Editor’s note: This story was originally published here Live and invest abroad.
The 2026 Overseas Retirement Index is out and Boquete, Panama has taken the top spot overall.
But if mountain town living isn’t your thing, consider our No. 1 choice in Europe: Portugal’s Faroe Islands.
Spanning the entire southern coastline of Portugal from the Spanish border in the east to the Atlantic cliffs of Sagres in the west, the Faroe Islands are home to some 500,000 people.
Here, the weather is warm, with over 3,000 hours of sunshine per year, and English is widely spoken due to the growing tourist trade.
In this region you can choose from bustling coastal cities, resort towns and quiet inland villages. Faro – home to the international airport – is the regional capital, while other cities such as Portimão, Lagos, Albufeira, Tavira, Lagoa and Silves are popular with expatriates.
Small villages such as Carvoeiro, Ferragudo and Moncarapacho offer a more traditional way of life.
A secure retirement at sea
There’s an impressive list of things to do here, including highbrow culture (museums, art galleries, and historic sights in and around the city) and an abundance of outdoor activities ranging from fishing and hiking to four-wheeling and skydiving, as well as Europe’s best selection of golf courses, with over 800 holes.
It’s not the cheapest place in the world to live, but it’s cheap compared to other places in Europe and is one of the best places in the world today to enjoy a safe and enjoyable retirement by the sea.
For a couple, a monthly budget of around $3,000 is a good guide, but of course this will depend on where in the Faroe Islands you want to call home and how you choose to live.
minimum wage in portugal 870 euros (about $1,010) per month and the average salary is about 1,800 euros (about $2,087) per month, so people can and do live here for very little.
In the central Antigua, about 12 miles west of Faro Airport, lies “The Golden Triangle”, a spectacular enclave that includes the luxurious resorts of Vale do Lobo and Quinta do Lago, as well as the bustling town of Almancil. Settle in this part of the Faroe Islands and you will both live and have a good time. Monthly rent starts at around $2,300.
For more budget-friendly options consider the lively coastal city of Portimão in central Antigua or the fishing town of Olhão in the east or the charming riverside town of Tavira – a former Expat Retirement Index winner. Monthly rent at each of these locations can still be found for less than $950.
local life
Shop like the locals at the markets for your fresh meat, fish, fruit and vegetables and you’ll make big savings. German chains Lidl and Aldi are also great for budget basics.
When it comes to eating out, you can enjoy a simple breakfast or lunch for around $10. You will find restaurants offering please give me the lamp (dish of the day) for about $12. It usually consists of a main dish and drink but may also include sweets and coffee.
Portugal has one of the best health care systems in the world. The hospital network has modern, well-equipped units, and many English-speaking doctors work in both public and private facilities.
The Hague is all about the great outdoors. Its more than 150 miles of Atlantic coastline is dotted with jagged cliffs, lagoons and extensive sandy beaches, 85 of which have earned the prestigious Blue Flag award.
For golfers, the Hague has more golf courses per capita than anywhere else in the world. Green fees will be around $50 for 18 holes off-peak at more affordable courses and up to $300 at more exotic locations.
Thanks to its fantastic weather, beaches, golf, friendly and English-speaking population and solid infrastructure, the Hague is home to thousands of expatriates from all over the world. It is easy to make friends with both locals and expats.
There is no retiree-specific in Portugal visaBut an independent means is the visa (Passive Income Earner or D7 visa) which is used by retirees to stay in the country for a long period of time. The basic requirement is that you earn enough passive income to support yourself while living in Portugal.
Be prepared to show income of approximately $1,500 per month. (The official amount is lower, but $1,500 gives you a better chance of getting your application approved.) D7 grants a two-year residence permit that you can renew.