Retiring in Panama: a complete guide
Find out what the requirements are for retiring in Panama and why so many Americans have chosen this Central American country as the place to spend their golden years.
Summary
Panama has an excellent retirement program, and its healthcare standards are high.
According to Expatistan, the cost of living in Panama is 64% cheaper than other countries globally.
The US expat and retirement community is strong in Panama as it is a popular destination.
Working with a financial advisor can help you make the best decisions for your retirement.
What are the pros and cons of retiring in Panama?
Panama is a beautiful country in Central America that is becoming an increasingly popular retirement destination for Americans. However, like any country, retiring in Panama has its pros and cons, all of which should be considered before making a final decision.
Pros
High-quality healthcare: Panama's healthcare systems are robust and can offer most, if not all, of the same care as those in the US.
Lower cost of living than the US: Panama’s currency is US dollars, but the cost of living is lower.
Established expat/retiree communities: Between 20,000–and 30,000 Americans and 8,000 Canadians live in Panama, many of whom are retired couples and individuals.
Cons
Safety can fluctuate: Although Panama’s crime rate is significantly lower than America’s, there are areas within the city that can be considered dangerous for older foreigners.
Rural areas have limited infrastructure: The infrastructure in Panama City and other developed regions is equal to that of America, but rural areas cannot offer the same luxury.
Bureaucracy complications: Even though you don’t need a visa, you will need to compile a fair amount of paperwork to retire in Panama.
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.
To retire in Panama as a US citizen, you need to prove that you will earn over $750-$1000 a month for the rest of your life, with an additional $250 for each dependent. These earnings can come from a pension, investment, or any other proven source of funds.
In terms of how Panama compares to the US, the cost of living is about 35% 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.
Do you pay taxes after retirement in Panama?
Panama is one of the most tax-friendly countries in which to retire.
This Central American country does not tax foreign-sourced income, which means you do not have to pay taxes on your Social Security.
Panama taxes its citizens exclusively on income from Panamanian sources. Retirement funds (such as an annuity) or pension payments from the US are not subject to taxation in Panama. However, it is important to note that US retirees based in Panama will still need to pay US taxes.
What are the best places to retire in Panama?
Panama is home to some beautiful and well-established locations that make for more than adequate places to retire. Some of the best places to retire in Panama include:
Panama City: Panama's capital has one of the biggest banking and finance sectors in Central America. Living in a smaller apartment can give you access to all the functional amenities and services you’d expect in the US, plus some glorious beachfront views.
Chitré: A few hours out of the city and along the Azuero Peninsula, Chitré is an affordable, more countryside-like town with a slower pace and higher quality of life.
Coronado: This laid-back stretch of gated communities and villages offers a good balance of social activity and quiet nature that many retirees appreciate.
El Valle de Anton (Anton Valley) – 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.
At what age can you retire in Panama?
In Panama, the required retirement age is 62 for men and 57 for women.
If you meet these age requirements, you will qualify for benefits such as limited tax exemptions, discounts on utility bills, and discounts on doctor’s bills, among others.
What programs are there for emigrating to Panama?
Numerous programs are available for people emigrating to Panama from the US. Tourist cards can last between 30 and 90 days in the country, but if you want to relocate to Panama for good, there are a few logistical requirements to consider.
Most emigration programs require proof of minimum income, a clear criminal record, an authenticated marriage or bachelorship certificate, and a sworn statement on personal background. It can be helpful to have a Panamanian attorney handle your immigration application.
What visa do I need to retire in Panama?
To retire in or remain in the country permanently, you’ll need a Panama Retirement Visa, otherwise known as a Pensionado Visa.
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.
Benefits of the visa include:
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 1%reduction on home mortgages (if for personal residence).
You’ll receive a 10% discount on medicines.
You’ll receive a 15% discount on dental exams, eye exams, hospital services and loans made in your name.
You’ll receive a 20% discount on doctor’s bills and professional and technical services.
You’ll receive a 25% discount on utility bills and airline tickets.
You’ll receive a 30% discount on other methods of transport and hotels at weekends.
You’ll receive a 50% discount on hotels Monday through Thursday and on tickets to movie theaters/certain events.
What are my healthcare options in Panama?
Panama has a wide range of healthcare options to choose from.
As a senior citizen, you will have access to all the essential healthcare services you would expect in the US, many of which are subject to discounts for approved retirees.
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.
What is the housing market like 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 you're set on the city, remember that prices can vary greatly from neighborhood to neighborhood. For example, the historic area of Casco Viejo has house prices ranging from $300,000 to over $1 million, while the Bella Vista neighborhood is more affordable.
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 to transfer the money 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.
Is it safe to retire in Panama?
Yes. Thousands of people retire in Panama for its laid-back culture and comfortable levels of safety and infrastructure.
As is the case with all countries, crime is concentrated in some areas, but this can be avoided through careful selection of a retirement base and reasonable caution.
Is Panama a good place to retire?
From a US and international perspective, Panama is widely considered a good place to retire. There is beautiful nature, comprehensive healthcare, straightforward emigration programs, and ample retirement benefits for those who choose this country to hang their hats in.
Get expert financial advice
Retiring in Panama is a popular choice for those who seek a more tropical environment to live out their golden years.
To find out more about emigration retirement and retirement planning in general, get matched with a financial advisor through Unbiased today.
Senior Content Writer
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.