Portugal’s government has officially announced that the legal retirement age will reach 66 years and 11 months by 2027, continuing a steady upward trend that began in 2014. This latest adjustment, published in a government decree, affects anyone planning to retire under Portugal’s general social security system without penalties.
The change represents a significant shift from the retirement age of 65 that remained stable until 2013. Since then, Portugal has implemented an automatic adjustment system that ties retirement age directly to life expectancy data, creating ongoing changes that workers and expats must factor into their long-term planning. For those considering remote work in Portugal through digital nomad visas, understanding these retirement system changes becomes crucial for comprehensive financial planning.
2025: 66 years 7 months
2026: 66 years 9 months
2027: 66 years 11 months
Early Retirement Penalty: 17.63% sustainability factor + 0.5% per month early
How Portugal Calculates Retirement Age
Since 2014, Portugal’s retirement age has been indexed to life expectancy at age 65, a mechanism designed to ensure the long-term sustainability of the public pension system. According to official data from Portugal’s National Statistics Institute (INE), life expectancy data for 2023-2025 shows an average of 20.19 years for someone reaching 65 – an increase of 0.17 years compared to the previous period.
This statistical increase automatically determines the 2027 retirement age of 66 years and 11 months. The progression shows the system’s sensitivity to demographic changes: after dropping to 66 years and 4 months in 2023 due to pandemic impacts, the retirement age rebounded to 66 years and 7 months in 2025, then 66 years and 9 months in 2026.
“Portugal’s automatic retirement age adjustment system ensures pension sustainability but requires workers to continuously adapt their retirement planning to demographic realities” – Portuguese Social Security Institute, 2024
Early Retirement Penalties Increase
The same decree introduces harsher penalties for early retirement. In 2025, workers choosing to retire before the legal age will face a 17.63% reduction in their pension due to the social security sustainability factor. This factor calculates the ratio between life expectancy at 65 in 2000 (16.63 years) and life expectancy in the year preceding retirement.
These sustainability penalties stack with standard early retirement reductions of 0.5% per month of early retirement. For someone retiring two years early, this creates a double penalty: approximately 12% for the months of early retirement plus 17.63% from the sustainability factor, totaling nearly 30% in pension reductions.
• Original pension: €1,000/month
• 24 months early penalty: 12% reduction
• Sustainability factor: 17.63% reduction
• Final pension: approximately €700/month (30% total reduction)
For expats who have built careers in Portugal or are considering the country for retirement, these penalties represent substantial financial impacts that require careful planning. A monthly pension of €1,000 would drop to approximately €700 under these combined penalties.
Exceptions and Alternatives
Portugal maintains several exceptions to these penalties, particularly relevant for long-career workers. Those who reach 60 with 48 years of contributions can retire without penalties, as can workers who started before age 16 and have 46 years of contributions.
Professions classified as physically demanding or subject to rapid wear also qualify for penalty-free early retirement. Additionally, workers with over 40 years of contributions can access “personal retirement” with a four-month reduction in the legal retirement age for each additional year worked beyond the minimum requirement.
This personal retirement mechanism can allow some workers to retire before 65 without any penalties, provided they have sufficient contribution years. For expats who began working in Portugal later in life, accumulating these contribution years may prove challenging.
| Retirement Option | Age Requirement | Contribution Years | Penalties |
|---|---|---|---|
| Standard Retirement | 66 years 11 months (2027) | 15 years minimum | None |
| Long Career (48 years) | 60 years | 48 years | None |
| Long Career (46 years) | Started before 16 | 46 years | None |
| Early Retirement | 62+ years | 15+ years | 0.5% per month + 17.63% sustainability |
Impact on Expat Planning
These changes particularly affect expats who have built substantial careers in Portugal’s social security system. Those who moved to Portugal in their 30s or 40s and planned retirement around the previous age limits must now recalculate their financial timelines.
Expats should also consider how these changes interact with other retirement income sources. Many rely on a combination of Portuguese social security, private pensions from previous countries, and personal savings. The delay in Portuguese pension eligibility may require bridging strategies or extended work periods.
For newer expats, especially those arriving through programs like the D7 visa or Digital Nomad visa, understanding Portugal’s evolving retirement landscape becomes crucial for long-term planning. The automatic adjustment system means retirement ages will continue changing based on life expectancy data.
• Track contribution years carefully – Portuguese system rewards long careers
• Consider totalization agreements with home countries for combined benefits
• Plan bridging income for gap between desired and legal retirement age
• Monitor annual INE life expectancy reports for future age adjustments
Looking Toward 67
If life expectancy continues improving, Portugal’s retirement age will likely reach 67 by 2028, joining many European countries that have already adopted or planned similar increases. This represents a fundamental shift in Portugal’s approach to retirement, moving from the traditional 65-year threshold toward a more dynamic, demographically responsive system.
The changes reflect Portugal’s broader economic modernization but also highlight the challenges facing workers who began their careers under different assumptions. For the Portuguese system, historically characterized by modest pensions and incomplete careers, these adjustments represent a significant structural change.
Expats planning their Portuguese futures must now factor in not just current retirement ages but the likelihood of continued increases. This makes comprehensive financial planning even more essential, particularly for those who may not qualify for the long-career exceptions that protect some workers from the harshest impacts of these changes.
The Portuguese government’s approach emphasizes long-term sustainability over short-term convenience, creating a system that automatically adjusts to demographic realities while placing greater responsibility on individuals to plan for extended working lives.
