Retire in Panama and enjoy retiree perks
Should you retire in Panama? What is the best place to retire in Panama? These are two common questions on the minds of retiring seniors who are considering living abroad as a retirement option. After Mexico, Costa Rica and Panama are the most-often mentioned retirement countries in Latin America. We compared and contrasted Costa Rica and Panama on our Tropical Retirement page, where we also described some of the cultural challenges you should consider when contemplating retirement in Latin America. Tropical Retirement should be considered required reading.
Panama is a land of variety—rugged beauty, and urban surprises. Rainforests cover much of the Caribbean side of the country and through the Panama Canal area; yet at the Pacific end of the Canal rises a modern city, Panama City, the nation’s capitol. With a population of about 3.5 million, 73% of Panamanians live in urban environments such as Panama City (total metro population of 1,272,672—San Miguelito and Tocumen are large suburbs), Colon (145,000), and David (125,000). More than half of the nation’s population lives in the Panama City – Colon corridor, where the Panama Canal is located. While unemployment is 7% on average, it is somewhat higher in rural areas. The ratio of poor is higher in rural Panama, where 28.6% live below the poverty line.
Panama has the second largest economy in Central America and the fastest growing economy. Its growing urban middle class fuels burgeoning consumer spending. It is an international business center, and its largest city, Panama City, with an metro population over a million, is arguably the most modern, vibrant city in Central America. Yet there are impoverished sectors of the city, and outside of the urban centers there is little middle class, with poverty and unemployment widespread. Nonetheless, literacy is high at 91% and medical facilites and infrastructure are above average for Central America. Panama is the only Latin American country with the U.S. dollar as its official currency, a major convenience for those retiring or visiting the country from “up north.”
The government is a constitutional democracy and is far more stable than its turbulent history might suggest. The current president, Ricardo Martinelli, a successful Panamanian businessman, has been popular with the people and has initiated reforms aimed at reducing corruption. Nonetheless, he has meddled with the courts, election laws, and has been accused of taking bribes. Martinelli is supportive of the major expansion of the Canal, which is expected to be a huge boost to Panama’s economy for decades ahead.
The country has several distinct regions that offer different prospects for would-be retirees. On the northeast coast, there is Bocos Del Toros, a remote group of islands. This area reminds me of the Tortuguero region of Costa Rica; a laid-back vibe near a national park. Here, life centers around water and development is still in early stages. If you really don’t like hot weather, the mountainous highlands of Chiriquí and the ex-pat populated town of Boquete are for you. The city of David is a short way down the mountain, so Boquete is not far from city services. Colon, the principal city at the Atlantic end of the Canal, is Panama’s version of the Wild West. It is a duty-free trade zone and a major port, but it struggles with a high crime rate, and has a reputation as a transit point for illicit drugs.
The Darien province is off to the east. The part of Darien bordering Colombia is an undeveloped jungle area with natural and human predators and should be avoided. Also within Darien is the native territory of Embera, home to one of Panama’s principal indigenous peoples. On the Caribbean coast east of Colon is Kuna Yala, an autonomous territory, or comarca, in Panama, inhabited by the Kuna indigenous people. This area, also known as San Blas, with its long coastline, is a superb attraction for a Panama tour, but don’t think about living there or building condos; it’s not going to happen.
This leaves Cocle province, with the picturesque town of El Valle de Anton, the Coronado beach area with large oceanfront resorts, and the province of Panama containing most of the Canal, Panama City, and its surrounding communities, as well as the nature areas near Gamboa. We will be writing more about our impressions of Panama City, the Canal area, and retirement communities within the city in later blog posts. I can tell you now, though, although growth is overheated and traffic a mess, Panama City offers the urban retiree a great deal. For retirement in a tropical city, it is my first choice.
What about the practical considerations of life in a foreign land? Crime and safety are generally not an issue, except in certain areas, just as is the case in most places. The crime rate is low, but is no longer just petty crime. Utilities? Again, it depends where you want to live. Telephone is just about everywhere and is reasonable in price. Electricity and water service are sometimes erratic and the costs run the gamut, depending on location. Gasoline and insurance cost about the same as in the U.S. Taxes are low and retiree discounts abound. In general, the cost of living is lower than in the U.S., but rising as more ex-pats move in and the economy continues to heat up. As in any foreign land, be sure to secure the services of a reliable English-speaking attorney before attempting the purchase of real estate or obtaining various licenses and visas.
This was never intended to be a comprehensive guide to retiring in Panama; there are far too many issues to cover in one page. We will be adding more information in our Boomers Blog in the future. For great background on retiring in Panama, we suggest these fine books: Choose Panama . . . the Perfect Retirement Haven (Second Edition) orLiving in Panama.
If you want to comment on this article, there is a blog entry about Panama and Tropical Retirement.