Retirement: Why Panama Is the New Florida:
Panama's quality health care, low costs,
and proximity to the states are attracting
American professionals as a retirement haven.
Business Week, July 13, 2009
Forbes' International Living proclaimed Panama as one of the best places to retire several years ago, leading to a mini-stampede amongst the North American and European baby boomer community. The country is steady climbing on the other top retirement destinations lists as well. What makes the country to be considered as Paradise for Retirees, as it is called in the recent MSN Money post? Let’s review in brief all aspects of the potential retirement to this country.
Advantages of Living in Panama
Panama is Safe
Panama is a democracy and with no armed forces and a low crime rate. Yes, it has the lowest rate for crimes against tourists in the region. In Panama City, the petty street crimes that hinder tourists in other countries are uncommon. Like every big city — there are some neighborhoods to avoid, but in general with tourism activities, you can go about Panama City without worrying. This is true for the rest of the country with a few exceptions.
Many top US and international companies are now making their regional headquarters in Panama because it is safest country in the region.
An American-Style Infrastructure
One of the best things about living in Panama is the American-style infrastructure. 50,000 Americans made their home in Panama until 1999 when Panama took control of the Panama Canal region and they left their mark. Panama also has a long history as a crossroads for Europe. Panama has a distinct, delightful Latin-Caribbean culture, but you will feel at home because American and foreign influences abound.
A Foreign Investor and Retiree-Friendly Government
Panama has the best retiree benefits plan in the world and also an investor-friendly government. Panama has always been about business. President Martinelli is one of the country’s most successful businessman and is implementing important changes needed to attract investors and retirees. One of his goals is to make Panama "the best place to do business in Latin America." Helping to ease working with Panamanians, you will find many in the entrepreneurial class are US-educated and readily understand and know how to work with foreigners.
The Panamanian People
Another reason why Panama is a great place to live is because of the Panamanian people -one of the friendliest peoples in the world. Due to Panama's position as a world business and transportation crossroads there's a long history of living and working with foreigners. Different from most countries, Panamanians actually enjoy foreigners. There's a saying that Panama was "born globalized". Historically a crossroads, Panama is home to immigrants the world over. The different communities comprised of different nationalities and races have get along amicably Like most Latin American countries most common are "mestizos" or persons who are a combination of European and Indian origin. But there is a large black population, descendents of people that originally came to help with the construction of the Canal. European, American, Chinese, Jewish, Hindu and Arabic communities also have a strong presence. And in Panama all these different peoples know how to get along.
Panamananians are also fun loving. Parties are a national pastime. They also have a predilection for beauty and elegance. This sense of beauty is visible in many ways, from the delicacy of their Indian handicrafts, to their beautifully groomed women and Panama City’s many well appointed neighborhoods.
Panama is Close
Located in Central America, Panama is easy to get to. It is just 3-5 hours by plane from the States, there are non-stop daily flights to Miami, Atlanta, Houston, Dallas, Newark, Los Angeles, New York, Washington D.C., Orlando and Fort Lauderdale served by Delta, Continental, American, Copa and Spirit Airlines. From Europe, KLM has 3 directly weekly flights. From Canada, AirTransat has a weekly Charter flight out of Toronto and Copa recently announced direct flights from Canada soon.
The Dollar as the Currency
Panama has the US dollar as its currency, a great convenience. This makes daily life much more hassle free for visitors and foreign residents. No need to constantly figure out how much things cost. The dollar as currency is also major contributing factor to the fact that Panama has the lowest inflation rate and the most stable economy in Latin America.
Cost of Living
By retiring in Panama, you will enjoy the benefits of a developing economy where you can still take a taxi across town for under $4, get your haircut for $5, or enjoy dinner with a bottle of wine at a trendy Panama City restaurant for under $20 a person.
Food is very inexpensive if you buy at the outdoor markets. A pineapple, for example, costs only 25 cents. In general your food bill will be 1/4 to 1/5th of what it would be in the US or Canada. Be careful, though, Panama City has many upscale shopping malls and grocery stores which sell their goods at American prices.
Clothing is also very cheap. The same story applies. You can find shops that will sell you clothes at American prices, but if you shop in the outdoor markets you can find clothes at a small fraction of the cost. For example, name brand shirts like Tommy Hilfiger can be bought for about $6. These same shirts cost from $50 to $100 in the states depending on the shirt. In Panama you can generally get clothing for 10% of the American cost if you shop properly. If you want to shop in air conditioned malls, expect a much higher price.
Cost of a Maid in Panama
In fact, it is common practice in Panama to have servants. A full time house keeper costs only about $200 per month. A driver costs about $350 per month.
Travel within Panama is dependable and inexpensive. Taxis in Panama City are cheap and reliable. You can go just about anywhere for less than $5. If this is your first trip we don't recommend driving in Panama City because of the lack of signage.
Outside Panama City, the highway system and the feeder roads off the main highways are excellent. If you are renting a car, the Interamerican highway that goes from the border of Costa Rica to Panama City is a four-lane highway most of the way.
If you aren't driving, for $15 or less you can travel across the country on a luxury bus from Panama City to anywhere.
Inexpensive Quality Health Services and Medical care
One of the main reasons many Americans of retirement age are deciding to live in Panama is because both health insurance and health care very inexpensive in Panama and also in general excellent.
