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According to a study, an average person will spend 90,000 hours at work over a lifetime – that’s one-third of their life.
After giving a lifetime of effort and time to their work, a regular person usually wants to retreat to a peaceful destination with the rest of their life sorted out, away from all the hustle.
The Golden years, as they are called, are meant to be spent laying in a hammock, sipping a piña colada (if you like it), and watching a beautiful sunset at a location that strives to provide you with the best and most comfortable life, for the rest of your blissful time on earth.
But retirement, in itself, is a very subjective matter. Everyone wants to retire like a king (or a queen) but a “royal” lifestyle looks very different for different people.
Nonetheless, some preferences are shared by all retirees:
Working professionals all over the world, whether they are close to their retirement or not, are always on the lookout for places that fit the above-mentioned preferences.
And that is why we see an abundance of resources on the internet talking about ultimate retirement plans and heavenly retirement destinations.
With a global rise in the demand for remote work and a drop in the glorification of “the hustle”, more and more people are looking into and striving for early retirement.
This article is all about retiring in Panama. Some of the mentioned benefits, like the highly affordable quality healthcare, will sound too good to pass on, especially for US citizens.
But wait. Are perks and benefits the only things that one needs to know before setting up a practical retirement plan, or selecting a retirement destination?
We think not. According to us, the very first step in your ultimate early retirement plan should be to know your end goal.
Ask yourself, what are you trying to accomplish?
Is it an easy-going life in a foreign country that is the complete opposite of everything that you’ve known for the past couple of decades?
Or is it more of a hiatus, a mini-retirement of sorts – to gather your thoughts, and work on your next big idea while enjoying a fraction of the wealth you’ve saved so far.
Or is it a bit of both?
Whatever your end goal is, know that it’s a completely valid game plan, but you will need to actively map it out and work for it.
For people looking to relocate to another country after their retirement, the plan has to be even more thought-out.
After all, you don’t want to be stuck overseas with half your money gone, with no practical ways to make it back.
Don’t just select a country because of how beautiful it looks. Dig deeper, and ask yourself, why this country and not another one.
So let’s address this particular concern at first: How does Panama fit into all of this and more importantly, why Panama?
At Nomad Capitalist, we don’t believe in a “perfect” country. Governments change, borders shift, conflicts break out, and before you know it, the seemingly “perfect” country loses its perfection.
Perfection is a pretty subjective term so we won’t call Panama a perfect country for retirees, but it sure comes pretty close.
In fact, it regularly tops the charts when it comes to the best destinations for retirees.
Recently, the World Economic Forum ranked it number 1 on its list of the world’s best retirement destinations.
Panama was also one of our favorite picks for the world’s best countries to retire in.
So what is it about Panama that makes it such a retirement haven for retirees all over the world, especially American retirees?
Is it that Panama is one of the safest countries in Central America, or is it the all-year-round tropical climate?
Is it the abundance of American expat retirees, or its lucrative senior citizen programs?
The answer is, all of the above and more.
Panama is one of the few countries that brings almost everything to the table when it comes to a comfortable life for retirees.
Let’s look at some of the reasons to retire in Panama.
Panama may be a small country but it offers something to everyone, and we mean it.
Want to live in a luxurious gated community, or own an ocean view apartment? You might want to consider Panama city.
Sick of living in the suburbs and want to live the rest of your life chilling on a beach? Plenty of beach towns to choose from.
Not a beach person? The country has a beautiful mountainous region complete with thick forests, waterfalls, hot springs, and diverse wildlife.
Whether you are a city person or incline more toward seclusion, Panama has a place for you to call home.
The cost of living is one of the most important factors to consider if you are planning to move to another country post-retirement.
It won’t matter how nice the country is or how readily available all the amenities are if your limited pool of savings runs out in your first year.
You have to be smart about this.
Of course, quality of life in a foreign country is a huge preference, especially when we consider the golden years, but you have to choose a country that does not cost an arm and a leg for that.
