Also, Panama is nice sized, as it comprised of just 30,193 square miles, making it slightly smaller than the U.S. state of South Carolina. Its population is estimated to be 3,242,000.
As you might expect, Panama’s cuisine has a definite Spanish or Mexican flavor. One of its main dishes is Carimañola, a roll that’s made from boiled and ground Yucca and is filled with chopped meat and boiled eggs.
Another Panamanian favorite is Empanadas, which is something like a Cornish pastry. Other Panamanian dishes include Tortillas, Tamales and Patacones – which are green fried plantain. Another local favorite is Tajadas – a ripe plantain cut in slices lengthwise and baked with cinnamon.
The cost of living
Panama may be a retiree’s paradise. Its cost of living is much less than that of the U.S. You can buy most consumer goods in Panama for a fraction of what you’d pay in the States. A U.S. style house can be built for about $40 a sq. ft., a full time live-in maid costs $120 to $160 a month, an afternoon at a beauty salon roughly $8, electricity is about 10 cents per kilowatt hour and phone service around $30 a month.
Panama also has an amazing program called Pensionado. If you are a resident “pensioner” under the Persionado Visa, you become eligible for a program that has benefits that are unavailable any place else in the world
For example, if you are in this program, you will get a discount of 50% off entertainment anywhere in the country, 30% off bus, boat and train fares, 25% off airline tickets, 25% off restaurant meals, 50% off closing costs for home loans, … and much, much more.
Panamanian taxes are amazingly low. If you build a house in Panama, you owe no property taxes for 20 years. Personal income tax in Panama is based on a sliding scale that ranges from a minimum of 7% to a maximum of 27%. However, this is a bit misleading because income taxes are applied only to income earned in Panama. There is no tax on foreign income. Let us repeat that. There is no tax on foreign income. If your income comes from social security, a pension, or stocks, bonds or municipal funds in the U.S., Europe or any country other than Panama, you will not pay a nickel in income tax.
Also, if you qualify for the Pensionado program, you will get a one-time exemption of duties on the importation of your household goods and an exemption every two years on the importation or purchase of a car in Panama.
As you can see, there is good reason why Panama is famous for its light tax burden.
Real estate in Panama
Buying property in Panama is relatively simple. You will enjoy the same property ownership rights as Panamanian citizens and will not have to deal with the all the painful property laws that exist in some other countries.
As an example of Panamanian real estate prices, there is currently a three bedroom, three-bath home in an exclusive, closed residential complex listed for $295,000. Want to spend less? There is also listed a new, beach townhome close to Panama City with two bedrooms and two baths for $158,000; and a duplex in Punta Barco with two bedrooms and two baths with an asking price of just $109,000.
If there is a fly in Panama’s ointment it is the country’s climate, which can be very hot and humid. Its climate is classified as tropical, meaning that temperatures are uniformly high, as is the humidity. A day in the dry season (January - March) typically sees a low of 75o F., and a high of 84o F. The temperature may exceed 90 o F. but only for a short amount of time. Temperatures on the Pacific side of the country tend to be somewhat lower than on the Caribbean side.
Rainfall in Panama is four to 10 feet a year, depending on the region. For example, the average annual rainfall in Panama City is about half that of Colón.
Retiring to Panama
If you plan on retiring to you will want to get in the Pensionado program.
To qualify for this program you must be 50 or older and show proof of a monthly pension from a well-known company or a government entity (think U.S. Social Security) of at least $750 a month and invest at least $100,000 in Panamanian property.
You must show documents that were authenticated by a notary and the Panamanian consulate nearest you or by a notary and what’s called an Apostile, which is a faster way of authenticating documents in the U.S. You will need a clean, a Panamanian health certificate and your valid birth certificate. As you might imagine, there are some other requirements. You can get details on them at your Panamanian consulate.
Spanish is Panama’s official language though many Panamanians are bilingual, probably due to the fact that the U.S. owned the Panama Canal for so many years. You should not have much trouble visiting or living in Panama even if you don’t speak a word of Spanish.
Panama’s economy is heavily dependent on the Panama Canal, which produces revenues of about $1 billion a year (U.S.).
The country is in much better shape financially than its Central American neighbors. The annual inflation rate has been an amazing 1.3% for the past 30 years.