More than any place in Latin America, you can readily find English speaking trained doctors and dentists. There are several hospitals with the latest in diagnostic testing and services. Prescription and over, the, counter medication is available at low prices. Full coverage health insurance policies are very reasonably priced for any age.
Another big health plus is that you can drink the tap water, a rarity in Latin America. Sanitation is good... the "Montezumas revenge" illnesses that tourists are prone to in other countries of Latin America are almost unheard of.
Panama has the best shopping in Latin America. Starting with the supermarkets- Riba Smith, El Rey and Super 99 stock just about everything you would find in an American supermarket but at lower prices. There are three Price Costos in Panama City and one in David in Chiriqui.
Panama City has four major shopping malls: Multiplaza in Punta Pacifica, Albrook Mall and Multicentro on Balboa Ave and Metro Mall near the international airport. There are large electronic, appliance, computer and furniture stores with familiar brands and prices the same or better than the USA in each mall.
High Speed Internet
Panama is a so-called developing country but high speed internet access is better than in the USA. Phone service and other basic services are also reliable - unusual for Latin America.
Foreign residents really enjoy the restaurant scene. As an international crossroads, Panama City has many fine, reasonably priced restaurants with a wide variety of cuisines. It’s fun just trying to decide where you're going to dine. If you’re homesick, American restaurants and fast food joints are everywhere including TGIF, Bennigans, Wendys, Pizza Hut, KFC, Subway, McDonalds, Burger King etc.
Banking and Finances
ATM machines providing access to your USA bank account are located throughout Panama City and in many locations outside Panama City. Panama has a sophisticated banking sector with one hundred banks, including Scotia Bank of Canada which caters to foreigners. If you are looking for offshore activities there are specialists who can provide personal or corporate services with strong financial privacy laws and no taxes on offshore profits.
Families with children will find a number of excellent private schools to choose from. Most foreign capitals have just one American accredited school, but Panama has three: The International School of Panama, Balboa Academy and the Oxford International School.
Variety of Residential Venues to Choose From
The three most popular places for homes are Panama City, the beach areas and mountains. With the worldwide economic crisis prices are coming down especially for condos in Panama City. Prices for beach and mountain venues decline less because Panama is a small country fast becoming a regional business hub and there are only so many prime locations. On the beaches, choose from beachfront lots, homes and condos on both the Pacific Ocean and the Caribbean. Panama’s mountain areas like Boquete, Volcan, Sora and El Valle offer perfect all-year-round spring weather.
Unlike any other country in Latin America, Panama has refreshing variety of architecture styles. In the rest of Latin America, Spanish colonial dominates while in Panama there's a refreshing variety of modern, Spanish colonial, American, French and English styles.
Great Retiree Benefit Program
On top of all advantages, listed above, Panama provides one of the best (if not the best) retiree benefit program in the World. The Panamanian government actually encourages retirees to retire here with a program with many benefits and discounts.
To qualify for a retiree visa the only requirements are a proven monthly income of $500, a health certificate, and a police report.
Some of the benefits for retirees:
- One-time importation duty exemption on all your personal and household goods up to $10,000.
- Importation duty exemption of a car free of taxes every two years.
- All foreigners (not just retirees) who purchase a home of more than $200,000 have the right to a residency visa.
- Residents pay no tax on foreign earned income.
- 100% Property tax exemption for sole residence.
- 50% off closing costs for home loans.
- 25% off both international and domestic airline tickets.
- 50% off hotel accommodations Monday-Thursday
- 10% off prescription medicines ( which are inexpensive to begin with)
- 15% off dental and eye exams.
- 30% off bus, boat and train fares.
- 25% Restaurants
- 25% Airfares
- 15% Fast Food Restaurants
- 20% Doctor visits and Surgery
- 25% Monthly energy, phone and water bill
- 15% Optometry services
- 15% Dental
- 50% Hotel from Monday thru Thursday and 30% on weekends
- 50% off entertainment including movies, concerts, sporting events and theater every day. (This means for example, a movie ticket will cost you $2. And Panamanian cinemas receive American movies about the same time they come out in the States.)
- In Panama all banks (mandated by law) have special express lines for Retirees.
- And don't forget, you can hire a full time maid for less than $200 a month. That is probably the most helpful “retiree benefit”.
Note that unlike many other countries, in Panama, foreigners who buy property enjoy all the same rights and protections as Panamanians.
Disadvantages of Living in Panama
Living in Panama is not for everyone. If you are coming here because your company has set up here - you're just plain lucky - for international families, there's simply no better place to live in Latin America and the Caribbean. If you are coming here to retire or start a business, you should consider whether you have the temperament to enjoy a foreign culture that is not yet first-world.
If you are a Type A personality - Panama is probably not the place for you. This is still a third world country in some ways and at times things do not go smoothly. Furthermore, you need to be able to enjoy cultural differences and be able to put up with bureaucratic hassles and third world glitches.
Also, if you are on a very low budget- say less than $2000.00 a month- Panama is not the place for you. Panama is no longer a low budget place to live. It does cost less to live here in style than in the States-but you need a minimum income- in our opinion of $2000.00 a month.
Finally, if you are not willing to learn at least some basic Spanish, think twice also about living here. Yes - educated classes generally speak English - but the majority of people speak no or little English. How will you communicate with your maid, plumber, car dealer etc. if you don't learn some Spanish?
Sources and Additional Information: