Planning for retirement is one of the most important goals you can set to prepare for your golden years of financial freedom. Knowing how much money you’ll need to retire comfortably depends on factors like your lifestyle, where you live, and how long you plan to stay.

Here’s what to consider when estimating your retirement savings target in Spain.

Understand the cost of living in Spain

Spain is known for its moderate cost of living compared with many Western European countries. However, expenses vary widely depending on where you plan to retire.

For example, life in Madrid or Barcelona can cost considerably more than in smaller cities or rural areas. According to Numbeo, the average monthly cost of living for a single person (excluding rent) ranges between 800€ and 1,200€, while rent can add another 700€ to 1,500€, depending on location.

When building your retirement budget, include recurring costs such as:

• Housing (rent or maintenance if you own property)

• Utilities and internet

• Food and groceries

• Healthcare and insurance

• Transportation

• Leisure, travel, and hobbies

Factor in Spain’s pension system

If you’ve worked and paid Social Security contributions (Seguridad Social) in Spain, you may qualify for a state pension (pensión pública). The amount depends on your contribution history and years of work.

As of May 2025, the average public pension in Spain is 1,562.20€ per month, according to data from the Ministry of Inclusion, Social Security, and Migration.

Expats who have worked in multiple EU countries can usually combine contributions through agreements within the EU or bilateral treaties. If you’re self-employed (autónomo), your pension will depend on your contribution base, so it’s essential to review your payments to ensure you’re building sufficient entitlement.

Estimate how much you’ll need monthly

A general rule of thumb is that retirees need 70% to 80% of their pre-retirement income to maintain their lifestyle.

Let’s say you earn 40,000€ per year before retirement. To live comfortably, you may need around 28,000€ to 32,000€ annually, or roughly 2,300€ to 2,700€ per month.

If you receive an average public pension of 1,562.20€ per month, you would need to cover an additional 700€ to 1,100€ monthly from your own savings or private income.

How much to save for retirement in Spain

Here’s a rough estimate of how much you might need to save, depending on your lifestyle and where you plan to retire. These figures assume retirement at age 65 and life expectancy of around 85 years, meaning 20 years of retirement.

Remember, everyone’s situation is different. If you have no mortgage or live in a low-cost area, your savings target can be significantly lower. Conversely, if you plan to retire early, follow the Financial Independence, Retire Early (FIRE) movement, or live in a major city, you’ll likely need more savings to support your goal.

Build private savings and investments

Relying solely on the state pension may not be enough to secure the lifestyle you want. Many residents and expats in Spain supplement their income through private pensions (planes de pensiones), investment funds, or real estate.

Consider diversifying your savings across:

• Private pension plans: Tax-advantaged products for long-term retirement saving.

• Investment funds or ETFs: Offer flexibility and potential growth, though with market risks.

• Real estate investments: A common choice in Spain, providing rental income or long-term value.

When choosing where to invest, take into account your risk tolerance, time horizon, and tax implications.

Don’t forget about taxes

Retirement income in Spain such as those from pensions, investments, or rental properties is subject to taxation. Residents are taxed on their worldwide income, while nonresidents are only taxed on Spanish-sourced income.

Consult a financial advisor familiar with Spanish tax laws to structure your retirement income efficiently and take advantage of available deductions or exemptions.

Start planning early

The earlier you start saving, the easier it will be to reach your retirement goals. Compound interest can significantly increase your returns over time, even with modest monthly contributions.

If you’re in your 30s or 40s, setting aside 10% to 15% of your income for retirement can make a big difference later. If you’re starting later, you may need to save more aggressively or extend your working years.

There’s no one-size-fits-all answer to how much money you need to retire in Spain. Your target will depend on your lifestyle, location, income sources, and personal goals.

If you’re unsure whether you’re on track, consider speaking with a financial advisor or gestor who can help you design a plan tailored to your goals. It’s never too late to start preparing steps you take today that can help you build a secure, comfortable, and worry-free retirement tomorrow.