Panama’s economy is a free market economy based mainly on the service industry – heavily weighted towards banking, commerce and tourism. Services other than the Panama Canal include the Colon Free Trade Zone, container ports, insurance, medical and health. Its leading industries are the manufacture of aircraft spare parts, cement, adhesives, and textiles. Panama’s leading exports are shrimp, bananas, coffee, sugar and clothing. Its nominal GDP (Gross Domestic Product) has grown steadily over the past eight years and has been especially strong in the transport and communications sectors.
Health care in Panama is quite good and there are modern hospitals in all metropolitan areas. The city of David in the Chiriqui Province has a great medical center with modern facilities. Many Panamanian doctors are U.S.-trained and standards at the country’s top hospitals compare favorably with those in the U.S. There is private health insurance which is much cheaper than insurance in the U.S. The prices of prescription drugs are also very low. Many drugs that require a prescription in the U.S., are available over-the-counter in Panama.
There are several museums in Panama City, including the Religious Colonial Art Museum, the Natural Science Museum, the History Museum of Panama and Reina Torres de Arauz Museum.
Panama City also boasts a Contemporary Art Museum. Outside the city is the Archaeological Park of El Caño, which has a sample of the Cocie Indian Culture, complete with a burial site, and tombs, ornate columns, and a typical hut. Other noteworthy museums in Panama’s interior are the Religious colonial Art of Santo Domino de Oarita Museum, the Herrera Museum and the Belisario Porras Museum.
Where to Retire in Panama? Our picks for the three best areas for retirement
Panama has a number of areas where expats tend to reside. Three of the most popular are Boquette, the Pearl Islands and Panama City
Boquette. This city has become very popular with retirees and other expats because it has spring-like weather year ‘round and wonderful scenery with coffee-covered hillsides, crystal clear rivers and waterfalls.
Boquette is just 30 minutes from David, the capital of the Chiriqui province and nestled among the country’s mountainous region at 3,600 ft. In addition to offering an almost ideal climate, Boquette has outdoor activities galore, including birding, biking, rafting, hiking and much more.
A recently renovated villa in Boquette listed for $199,000. It has parking space for two cars, a fully equipped kitchen with pizza oven, a great view of the Boquette Mountains, fireplace, as well as two bedrooms and two bathrooms. Beautiful canyon view condos, with two bedrooms, two baths and 1,289 sq. ft. were listed recently for 4141,500.
The Peal Islands. While this is more of an area than a city, it is rated as a great place to live as it is just a 15-minute ride from Panama City, yet offers clear, aqua waters, lush vegetation, an amazing variety of sea life and sparsely populated beaches. If you happened to watch the 7th and 8th seasons of CBS’ Survivor TV shot, you have already seen some of the Pearl Islands.
The Pearl Islands offer numerous water-oriented sports, including diving, snorkeling, sport fishing and sailing.
The most developed and visited of the Pearl Islands is Isla Contadora. It is just 1.4 square kilometers in size but has a total of 12 beaches, most of which are unoccupied except for major holidays and other special dates.
How much does a house on the Pearl Islands cost? Well, as a rule, they are not inexpensive. One Mediterranean Villa on Contadora Island with three bedrooms and three baths was recently listed at $399,000; and there was a 1,485 sq. ft., corner condo unit with views of the Panama Canal and an asking price of $310,000. This unit had two bedrooms and two baths.
Panama City. Panama City has a population of about 814,00 and a metro area population of 1,207,000. It is the capital of Panama and sports a dense skyline with mostly high-rise apartment buildings and condos. It is Panama’s hub of international banking and commence and has advanced communications services – for example, Internet use is widespread.
Panama City offers access to electric service, potable water, sewer lines, telephones, and cable TV service. Cell phone service is also very accessible.
The city has 12 hospitals and offers good quality medical care.
As of this writing (July 2010), Panama City had more than 110 high-rise projects under construction with 127 high-rises already built.
In addition to apartments and condominiums, Panama City has also single-family houses. One such with three bedrooms and three baths was recently offered at $234,000 while two others were listed at $199,000 and $205,000 respectively. Both these have three bedrooms and two baths. On the more luxurious side, there was a four-bedroom house listed at $540,000.
Low or non-existent taxes, great beaches, affordable housing, a modern infrastructure, a bustling economy, and good health care are just a few of the reasons why Panama is one of the world’s 10 best places to retire.