When it comes to affordable living, Costa Rica and Panama are two of the best options in Central America.
When you look at the shining skyscrapers in Panama City or the level of readily available amenities, you almost would not believe how far your dollar can stretch there.
Let’s start with transport. You can usually take a bus across town for almost a dollar. If you are a student, a senior citizen, or a Medicare card holder, you’ll be further eligible for discounts.
Locally sourced produce and household goods come as cheap as 50% less costly than the US or European rates.
Furthermore, the quality of locally grown fruits, vegetables, and locally sourced seafood and meat is unparalleled. Talk about getting the bang for your buck.
No comprehensive country guide of ours would be complete without mentioning taxes, and there’s a very practical reason for that.
We deal with seven to eight-figure businessmen, entrepreneurs, and other successful professionals who consider themselves “Nomad Capitalists”.
Why does that matter?
Because while they also want affordable healthcare, beautiful scenery, and all such things wanted by regular retirees, they are especially interested in the immigration and taxation policies of a country so that they can live a life of freedom as a nomad.
Panama is a popular country among retirees, and for good reason. But that has also fuelled a lot of “tax-haven myths” about the country.
Some people have even been led to believe that Panama is a zero-tax jurisdiction, which is completely false.
While you can reduce your taxes and strive to pay 0% tax in Panama, it cannot be done without proper planning and professional help.
Panama has a territorial tax system which means that foreign sourced income is tax-exempt.
But be advised that the country levies capital gains tax and income tax on locally sourced income, on both, corporates and individuals.
Technologically advanced healthcare, world-class medical facilities, and English-speaking doctors – Panama city is a major hub for medical tourism for people looking to seek affordable treatment from all over the world.
But affordable healthcare in Panama is not limited to the capital city. Popular expat destinations like Boquete and Pedasí are only a short distance from other medical hubs all around the country.
Owing to the small size of the country, you will never find yourself too far from a quality medical facility, which is a huge plus point for many expats above 60.
Whether you are in a small town or a big city, you will never find any shortage of clinics, vets, or pharmacies, and the quality of the medical service is on par with the top hospitals in the US and Europe.
But that’s not all. In Panama, you will never have to dread a hospital bill, since even the best private medical care can be acquired at a fraction of the cost of US healthcare.
For American citizens, who have known embarrassingly costly healthcare all their life, this is not just a perk, this, oftentimes, is the ultimate concluding point in favor of Panama retirement.
Medical care is top class since it is provided by highly qualified doctors who have mostly studied in the US or Europe, hence their fluency in English.
Top hospitals all over the country are affiliated with some of the best medical institutions in the US.
Inexpensive hospital visits, low doctor fees, cheap health insurance, and easily accessible world-class medical care, all at a fraction of a price is what makes Panama an ultimate winner in this category for expat retirees.
Just like how there is no shortage of retired people who want to live their golden years in solitude, enjoying the culture of a region from the side-lines – there is also an abundance of retirees who want a thriving expat community to live this phase of their life with like-minded people from all over the world.
Panama scores well in both these preferences.
The country boasts a huge number of expats, especially American retirees and veterans.
Whether it’s Panama city or popular expat spots like Coronado or El Valle, you are bound to find expats in your surroundings.
The capital has a vibrant nightlife and you can always find plenty of activities to participate in.
If you are looking forward to being a part of a thriving retiree expat community, Panama will not disappoint.
One of the factors that are often ignored till it hits you in the face is the currency and exchange rate of the destination country that you have in mind for your retirement.
We pay for things every day, big or small. Paying in the currency you have been using since you were a kid is the default for most of us.
But usually, things change when you visit another country. Won’t it be super convenient if that wasn’t the case?
If you did not have to worry about currency rates and such.
That is exactly the case in Panama where one of the official currencies is USD, making life easier for the American expat population there.
Let’s face it, the reason why very few people hire domestic help in the western world is not a strong work ethic but rather a matter of affordability.
Like many things in Panama, domestic help is also easily accessible and affordable.
In Panama, you can get full-time domestic help for as low as $500 per month and the daily rates vary from $15 to $20.
That is less than half of what you would expect to pay in the USA.
If a comfortable laid back life is your ultimate retirement goal, hiring domestic help will considerably increase the quality of your post-retirement life.
Hiring domestic help will also free up enough of your time to do what you love – whether it be traveling, participating in expat community activities, or simply immersing yourself in the rich local culture.
So far, we’ve talked about natural beauty, world-class healthcare, affordable cost of living, and even the comfort of hiring domestic help that doesn’t break the bank.
But why is it that Panama always comes on top when many other countries in the world offer these perks too?
Panama is in the good books of American retirees among so many other expats because of its world-renowned Pensionado program.
The program is truly unparalleled when it comes to providing the best discount benefits, services, and perks to people who want to retire in Panama.
Since 1987, it has been one of the most popular retiree residence programs out there, offering the most appealing benefits to retirees all around the world at a price that may surprise you.
To acquire the retiree residence status in Panama, you have to prove a monthly income or pension of $1000 for life. For each of your dependents, that figure is $250.
Sounds quite a bargain, right?
But there’s more. People with the Panama retirement visa can then retire in Panama for as long as they like without needing to renew their visa every few months or years.
Apart from the monthly minimum income of $1000, the rest of the requirements are pretty basic.
The only requirements that are important to note are that you have to visit a Panamanian immigration office in person and also acquire a health certificate from a Panamanian doctor.
Once you get the retiree residence status and become a Pensionado, here are some of the money-saving discounts you can expect for the rest of your life:
In short, expect to enjoy 10% to 50% discounts on most of your purchases, activities, and bills, among other expenditures.
If that isn’t the ultimate value for your money, then we don’t know what is.
Now that we have talked about the top most attractive reasons to retire in Panama, let’s talk about where to retire in Panama.
We weren’t exaggerating when we said that Panama has something to offer everyone. From the beauty of its temperate mountains to the laid-back lifestyle of the beach towns, Panama has a place for everyone that they can call home.
Whether you are taking one of your many mini-retirements, or you have officially said goodbye to the “hustle days”, Panama will welcome you with open arms, offering comfort, safety, and breath-taking natural beauty.
Panama has no shortage of retirement havens – from bustling cities to quiet towns, you have a wide berth to choose from.
If you have been a city person all your life, and have no plans to change that in your Golden years, Panama City is the place for you.
People have this misconception that if a Central American location is affordable, or has a lot of natural beauty, then there might be a catch in terms of modern amenities or the quality of services.
The city of Panama proves it all wrong with its skyline full of shining skyscrapers, world-class healthcare facilities, a vibrant nightlife on par with Miami or San Francisco, and a diversity of culture that you’ll rarely find anywhere else.
You will never have to compromise on luxury in Panama City. From high-rise ocean view condos to world-class cuisine, always expect to get the best value for your money in Panama City.
With all that, do you believe that Panama city has a rainforest too? Only a short drive from downtown, the Metropolitan Natural Park offers incredible bird biodiversity, hiking trails, and so much more for nature lovers.
And how can we forget about the Panama Canal? An incredible structure of architecture and the lifeblood of Panama’s thriving economy, Panama Canal frames Panama city.
Panama city is also a major international hub for business investors and entrepreneurs.
With so much to offer and more, Panama city truly strives to provide a high-quality life to retirees looking to spend the best years of their lives.
If Panama city is for the city lovers who cannot imagine living in a slow-paced environment, the small green town of El Valle is exactly the opposite.
Sitting at an elevation of 2000 feet, El Valle has a cool climate and is known for its lush green surroundings, waterfalls, hot springs, and mountain trails, making it a perfect retirement destination for outdoorsy people.
El Valle is a few hours’ drive from the capital city of Panama and has long been a vacation spot for the Panamanian elites.
You will never run out of beautiful places to see in El Valle, but thanks to its thriving expat community, you will also never run out of things to do.
There are a variety of inns, restaurants, and hotels to accommodate tourists and locals, alike.
So if you want to live your retirement years in a cool climate exploring the wonders of nature while being in the welcoming community of like-minded people, El Valle is the place for you.
If staying healthy while living in a beautiful location is the aim, then the popular town of Boquete is for you.
Talking about Panama City and El Valle, we mentioned an abundance of restaurants. Although Boquete has its fair share of restaurants too, you will find that people generally prefer locally sourced fruits, vegetables, and seafood over restaurant meals.
The entire vibe of Boquete is very laid-back and refreshing with people who prefer walking over driving and participating in social activities over living an inactive life at home.
People generally socialize more, eat healthily, and participate in activities like dancing, etc. There is also a yearly jazz festival.
The simple lifestyle full of socialization and movement-filled activities has a tremendously positive effect on retirees who are looking for a healthy lifestyle without putting in a lot of conscious effort.
Living in Boquete will not restrict you from a glam life or quality healthcare though. Less than an hour’s drive away from Boquete is the town of David, brimming with restaurants, clinics, and malls.
So you get the best of both worlds here.
Talking about Panama retirement, so far we have discussed why to retire in Panama, how to retire in Panama, and where to retire in Panama.
But as we stated before, the concept of “perfection” is very subjective, and what works for one retiree may not work for another.
So, here are some of the things you may want to consider before choosing Panama to retire.
Wondering how this can be a disadvantage when we mentioned it as one of the best things about Panama?
The tropical climate is great for most people, as it’s not too severe and does not limit a lot of outdoor activities.
But what about people who have known a colder climate all their life. Their tolerance to a hot and humid climate might even be non-existent, making the place insufferable for them.
If you are from a colder region, take this into account before moving to Panama because this isn’t something that’ll ever change throughout your stay in Panama.
If you plan to “no hablo español” your way through every conversation in Panama, unfortunately, it won’t work.
Thanks to its large expat population, many locals understand and speak English in Panama, but certainly not all of them.
The official language is still Spanish and you will have to learn at least some of it to have a functional life in Panama, taking part in conversations that don’t frustrate you.
The capital city definitely has a traffic problem. It’s a major economic hub and a top location for medical tourism, attracting people from all over the world.
The major tourist spots are usually crowded and even the non-touristy spaces are rarely empty.
This situation is not different from many western countries that attract a lot of expats, but if it still bothers you, you might want to look at other destinations in Panama to retire.
Major platforms like the World Economic Forum and International Living have termed Panama one of the safest countries to retire as an expat.
Moreover, the huge population of expats, especially American retirees in Panama speaks for the safety standards in the country itself.
There is no direct Panama citizenship by investment program, but you and your family can apply for Panama citizenship after living 5 years as a Panama resident.
Yes, Panama has one of the largest varieties of residence programs you can find anywhere:
If by tax haven you mean a tax-free country, then Panama is far from a tax haven. You can reduce your taxes drastically by moving to Panama but that requires a lot of planning and professional help from financial advisors.
There is no doubt that, with its huge variety of residence programs, tax incentives, and thriving economy, Panama is a dream destination for many retirees around the world.
But you still have to be smart about moving to Panama. Plan it wrong, and the benefits can soon turn into lifelong headaches.
Tired of doing all the saving and the planning all by yourself your entire life? Contact us.
We have done it ourselves and for our clients, and we would love to develop a holistic strategy for you.
Trust us with your golden years and spend the rest of your life in a place where you are treated best.
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Retire in Panama: The Ultimate Guide for 2022 – Nomad Capitalist
Founder of Nomad Capitalist and the world’s most sought-after expert on global citizenship.