There seems to be an endless supply of retiring baby boomers willing to travel the globe in search of inexpensive sun and sand, and Panama is at the top of nearly all of their lists. While other countries welcome foreign retirees, no other nation comes close to Panama’s efforts to roll out the red carpet.

The popularity of Panama among expat retirees is not a secret, and the cost of living, while much lower than in the U.S., is rising. Generally speaking, you can live comfortably in Panama from $800 to $1,500 per month, but those enjoying more extravagant lifestyles can easily need much more.

Key Takeaways

  • Panama is an excellent spot for expats, retirees, and even an increasing number of digital nomads are calling Panama home for part of the year.
  • You can live comfortably in Panama from $800 to $1,500 per month, but those enjoying more extravagant lifestyles can easily need much more. 
  • The cost of healthcare in Panama is very low. 
  • The country is relatively safe, although petty theft, opportunistic crime, credit card fraud, and muggings are common in major cities like Panama City.
  • Expats are not required to have health insurance in Panama, which means you can either pay out of pocket for all services or invest in a private health insurance plan before they leave for Panama. 

In addition to its climate and beauty, Panama is popular with retirees because they can easily establish bona fide foreign residence, and because its national currency is the U.S. dollar. The Panamanian Constitution forbids the government from printing paper currency, so there is little threat of out-of-control inflation that has hurt so many other Latin American economies.

Panama has a history of low inflation, and no taxes are collected on income made outside of the country. Unlike many other small nations that depend on tourism or the varying prices of natural resources, the Panama Canal steadily provides 10% of the gross domestic product (GDP) for the nation’s rapidly expanding economy.

With a truly central location, Panama is known as the “Hub of the Americas” for good reason. Those looking to explore Central and South America will find a quality infrastructure in which to do so. Panama City’s Tocumen International Airport offers regular flights to every Latin American country, Europe, and the U.S.

Panama’s currency is pegged to the U.S. dollar and a fair amount of English is spoken in the popular cities, while the food and culture remain solidly Panamanian.

Monthly Costs

As of 2019, a monthly budget of $2,200 in central Panama City may look something like this: rental or mortgage of a two-bedroom apartment, $1,200; utilities with moderate air conditioning use, $100; food and household items, $300; maintenance and fuel for one small car, $200; entertainment for two for movies twice a month and dinner four times a month, $200; communication costs for phone, Internet and cable TV, $50; and health care, $150.

With experience, many foreigners are able to cut costs and save substantially by shopping at the same places as locals.

Urban Living

Panama City is a thriving, urban center of development, arts, and modern conveniences, but it is not a cheap place to live. An average one-bedroom apartment in the city center averages over $800 per month and three-bedroom units average $1,500.

Those looking to buy should expect to pay around $100 per square foot in the city center. The city features many high-rise apartment buildings where the rents can easily reach $2,400. Those willing to live like average locals can find more modest dwellings further from downtown where one-bedroom apartments can be found for an average of $550 per month.

Panama’s Rural Areas Offer Value and Beauty

Most retirees considering a move to Panama are drawn more by the quiet breezes of the ocean rather than the hustle and bustle of the big city. Those opting for a slower-paced retirement off the beaten path can expect to pay much less for housing.

The Pedasí region, a five-hour drive from Panama City on the southern tip of Panama, is a good example of the value that can be found in the outlying areas of the country. As of 2019, a couple can live comfortably on just $1,300 a month, with rentals costing approximately $500 a month, and homes near the ocean listed on the market for $135,000.

For those looking to build, ocean views property averages in the $70,000 to $145,000 range but can be had for as little as $10,000 an acre. The predominantly English-speaking population is home to many American expatriates and is well known for its welcoming and laid-back lifestyle, and the landscape features some of Central America’s finest beaches.

Panama’s Pensionado Program

Many popular retirement destinations attract foreigners with sunny beaches, low costs of living and safety. What truly sets Panama apart is its Pensionado, or retiree, program. While the program was developed to give local retirees access to wide-ranging discounts, it is also available to foreigners. The goal of the program is to ease the transition to a fixed or pension income by offering substantial discounts on a wide variety of services and products.

The program offers 50% off entertainment costs; 30% off bus, ferry and train fares; 25% off domestic airline tickets; 30 to 50% off hotel stays; 15 to 25% off at restaurants; 10 to 20% off a wide range of medical expenses; and even 50% off closing costs for home loans and 25% off monthly power bills.

Pensionados are also exempt from duties on the importation of household goods, up to $10,000. Participants in the program can also purchase a local or imported tax-exempt car every two years. Foreigners who become pensionados can buy and own Panama property and benefit from the same rights and protections as native residents, which is not always the case in many nations.

As of 2019, to be accepted, an applicant must be in good health, have an up-to-date passport and a verifiable monthly pension income of at least $1,000 per month for an individual or $1,250 for a couple, plus $250 for each additional dependent.

Health Care

Unfortunately, Medicare cannot be used outside of the U.S., but the cost of healthcare in Panama is so low, many feel they can afford not to have any insurance at all. Minimal government health care is available; however, most Panamanians prefer private health care as it is so affordable, even by local standards.

Insurance plans can be had for under $100 a month, and doctor’s visits are rarely over $30. Prices are drastically less than in first-world countries, with procedures costing as little as one-half to one-fourth of the cost of what they would run in the U.S.

Panama even has public hospitals funded by the Ministry of Health and the Social Security System that offer free services to those who cannot afford them. As an alternative to insurance, many private hospitals even offer discounts to members similar to loyalty programs used by U.S. retailers.