Part 5. Portugal

The Portugal portion of our story is, unsurprisingly if you’ve actually read parts 1-4, complicated. When we started to sniff around Portugal as a potential Golden Visa target, we found all the things you’ve found if you’ve been doing a similar search. The weather in Portugal is beautiful in most parts. The beaches are exquisite. The people are reputed to be lovely. From a long-term perspective, the government seems relatively stable and forward-looking, the health care stacks up fine in Europe (which means it runs circles around the U.S.)1, the food is not insanely spicy or otherwise difficult to eat… it’s the sweet spot on the chart of cost vs. quality of life. We start to talk around the house like Portugal is “the place.” It feels nice to have some direction. Then we dig down into the details with our financial advisor.

So even before the iconic “read more” page break, we’ve got thoughts, big and small. The beaches are absolutely lovely but do your research because many of them are Atlantic-facing and are too cold to enjoy even in summer for some people. (It’s us. We’re “some people.”) The politics in Portugal are currently wobblier than we’d like, although it’s too soon to say if the country is having a lurch-to-the-right moment or if it’s just a reaction to a recent corruption scandal. That said, we can say from personal experience that health care does indeed run circles around the U.S.; the only thing we can’t speak to are corner cases that we haven’t had to deal with. Should anybody have a “oh yeah, well *I*…” comment forming in your head… I mean, say whatever you want, it’s a free blog, but we never said “perfect”. It says more about the U.S. than it does Portugal that it’s so easy to compare favorably to healthcare there.

I want to be clear – neither Lisa nor I are financial advisors. All I’m about to present is what we believe we learned. This ain’t the kind of thing you should feel educated by from a blog post. So, that said…. what we realized was that there was no efficient way for us to use our retirement investments to fund the Golden Visa (GV). The money for the GV would have to come out of 401(k) funds (not, you know, by law, just how our money is situated), and the penalties for premature withdrawal are brutal. And, even if we used one of the strategies for early withdrawal and it actually worked and we didn’t pay a penalty, taking $600,000 out of your 401(k) all at once means it will be taxed at the top of the brackets. In other words, to get $600,000 we’d have to withdraw ~$800,000 or more (don’t math-nerd me on this stuff, I’m keeping it simple on purpose), and that extra $200k we would basically be setting fire to; we’d never see it again. We’re doing ok, but we’re not doing “set fire to $200,000” ok.

So about the money (again). In classic Americanisms, “doing ok” is describes a reticence to admit that you’ve got significant savings. You read about the median American’s savings towards retirement being $87,000 and have to realize that’s not what we’re talking about. Even the “average” savings account, which means outliers weigh things down disproportionately, is around $330,000. If we had that amount in savings we wouldn’t have felt comfortable doing this, at least not at our age (in our 50s). Maybe in 10+ years, with additional savings and growth, but not when we ended up retiring (late 2021 for anyone keeping track). “Ok” in our case absolutely meant “in good shape for our goals.” And, let’s be clear, we were super lucky to be top earners for a few years and able to add much of it to our retirement accounts as well as paying down our mortgage. Even so, we can’t access much of our accounts until we’re older.

This doesn’t mean you can’t get it done on the average savings amount, just that you probably can’t go about it like we did. We’re done working. Kaput. Most people leaving the US at our age want to think about being a digital nomad, or some other way of continuing to earn while over here (with all the visa and tax implications that entails.) Especially since some of the financial advantages we were able to take advantage of no longer exist (like the NHR scheme). We need to be super clear that we are not consultants with fiduciary responsibility to you – talk to a professional! Talk to several! Then talk to one more. Moving abroad — to any place — is a huge decision that can leave you without resources in a crucial future time.

So, we pivoted to figuring out how we could get post-tax liquidity (that means cash or easily-cashed investments for those of you about as new at this stuff as I am) as fast as possible. We’re talking half a million dollars or so, depending on exchange rates. As I said in Part 4, you aren’t “buying” a visa; your money is invested and there are plenty of legitimate instruments for this. But, you can’t do anything with your invested money for as long as you use the G.V. Since we planned to use it as a path to citizenship, that’s 5 or more years. That’s a long time for that much money to be tied up, for us at least.

