Why So Many Americans Are Retiring In Panama

Intro

Hi, I’m Kat Kalashian for Live and Invest Overseas, and today we’re talking about retirement in Panama.

Panama has long been one of the most popular destinations in the Americas for retirees and for anyone looking for a fresh start south of the border. But what exactly does this little nation have to offer, and what are the pros and cons of retiring there?

First, let’s look at why Panama is such a popular retirement destination in general.

Why Retiring in Panama Makes Sense

One of the main draws for many people is the low cost of living. You can cut your living expenses by as much as 50% here. I’ve spoken with many people over the years, and everything from food to real estate tends to come at a much lower cost.

Although prices have increased in recent years because of Panama’s growing popularity, life there is still such a bargain when compared especially to the United States. And when you factor in the fact that you may be living a seaside lifestyle or a luxury lifestyle on a golf course, it’s important to compare apples to apples.

Even if Panama does not seem as cheap as you might have imagined, you always have to keep in mind the level of lifestyle you’re getting in exchange for that cost of living.

With that said, your cost of living could still be under $1,500 a month. That would be a simple but fully appointed lifestyle, and that is in much of the country’s interior. In Panama, the interior generally means anything outside of the city or outside of the major urban centers.

So when we talk about the interior, we are talking about rural lifestyles, village life, small towns, beach communities, and other lower-density places. In the city or in popular expat havens like Boquete in the mountains, you could easily spend double that or more depending on your lifestyle choices. But again, it all comes down to budgeting and priorities.

Health care is another major advantage. It is excellent and also very affordable. A doctor’s visit in Panama City might run you about $50. The clinic I went to my entire life in Panama was $25 a visit, and I believe it has only gone up to about $30 since I moved away.

That is still very affordable, and the standard of care is very high, particularly in the private hospitals. Panama City is home to Hospital Punta Pacífica, which is the only hospital in Latin America affiliated with and managed by Johns Hopkins Medicine International.

Outside the city, you’ll also find small clinics throughout the country that can handle everyday ailments. Every doctor I ever met in Panama was friendly and helpful. Many speak English, and many also studied or trained in the United States or Canada.

So some of the health concerns that people have about moving overseas are much less of an issue in Panama City especially, and even in many other parts of the country. If you decide to live in Boquete, for example, there is a good clinic there as well, and David, the nearest city, has a larger full-scale hospital.

Another obvious advantage is the tropical climate. If you love beaches, warm weather, and sunshine year-round, Panama is a great option. What is especially notable is that it lies outside the hurricane belt. So if you love the idea of a Florida or Caribbean lifestyle, you can have that in Panama without being in a regular hurricane path.

Average annual temperatures throughout much of Panama range from about 77°F to 82°F, especially in the city and along the coasts. In the highlands, however, it is much cooler. We often describe those temperatures as spring-like, around 63°F to 70°F year-round.

It may feel cooler when it rains or after dark, but generally you won’t need much more than a light rain jacket.

The local currency is the U.S. dollar, which makes relocation especially easy for Americans, since you do not have to worry about exchange rates or converting funds.

The country is also economically stable thanks to the Panama Canal and to tax policies that have made Panama City a base for many multinational corporations. That brings in more foreign residents and workers and contributes to overall stability.

The capital is very cosmopolitan. It is home to expats from around the world and offers nearly every first-world amenity and comfort you might want. You’ll find American imports in grocery stores, especially in the city, but also in many interior locations. There are hardware stores, big-box stores, furniture stores, and stable internet and electricity.

The culture also feels familiar to many Americans because of the former U.S. presence in Panama and the long history connected to the Panama Canal. There is a certain cultural familiarity there both for newcomers and for locals who are used to Americans coming in.

As I mentioned, the infrastructure is generally of a high standard. This is a place where many things simply work. The internet, the television, the phones, and the utilities are among the most reliable in the region. In Central America, things can sometimes be hit and miss, but in Panama they are usually quite stable.

