Why Retire To Panama?

Panama, known as the “hub of the Americas,” has become known as one of the top retirement destinations in the world. Its affordable cost of living and high standard of living appeal to baby boomer retirees from Europe and the United States looking for a new home. Many from the United States especially prefer Panama for its proximity and ease of access. Those who retire to Panama find that a quite simple two-and-a-half-hour flight will land them back in Miami in the United States. Retirees who wish to explore the Caribbean and Latin American areas will also find that they can easily do so from Panama. This is how Panama got the “hub of the Americas” nickname.

Cost of Living in Panama

Panama offers wide, sandy beaches, beautiful islands, colonial historic towns and mountain retreats, providing something for almost every retiree’s tastes. It is also not a crowded country, with a population of just four million (including natives and expatriates).

The coastal areas of Panama are popular settlement spots for baby boomer retirees. Las Tablas on the Azuero Peninsula has a cheap cost of living, where retired persons can live for $1200 per month. Rents on the coast are cheaper as well, averaging $600 per month. It is known as a safe and friendly colonial beach area about four hours from Panama City.

Coronado, a developed beach area near Panama City, is another popular spot for baby boomer retirees. The beach provides Coronado with breezes, keeping the temperatures a bit cooler than those in Panama City. It houses a mixture of expatriates and native Panamanians.

Panama City is a bit more expensive in which to live, obviously, as it is the capital of the country. It has been estimated to cost from $1500 to $2000 per month to live comfortably in Panama City. Rents within Panama City are, not surprisingly, higher than they are elsewhere in the country, averaging $1000 per month. Panama City enjoys a bustling nightlife for those who are looking for that type of entertainment. Traffic here is usually bad, as in most cities, which is another reason Panama City does not appeal to most retirees.

The highlands areas of Panama are also popular with retirees, such as Santa Fe and Boquete. These mountain areas can feel more comfortable and are less expensive in which to live. Rent in mountain areas averages about $500 per month. Boquete is said to house more expatriates than native Panamanians, as so many baby boomer retirees have flocked there for the cooler temperatures.

Santa Fe is one of the top mountain areas in which baby boomer retirees have settled in Panama, due to its lower cost of living. It is an out of the way mountain hideaway and can be a bit more inaccessible from the larger cities. However, for retirees who are interested in an affordable, cool, and basic place in which to retire, Santa Fe is perfect.

Panama’s Weather and Climate

Panama’s tropical climate means that baby boomer retirees who go there can expect warm, humid, sunny weather year-round. The higher elevations, of course, experience cooler mountain temperatures and are preferable for those who can’t stand the year-round heat and humidity of the rest of the country.

Money in Panama

Panama’s economy is strong and continues to grow due to trade that flows through the Panama Canal. The canal has helped to make Panama one of the fastest-growing economic markets in Latin America as well as one of the fastest-growing nations in the world. The currency used in Panama is the U.S. dollar, making things even more convenient for baby boomer retirees from the U.S.

Panama’s tax system is friendly to foreigners. Those who move to Panama will get a tax exemption on household goods that they bring with them from their home country. Also, as Panama has what is known as a territorial tax system, all income earned outside of the country is tax exempt. This applies to resident individuals, so obtaining residency is important for many who move to Panama and work outside of the country.

The banking system in Panama is also strong. As Panama has become an international banking center, branches of banks from all over the world can easily be found. At least 80 different banks have branches located throughout the country.

Vehicles are more expensive in Panama than elsewhere, however. Importing vehicles is also an expensive prospect. Most baby boomer retirees who have sold their vehicle say that they can get a better price for their vehicle in the United States than in Canada. It is recommended that one obtains a reliable, trusted mechanic to look at any used car before purchasing it in Panama.

Standard of Living in Panama

Panamanian natives are welcoming and embody the laid-back, relaxed, easygoing attitude found in many of the Caribbean and Latin American countries. Termed a “manana culture,” many things are put off until tomorrow (manana). Workers move a bit more slowly and things may not happen when one wishes or expects them to happen. Although Spanish is the native language of Panama, English is widely spoken, making communication easy for baby boomer retirees who decide to settle in Panama.

Panama’s infrastructure is good, with Internet, television and phone services all as reliable as baby boomer retirees have become used to in the United States. Media, on the radio and on television, offers programs in English that appeal to retirees from the United States. Road and highway systems are well-maintained. It is a safe country in which baby boomer retirees can securely settle.

Water and power outages, however, do occur with frequency in Panama. Some U.S. baby boomer retirees find this hard to get used to. Outages that occur in the rural areas can take longer to fix than those within urban areas.

Healthcare facilities in Panama are known to be quite good, which is important to many baby boomer retirees when making the decision to relocate abroad. In fact, Panama’s Hospital Punta Pacifica is managed by and affiliated with Johns Hopkins Medicine International. Local health insurance is comprehensive and cheap at about $100 per month. Doctor’s visits, even without insurance, average $50.

Activities for baby boomer retirees abound in Panama. Sports, concerts, theater and restaurants are all options for attractions. As a bonus, these activities may be discounted up to 50 percent off for senior citizens under the Pensionado Program in Panama, which will be discussed further.

More fresh fruit and vegetables are available for purchase in Panama than back home, many baby boomer retirees find. Many enjoy the privilege of buying cheaper locally-sourced produce and eating healthier than they did in their home countries.

Residency Options in Panama

Panama encourages foreign retirees to migrate to its country and has therefore made the process to establish legal residency streamlined. There are a few different options available.

Under Panama’s Pensionado Program, qualified citizens in Panama can earn many special discounts from 15 to 50 percent off transportation, medications, airfare, property closing costs, and restaurants. Senior citizens also may earn special places in line or no wait in line at government agencies businesses and banks. In order to qualify for this program, a retiree must receive a pension income of at least $1000 per month and $250 for each dependent, prove that they are in good health, and prove that they have no criminal record. One need not be a senior citizen in order to qualify for the Pensionado Program – one just needs to be receiving a pension income, at any age. However, if you are in the Pensionado Program, you cannot apply for Panamanian citizenship.

Another type of visa in Panama is the Person of Means Visa. This applies to foreigners who have $300,000 and do one of the following: purchase real estate in Panama at that value, establish a deposit for $300,000 in a Panamanian bank for two years, or combine the two options, adding up to $300,000.

Under one of the most popular plans, Panama’s recently established Friendly Nations Visa, visitors from certain countries (including the United States, Canada and many European countries) are fast-tracked to become permanent Panamanian residents. They must establish professional or economic ties with Panama through two options: setting up a Panamanian corporation (or purchasing an existing one), or being hired to work as an employee for an existing Panamanian corporation. One must be able to prove economic solvency in order to qualify for residency by depositing $5000 in a Panamanian bank account. Dependents are also eligible as long as they deposit $2000. A one-year temporary residency permit is issued when the application for visa is filed and is converted to a permanent residency card after approval.

Overall, baby boomer retirees who are looking for a slower pace of life in a warm, tropical country that is still easily accessible to the United States will enjoy living in Panama. The close proximity of friends and family and being able to easily go back home to visit them (or have them come to visit) is one of the greatest appeals for retirees who decide to settle in Panama.