For a post entitled “Portugal” I haven’t really talked about the country much, have I? Like I said, it’s a complicated subject for us. As we’ve read about the country we’ve become more and more interested in it. Porto seems to have very Seattle-like weather. At first this appealed to us since we figured we’d have little problem adapting. But then… look, we’ve become trained to respond to bitching about Seattle weather, e.g. “hey, Houston gets more rain than we do!” This is true, and it’s not even close; the difference is Seattle dribbles it out over seven months or so, while Houston just has downpours every now and then. Or, “our summers are the best kept secret!” and this is also true – from July to September or so it’s actually dry, temperate, low humidity… just drop-dead gorgeous really. On the other hand, as I write this in mid-June, we’ve had weather warm enough to not want a comforter on our bed foooooor about 3 days. There just comes a time in May or so where you can’t help but think “shouldn’t it be warm by now?” So, maybe not so much Porto? There are many diverse climates in Portugal, and we’ve investigated many of them. Surely, if we spend a month toodling about the country, and doing plenty of reading besides, we’d Baby Bear this sucker.2 So… yes, at this point in our process, we were not in love with Portugal the way we were with (aspects of) Italy and France.

Dear Lord aren’t we just adorable? For trying to replicate Seattle weather we did about as well as we could hope, in that it’s even hotter down in the Algarve, but hoo boy. Our little Seattle, evergreen trees and rolling green hills acclimatization has taken a beating. We have in fact found an excuse to leave Braga for at least a little while each summer when the heat has been in full bloom.

It’s not the desert or anything, but compared to where we came from it gets warmer earlier and goes higher for longer. Not complaining or anything, but it’s funny to read these assertions from 2021 us.

The next part of this story is, weirdly, a moment that I can remember super-clearly. Lisa and I were sitting in a couple of Queen Anne-style chairs we have (had – sigh, we miss those chairs) in our living room, talking the same things through over and over and driving each other juuuust the teeniest bit insane, when an idea started to form. (Neither one of us can remember who said it first, so we credit one another every time we tell the story.)

“You know… if we’re going to spend the next several years building the funds to get the Golden Visa, running out the clock here in the U.S. while constantly feeling like we’re just waiting for the good part to start… we could, you know, spend that time in actual Europe simply by going the more traditional visa route.”

In other words, instead of going on some insane quest to accumulate a massive amount of “extra” wealth, when there’s no guarantee that jobs or stock/housing markets would cooperate for all that time, we could go immediately; the only “sacrifice” is having to adjust to the moderately more restrictive “regular” visa process. Which, come on now, would mean having the run of the continent for about 9x more time than we normally get these days.3 We just sat and looked at each other for a minute. I mean, this isn’t rocket science, I’m sure plenty of people start from this premise at the beginning of their process. But for us, it was like trying to pick a lock and suddenly feeling the tumblers snap into place. This is how we’re going to do it. And just like that, moving to Portugal switched from a happy dream to consider to … well, if not a guarantee, a much more tangible possibility.

So when are we going? Yeah, that’s a whole story of its own.4

Footnotes:

¹ if you want to debate about the state of U.S. healthcare, do it elsewhere. Lisa went through cancer in the U.S., and we’ve both experienced various minor surgeries, broken bones, and general illnesses over the years. We’ve had parents with ICU-level illness, joint replacements and on and on. We’ve experienced all the vagaries of insurance, and authorizing companies, and all of that nonsense. If you genuinely think the U.S. has superior healthcare, especially considering how much is spent on it, nothing we can say will convince you and nothing you can say to us can drag us back into delusion-land.

² “This part of Portugal is too warm… this part of Portugal is too cold… this part of Portugal is juuuuuust right!”

³ We vacation in Europe approximately every 3 years for about 20 days, give or take. At the most restrictive period of the “normal” visa process we will get ~60 days in every year that we can be out of Portugal, so 180 days in that same 3-year period. And of course, when we aren’t wandering the rest of Europe we’re still free to rummage through Portugal to our hearts’ content.

Boy oh boy. We traveled our little heineys off in the first year or so that we were here, and the results were that a) we were actually a little tired of traveling, to the point where, more than a year later, we haven’t done any similarly-significant trips. Make no mistake, we’ve traveled when we’ve wanted to, we just discovered that there was in fact an upper bound to our appetite for adventure. And b) we didn’t scratch our limit of time-out-of-country with that amount of traveling. It’s both a relief and a bit of a humbling experience to discover that our idea of “lots” of travel is not in fact pushing all boundaries of sense. We have friends here that are out of country more than we are. They just don’t advertise it in a big dumb blog so people don’t notice so much.

⁴ Sorry not sorry about all the footnotes. You’ve probably noticed that I can be an incredibly parenthetical talker, and it just occurred to me that this might be a more interesting way to format my longer digressions.⁵

⁵ I wish I hadn’t forgotten about this footnote thing – it’s not like I’ve become less parenthetical over the years. Hrm….