Retiring in Panama: a complete guide

1 min readLast updated November 10, 2023by Rachel Carey

If soft sandy deserts, beautiful tropical beaches and lush green rainforests are exactly what you’d love to fill your retirement with, moving to Panama in your retirement could be an incredibly attractive option.

This location uniquely blends adventure and tranquility, and it’s in the good books of many retirees thanks to its reputation as one of the safest countries in Central America and its world-renowned Pensionado program.  

The Pensionado program is unparalleled in providing excellent benefits and services to retirees from abroad. Since 1987, on a global stage, it has remained one of the most popular retiree residence programs. 

From the two-tier healthcare system to the Panama Retirement Visa, let’s look at all the factors involved in deciding to relocate to Panama as your working years draw to a close.  

What’s the average cost to retire in Panama? 

The cost of living in Panama can vary depending on where you reside and how you shape your lifestyle, but on average, people spend between $1,500 and $3,000 a month. As a retiree, you may be on the lower end of this estimate, especially if you own your home outright and don’t need to account for rent, the largest portion of the average monthly expenditure figures above. 

In terms of how Panama compares to the US, the cost of living is about 35 percent lower in this Central American haven. 

If you enter Panama on a visa for retirees, you will not be permitted to work there and must account for that as you cost things out. You will, however, benefit from the various discounts and exemptions included in the Pensionado program. For example: 

  • You’ll be exempt from import tax on household goods. 

  • Free of import tax, you’ll be able to import a new car every two years. 

  • You’ll receive a one percent reduction on home mortgages (if for personal residence). 

  • You’ll receive a ten percent discount on medicines. 

  • You’ll receive a 15 percent discount on dental exams, eye exams, hospital services and loans made in your name. 

  • You’ll receive a 20 percent discount on doctor’s bills and professional and technical services. 

  • You’ll receive a 25 percent discount on utility bills and airline tickets. 

  • You’ll receive a 30 percent discount on other methods of transport and hotels at weekends. 

  • You’ll receive a 50 percent discount on hotels Monday through Thursday and on tickets to movie theaters/certain events. 

Which visas do I need to retire in Panama? 

To visit Panama, you don’t need a visa, but to retire in or remain in the country permanently, you’ll need a Panama Retirement Visa, otherwise known as a Pensionado Visa. This should be able to fast-track your application and grant you residency within six months, provided all goes well. You can either: 

  • Enter Panama on a Tourist Visa and change your visa status with the help of an immigration lawyer from within the country. 

  • Apply for a Pensionado Visa from abroad, asking a Panamanian lawyer to process and submit your application. 

Whichever way you go about it, you’ll need to provide various identity documents and proof of a monthly income of at least $1,000. This will often come from your Social Security and other US pension payments, and the threshold will rise by $250 per dependent.  

You’ll also need to submit to a medical examination and provide evidence of your clean criminal record via an FBI Police Record Check.  

Where are the best locations in Panama to retire? 

Plenty of retirement havens are dotted around Panama, from busy and exciting cities with plenty of activities on offer to quiet, peaceful beach towns that are nothing short of serene. For retirees from far and wide, these areas are some of the best options on offer: 

  • Panama City, Panama – if you’ve always been a city person and have no plans to change that, Panama City is the place to be, filled with great healthcare facilities and exciting activities. High-rise ocean-view condos are available, and the Panama City retiree community is strong. 

  • El Valle de Anton (Anton Valley), Panama – this small, green town boasts a cooler climate, lush foliage and stunning natural features (from waterfalls to hot springs to mountain trails). It’s perfect for peaceful nature-loving retirees hoping for a slow-paced place to spend their golden years. 

  • Boquete, Chiriquí – if you want to immerse yourself in the culture of Panama as a retired foreign resident, the mountain town of Boquete is waiting to greet you with open arms. Amazing walks surround you, and the locally sourced cuisine is tough to beat. 

What are my healthcare options in Panama? 

Panama has a two-tier private and publicly funded healthcare system. The Ministry of Health and the Social Security System support public hospitals across the country. These offer some free services, but many other services will come at a cost, and you’ll likely need to invest in private medical insurance and rely on public services. 

It’s important to note that retirees living in Panama are eligible for certain healthcare discounts that make costs easier to cover. Also, note that it’s always better to secure the right health insurance plan before arriving in the country, so there’s no moment when you’re not protected in the event of a medical issue. 

Understanding the housing market in Panama 

Before settling in Panama, you’ll need to consider what you’ll do for housing.  

Are you planning to buy in the country, or will you rent? Either way, have you considered how costs differ from area to area?  

Apartments with one bedroom in central Panama City start from $600 monthly; outside the city, this amount falls to $300. You’ll get much more for your money if you’re open to more rural options. 

If your heart is set on the city, remember that prices can vary greatly from neighborhood to neighborhood. For example, the historic area of Casco Viejo sees house prices ranging from $300,000 to over $1 million, while the Bella Vista neighborhood is on the more affordable end of things. 

What happens to my retirement benefits if I retire in Panama?  

As well as receiving all the amazing benefits and discounts of the Pensionado program, detailed above, you can still access your Social Security benefits in Panama. You’ll usually receive these electronically, like most US expatriates who now live abroad. 

If you have a 401(k) or any employer-sponsored US retirement plan, you’ll have to decide whether you want to transfer it into another type of retirement account and bring it over to Panama or whether you’d prefer to cash out and receive the full sum then and there. 

It’s always worth consulting a financial expert when making significant life decisions like moving abroad – so why not speak to a financial advisor and get their take? A financial advisor can help you plan and realize your dream retirement.   

Find your financial advisor with Unbiased today.

Senior Content Writer

Rachel Carey

Rachel is a Senior Content Writer at Unbiased. She has nearly a decade of experience writing and producing content across a range of different sectors.