Portugal's State Contributory Retirement Pension

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In Portugal, the Contributory Retirement Pension is the primary type of state pension. This pension is based on the number of years you have contributed to the Portuguese Social Security system and your average earnings over your working lifetime.

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Eligibility Criteria

To be eligible for the Contributory Retirement Pension, you must:

1. Be at least 66 years and 5 months old (as of 2022, but this age increases slightly each year).
2. Have made contributions to Portuguese Social Security for at least 15 years.

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Early Retirement

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Early retirement is possible under certain conditions, but it generally results in a reduction in the amount of pension received.

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Voluntary Social Insurance

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If you're self-employed, a freelancer, or if you're not covered by mandatory social insurance, you can opt for Voluntary Social Insurance. This allows you to make contributions to the Portuguese social security system to ensure you're eligible for a pension in the future.

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Private Pensions

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In addition to the state pension, it may be beneficial to consider setting up a private pension plan, particularly if you haven't spent your entire working life in Portugal and may not have accumulated sufficient contributions to the state system.

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Seeking Professional Advice

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Planning for retirement in a foreign country can be complex, particularly if you have assets and pensions in different countries. It's strongly recommended to seek advice from one of our experts to ensure you're making the most of your retirement funds and minimising your tax liabilities.

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Remember, the sooner you start planning for your retirement or review your existing retirement plan, the more comfortable and stress-free your retirement years will be. Portugal, with its attractive lifestyle and beneficial retirement system, is certainly an excellent place.

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Disclaimer: The guidance above should not be fully relied upon and does not constitute formal instructed professional advice. In relation to tax advice in Portugal, please engage and instruct a regulated professional for all tax advice and structured financial planning. Please contact Portugal Pathways if you would like an introduction to one of our professional advisors.

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