How your US retirement income is taxed here.
These come straight from the same country data the Glidepath engine uses to calculate your tax. Not a marketing summary.
The old 10% deal is gone. NHR is closed to new movers, and its replacement, IFICI, excludes pensions. So a new retiree pays standard progressive IRS on IRA/401(k) draws - up to 48%, plus a 2.5–5% solidarity surcharge (about 53% at the top), not the old 10%.
US Social Security is taxed by both countries. The treaty (Article 20(1)(b)) lets the US tax it, but does not stop Portugal taxing it too - unlike Article 20(1)(a)'s residence-exclusive language for private pensions. Portugal taxes it as ordinary Category H pension income on the progressive scale, and gives you a credit for the US tax you paid on it (Article 25) so you are not taxed twice on the full amount.
Roth accounts are not tax-free in Portugal. There is no Portuguese ruling recognizing Roth's US tax-free character, so the plan taxes the full Roth withdrawal as pension income on the progressive scale. Practitioners sometimes argue a return-of-capital split that would tax only part of it, but no binding authority confirms that for a Roth; a toggle models the favorable untaxed case.
Capital gains and dividends are taxed at a flat 28% (you may elect the progressive scale instead). There is no wealth tax on foreign assets. Portugal’s extra property tax (AIMI) applies only to Portuguese real estate - 0.7% on the portion of its value between €600,000 and €1M, 1% up to €2M, and 1.5% above that. This plan includes AIMI automatically on a home you buy at your Portuguese destination; it does not apply to real estate you keep elsewhere.
The plan models Portugal's mínimo de existência (income-tax code art. 70), the relief that keeps a small pension almost entirely out of IRS (a residual of roughly €250 can remain, because the general-expenses credit the statute nets that residual against needs receipts the plan does not collect). It is worth most up to about €12,880 of income, then tapers off, and is gone by roughly €16,500. It applies only if your income is mostly pension or salary, and the test counts everything you receive, taxed or not - including capital gains and dividends taxed separately at 28%. The plan still does not model expense-based deductions for health, education, or housing, which need receipts and household details we do not collect, so your real Portuguese bill may be somewhat lower than shown. An accountant can size the remaining gap for your situation.
What could change this.
Portugal has never ruled on Roth accounts; the plan taxes the full withdrawal as pension income, but the true bill could be lower.
When: No ruling; filing-position dependent
There is no special tax break left for retirees, so a new arrival pays full Portuguese income tax. Rates and thresholds can also rise.
When: NHR closed 2024; rates set annually in the State Budget
Compliance traps that catch US retirees here.
Investment products that look ordinary to locals can be tax traps for US citizens. These are the ones specific to Portugal.
The Portuguese PPR retirement wrapper can be a PFIC / foreign-insurance complication
For an American, a Portuguese PPR account usually means punitive US tax and heavy IRS paperwork, with no US benefit. A US tax specialist can confirm before you open one.
IFICI excludes pensions - a new retiree pays full progressive IRS, not 10%
Expect to pay Portugal's full progressive income tax on your IRA/401(k)/pension draws - up to 48% plus solidarity - because no special regime now shelters a retiree's pension.
Locally domiciled (Portuguese/EU UCITS) funds and ETFs are PFICs
The EU funds and ETFs Portuguese banks offer are each a PFIC for a US person. One option is to set up US brokerage custody before you move.
US Social Security is taxed by both the US and Portugal
Both countries can tax your US Social Security - Portugal credits the US tax you paid, so you are not taxed twice.
Healthcare as a retiree.
Portugal's public health service is the SNS. Once you hold a residence permit, NIF, and proof of address, a D7 or other legal resident can register at their local centro de saúde (neighborhood health center). After that you use the system on the same terms as locals - free or low-copay, with over-65s exempt from many copays. The D7 visa itself requires private or international insurance (at least €30,000 of cover) at the start and until you register with the SNS. Many retirees keep private cover afterward for faster access to specialists.
SNS access is essentially free once you register. Private or expat insurance - needed for the visa and useful for faster private care - runs about €400–€1,000 per person a year (~$450–$1,100) for younger retirees, and rises with age. Comprehensive international plans run $2,000–$3,000+. The ~$1,200 figure used here is a mid-range estimate. Over-70 or worldwide cover generally costs more.
Models the SNS (free) plus the dual private policy most settled retiree couples keep (about €5,100–€7,500 a year per couple, all-in). SNS-only couples spend about €1,500–€3,000 a year. Comprehensive cover past age 75 may be unavailable to new entrants.
The retirement visa route.
The D7 is Portugal's residence visa for people who live on passive income, such as pensions or investments. It is the usual route for retirees.