The roadways and highway systems are also constantly being expanded and improved. You’ll find banks and ATMs all over the city. I will say, though, with a big asterisk, that ground-level infrastructure such as sidewalks, street surfaces, and drainage is still lacking in many places, especially in Panama City.

Much of that is because the city experienced such a fast population boom that infrastructure simply did not keep pace with the number of new cars and residents.

So you may not love the streets in Panama City, and you may not want to walk everywhere there. In places like Boquete, though, there are some nice walking streets, and in villages and beach towns you’ll find paths and roads that are simple but serviceable.

Electronic infrastructure, however, is generally reliable.

Panama City is also an international travel hub, which makes it highly accessible from North America and beyond. Flights from Florida, for example, are about three and a half hours, and I can even fly direct there from my home in Paris.

That makes travel to and from Panama very easy and comfortable.

When it comes to lifestyle options, you can really take your pick. Outside the capital, you can choose from bustling beach towns, mountain escapes, rural retreats, and long-established expat havens.

Panama has two long coastlines. One has crashing Pacific waves and some of the best surf breaks in the world. The other has crystal-clear Caribbean waters, excellent diving, and countless islands on both sides that are fun to explore or simply relax on.

This small isthmus also brims with rainforests and jungles full of exotic wildlife. Panama is home to more than 940 bird species, 220 mammals, and 354 reptiles and amphibians. About 30% of the country’s land is protected in national parks, forest reserves, and wildlife reserves.

There is also a range of quick and easy residency options, including the well-known Pensionado Visa, one of the most accessible and generous residency programs in the world.

The basic requirements are simply to be over 18, to earn at least $1,000 per month, to have a clean criminal record, to obtain a health certificate from a local doctor stating that you are generally in good health, and to file your application through a lawyer in Panama.

You can also get by without speaking Spanish, though I do not recommend relying on that long term. In Panama City and in expat enclaves such as Boquete or Bocas del Toro, you can manage in English if needed.

Panama is also a relatively safe country to live in. Panamanians are very friendly, and in Panama City especially you will often see police patrolling tourist-heavy areas. Tourist police are also present and are able to speak in English with visitors and help keep those areas safe.

The main crimes you are more likely to encounter are muggings and burglaries, which are common concerns in many parts of the world. So as long as you are aware of them and take reasonable precautions, you should be fine.

As for the number of Americans in Panama, the country has a population of about 4.4 million, and around 20,000 to 30,000 are said to be U.S. expats. Major concentrations are in Panama City, the beach communities around Coronado, Gorgona, Chame, and Río Hato, and especially in Boquete, which is probably the best-known expat haven in Panama.

Boquete is home to around 25,000 people, and roughly 5,000 of them are expats, so it has a very high ratio.

Panama really is a pensioner’s paradise in many ways. It offers retirees exclusive perks such as tax waivers, duty-free imports, and significant discounts on a wide range of bills and services.

Retiree benefits can include discounts on restaurant bills, movie tickets, plane fares, prescription medications, and more. They may also include duty-free import of household goods and one vehicle, discounts on entertainment, travel, hotel stays, health care, prescriptions, professional services, utility bills, and certain loan-related costs.

There is even the small but much-loved perk of being able to skip to the front of the line in many places, from the grocery store to the bank, simply by showing your retiree card.

As I mentioned, the locals are friendly and welcoming, but Panama’s stable, relatively drama-free government and pro-business, foreigner-friendly environment are also major pluses. Panama stands out as a strong place for property investment as well, which many retirees see as one way to strengthen their nest egg.

Developers in Panama often have long track records spanning decades, and at the moment many are more open, flexible, and creative with financing options than they have been in a long time. So it can be a good moment to take a serious look at Panama if investment is part of your retirement plan.

The Cons of Panama

Now that we’ve covered the pros, let’s look at some of the cons.

First, the climate can definitely be considered a downside. If you hate humidity, Panama should probably come off your list unless you are specifically looking to live in the highlands.

Panama has two seasons. The dry season runs from December to April, and the rest of the year is the rainy season, which peaks in October and November. During those months, you may see rain every single day.

