This southern region of Portugal came in second in the annual Overseas Retirement Index by Live and Invest Overseas. Boquete in Panama took first place, while the Algarve ranked ahead of destinations such as Puerto Vallarta in Mexico, Gascony in France, Crete in Greece, and Tarragona in Spain.

The ranking considers several factors, such as cost of living, healthcare, safety, climate, infrastructure, property options, residency rules, and the strength of local expat communities.

The report highlights the Algarve’s climate, its well-established international community, and its easy access to the rest of Europe. English is also commonly spoken, especially in places with many foreigners.

The organisation estimates that a couple living the way described in its ranking would need about $3,085 per month to live in the Algarve. This number is just a guideline, since actual spending can vary a lot depending on whether you live inland or in a popular coastal area.

A familiar favourite

This latest ranking is just one of many times the Algarve has been recognised internationally as a great place to retire.

Live and Invest Overseas has recommended the Algarve for years. Its 2026 list features six European destinations, with the Algarve in Portugal ranked the highest.

The organisation notes that the Algarve’s long coastline, mild weather, and strong foreign community are some of its main advantages.

Healthcare is another factor. Retirees living legally in Portugal can access the country’s public health system under the applicable rules, while the Algarve also has a growing network of private healthcare providers.

The region’s connectivity is another attraction for people moving from North America. Faro Airport provides direct links to a range of European cities, making it relatively easy for residents to travel to other parts of the continent and return home.

However, the Algarve is no longer the low-cost retirement destination it was a decade ago.

Property prices and rents have risen substantially, particularly in coastal areas such as Lagos, Albufeira, Vilamoura and parts of the eastern Algarve. The cost of living can therefore vary sharply depending on where someone chooses to live and the lifestyle they want.

The ranking itself acknowledges that costs have risen, while still considering the Algarve competitive compared with many other desirable coastal destinations.

For prospective retirees, residency requirements are also an important part of the decision. Portugal offers several routes for establishing legal residence, including the D7 visa for those with qualifying passive income.

The 2026 ranking demonstrates the continued appeal of the Algarve to international retirees, even as the region faces the same pressures as much of Portugal: rising housing costs, pressure on public services and increasing demand from foreign residents.

For those able to meet the costs, however, the combination of climate, healthcare, safety, coastline and established international communities continues to put the Algarve near the top of the global retirement map.