- Stable foreign passive income of about €920/month (~€11,040/year, tied to the minimum wage).
- Add 50% for a spouse and 30% for each dependent child.
- Proof of accommodation in Portugal, owned or rented.
- Valid health insurance with at least €30,000 of cover, valid in Portugal and the Schengen area.
- About 1 year of private health insurance until your residence permit is issued and SNS registration begins.
What could this cost you?
A fast, illustrative estimate for Portugal - no login, nothing stored. Every country page carries its own, tuned to that country's tax treatment.
Your monthly spending power in Portugal on about $1M
These odds are about a withdrawal this size holding up over time - not about how far that amount goes here.
A lean lifestyle in Portugal
Day to day, that looks like a small apartment in a lower-cost town, transit or one older economy car, cooking at home with the odd cheap meal out. For health, the public health system, with out-of-pocket costs a real worry.
As a US citizen, you keep filing US taxes wherever you live.
Portugal: US treaty: foreign tax credit (pay the higher of US or Portugal tax, never both)
This is a fast estimate, not the full simulation, and not financial advice. It only flags the tax question. The full plan works out what you'd actually owe on each side of the border. It also models real balances, every account type, and healthcare, year by year.
The terms you'll run into.
- IRS
- IRS (Imposto sobre o Rendimento das Pessoas Singulares) is Portugal’s progressive tax on worldwide income: 13%–48% for 2025, plus 2.5% solidarity over €80k and 5% over €250k. Without a special regime, a retiree pays it on IRA/401(k)/pension draws.
- NHR (Non-Habitual Resident)
- The former 10-year regime that taxed qualifying foreign pensions at a flat 10%. It closed to new entrants after 31 December 2023, so a retiree relocating today cannot use it.
- IFICI / NHR 2.0
- The narrower 2024 replacement for NHR. It gives a 20% flat rate on qualifying science, innovation, or high-value work, and broadly exempts foreign income - but not pensions, so it does not help a passive retiree.
- D7 Visa
- Portugal’s passive-income/retirement residence visa. It requires stable foreign income (~€920/mo, +50% spouse, +30% per child) and valid health insurance.
- SNS
- Serviço Nacional de Saúde - Portugal’s tax-funded national health service. Any legal resident, including D7 retirees, can register for it, with care free or low-copay.
- NIF (Número de Identificação Fiscal)
- Your Portuguese tax ID number. You need it to open accounts, sign a lease, and register for health care.
- PPR (Plano Poupança-Reforma)
- Portugal’s tax-advantaged personal retirement savings wrapper (a fund or insurance contract). It is locally tax-favored but a potential US-tax complication for Americans.
US terms that follow you to every country
- PFIC
- Passive Foreign Investment Company - the IRS label for almost any non-US fund, ETF, or pooled investment. Owning one triggers punitive US tax rates and Form 8621 paperwork. The single most common trap for Americans investing abroad.
- FBAR
- Foreign Bank Account Report (FinCEN Form 114). A yearly online filing that lists your non-US accounts once they total over $10,000. Not a tax - just a report - but penalties for skipping it are severe.
- FATCA
- A US law that makes foreign banks report American customers to the IRS. It is why some foreign banks refuse US clients, and why you may also file Form 8938 with your return.
- Form 8621
- The IRS form you must file for each PFIC you own. Complex enough that most preparers charge per form, per year.
- Form 8938
- The FATCA companion form filed with your US return, listing foreign financial assets above a threshold. Overlaps with, but does not replace, the FBAR.
- Forms 3520/3520-A
- US reporting forms for foreign trusts. Some foreign retirement and insurance wrappers count as trusts, dragging their owners into this heavy annual paperwork.
- UCITS
- The standard European fund format (an EU regulatory label). Fine for Europeans - but to the IRS, a UCITS fund is a PFIC.
- Totalization agreement
- A US bilateral deal that stops you paying Social Security tax to two countries on the same work, and lets work credits in each country count toward one benefit.
- Foreign tax credit
- The US mechanism that stops double taxation: tax you pay to your residence country offsets your US bill on the same income, dollar for dollar. You effectively pay the higher of the two totals - not both.
- Saving clause
- The clause in every US tax treaty that lets the US keep taxing its own citizens as if the treaty did not exist. It is why moving abroad never ends US filing.
- Foreign grantor trust
- The IRS classification some foreign pension and insurance wrappers fall into. It means the owner reports the trust personally, on Forms 3520/3520-A, every year.
Nothing on this page is invented.
Confidence: verified. Last verified June 1, 2026. Every figure above comes from one of the sources below - the same country data the full plan uses to compute your projection.
See the full country-by-country build sheet on the coverage page.