At that time of year, you can really expect heavy downpours. They usually do not last more than 20 minutes or maybe an hour at most, but you do have to plan around them. It may be more of a hassle than some people are willing to deal with.

During the dry season, temperatures in the city can soar. So if you are looking for a cooler climate, you should really focus on the mountain regions where temperatures stay lower year-round.

I will say, though, that I loved the thunderstorms in Panama. They were one of my favorite things about living there. I have very vivid memories of watching storms roll in from my balcony and hearing the rain pound on all the windows around us.

So if you enjoy thunderstorms, Panama offers truly epic ones.

Another issue is that while health care is excellent in private hospitals and in the capital, there is less availability in more rural areas. If you need to be close to top-tier medical facilities, then Panama City or Chitré should be your main targets.

Chitré is the rapidly developing capital of Herrera Province. If you use one of those places as your base, you should be fine. Otherwise, you need to do careful research to make sure you would feel medically comfortable where you choose to live.

Traffic in Panama City is another major con, and I would say the city beaches area can also suffer from it. The exploding middle class brought many more people and cars than the city could easily handle. Streets remain narrow, parking is limited, and traffic jams are epic.

Those same epic downpours can also flood streets and make traffic even worse. If you are traveling on a holiday weekend, expect very long waits getting in or out of the city toward beach destinations.

If you do not want to own a car, your best way around the city is often Uber or Cabify. It is often too hot to walk comfortably, or too wet depending on the season.

As I mentioned before, sidewalk infrastructure can also be hit or miss where sidewalks even exist.

The mañana attitude can be a pro if you want to slow down and enjoy a more relaxed way of life. But if you are used to getting things done quickly, on your own schedule, and in your own way, you may struggle with that.

Nobody in Panama is in much of a hurry to do anything. The best advice is to slow down and go with the flow. If that is not your personality, Panama may not be the best fit.

The language barrier can also be an issue. You can get by in English in the city and in places like Coronado or Boquete, but to really live well and build a social circle, you should learn Spanish.

Noise can be another downside depending on where you live. Locals love to party, and it is not unusual for music to be blaring or fireworks to go off on holidays, whether it is midday or late at night.

In more rural areas, the noise may come from barking dogs or crowing roosters instead. So do some serious due diligence in each place you are considering.

And finally, there are the pests. This is the tropics. There are spiders, cockroaches, mosquitoes, snakes, scorpions, caimans, and other creatures you will encounter. Even in the city, to a certain extent, they are part of life.

Once you leave the capital, they become even more present in your daily environment. So if you have a serious phobia, Panama’s interior may not be the best choice for you.

The Pensionado Visa

Let’s talk a little more about the Panama Pensionado Visa. This is the best option not just for retirees, but really for anyone over the age of 18 who has a pension, either private or government, of at least $1,000 a month.

So if you are on Social Security, you can easily qualify. The minimum pension requirement is $1,000 for a single applicant, plus $250 for each dependent. For a married couple, that would mean $1,250 a month.

The Golden Visa

Another option for retirees is the Golden Visa, which allows you to invest $300,000 in real estate or a bank CD and apply for residency that way.

Who Should Consider Moving to Panama?

To wrap things up, who should consider living in Panama? The country offers such a wide range of choices that it can cater to almost every taste.

If you like big-city conveniences, plush condos, modern comforts, and lots of entertainment options, you will find all of that in Panama City and increasingly in the city beaches area, in gated golf communities or high-rise coastal developments.

If you are a nature lover and prefer a quieter pace of life, mountain towns like Boquete or a beachside retreat like Pedasí may be more your speed.

Or you could choose a rural escape and truly homestead in the countryside, as my family has done at Los Islotes Ranch, a 250-acre finca in the little-explored Veraguas Province. It takes a while to get there, but once you do, you never want to leave.

Whether you want a vibrant, action-packed retirement in a fast-paced city, a place where you can escape the world and get back to basics, or something in between with an old-fashioned feel and modern comforts, you really can find it all and more in Panama.