Is Panama the Right Place to Retire?

PanamaI’ve been trying to figure out a good place to retire that’s not, well… Ohio!!  I’ve lived in Ohio for most of my life and it’s done well for me, but why live in a place that ever snows?!!

The answer is simply that I have roots here… friends, family, stable job, and so on.  Pulling the trigger to move out of your comfort zone is a tough thing for most of us to do.  And the problem is that once you have kids, they start to establish their own roots, and the cycle continues.

My brother made the move probably around the age of 30 and hasn’t looked back.  He moved to Florida without a new job or knowing anyone except his wife (girlfriend at the time).  It takes a lot of cojones to do this so I give him real props.

The best part is that his move is one that can stop the cycle.  If you make the move and then have kids down the line, those kids won’t be establishing roots in the same place you’re “stuck” in.

I almost made the move in my 20’s – my wife (girlfriend at the time) and I were planning on moving to Arizona.  In fact, I was so far in the process that I had actually turned in my notice at work and let my boss know the plan.  However, a couple of days later, he made me an offer with a new position and salary boost.  It was too good to pass up and I’m just wrapping up year number sixteen with the company.

Depending on how you look at it, that was either very fortunate or unfortunate.  On the plus side, I make good money, my boss has always taken care of me, and my office is a great place to work.  Who knows if I would have been in a position this great living in Arizona?  And I’ve really socked away a good amount of money to put toward retirement.

However, I might have missed my chance.  Since that time, I’ve gotten married and have a daughter who’s about to start kindergarten.  So now if I make the move, I need to take her out of school and she has to start all over.  I still have a few years before she really makes friends that would make this even harder to do, but this is the part of the cycle that is hard to break.  And it’s not to say this is an impossible task, but my point is that it does make it more difficult to make the move with each passing day – probably until she would be out of school.

Then there’s family.  All families are crazy and I’m sure we’d all like to get away from them for a while… but down the road, your family is, well… still your family.  So that becomes part of the decision on moving.  Of course, they could always vacation down there or we could come back to visit them, but that would probably be pretty infrequent.

And, of course, there’s the job.  With my route to retire in process, the job part should become irrelevant in less than 10 years.  But for now, it’s still something keeping me from just leaving now instead of waiting.

For now it’s just a fantasy, but I would love to move somewhere with great weather, low crime, good medical facilities, and where you can get a lot more bang for your buck.

I’ve done my digging, and right now the country of Panama seems to fit the majority of what I want.

Although I’ve never been there (yet), you can find areas there with year-round 75 degree weather, low crime, medical care that equals that of the U.S. and the dollar is worth a little bit more (though not as much as it used to).

Panama is also known to be friendly to expats (people who have citizenship in a different country), particularly the U.S. because of work relationship throughout the years on the Panama Canal.

One of the biggest perks of Panama is the retiree program they offer.  Called the Pensionado Program, here are some of the benefits:

  • 50% off entertainment such as movies, theaters, sporting events, etc.
  • 50% off hotels during the week (30% off on weekends)
  • 30% off public transportation (buses, boats, trains)
  • 25% off airfare
  • 25% off restaurants (15% off fast food)
  • 25% off your energy bills (electrical, phone, water)
  • 20% off doctors and specialists
  • 15% off hospital bills
  • 15% off optometry visits and dental services
  • 10% off prescription medications
  • importing of household goods, up to $10,000 tax-free
  • importing a vehicle or buying a local vehicle every 2 years… tax-free

Did you just read that list?!  That’s huge!!  That list can probably save you a good $10,000 a year… holy cow!!

The requirements to get the Pensionado Visa are:

  • A monthly income of $1,000 for life.  This needs to be from a guaranteed source (pension, annuity, social security, etc.).  This amount is the total even for a married couple.
  • Or you need an income of $750 per month and the purchase of real estate in Panama with a $100,000 minimum
  • An additional $250 monthly income for each dependent child

So for us, we would need to come up with $1,250 per month in guaranteed income.  That’s $15,000 per year.  That’s not a tremendous amount of money per year, but the guaranteed part is what we would need to figure out.

Pretty interesting stuff though.  And as an added bonus, as long as you continue to meet the requirements, you are grandfathered in and can never lose your benefits.

There are a lot of articles out there discussing the pros and cons of retiring in Panama (here’s one:  And there are also tons of articles about retiring in other places.  For some reason though, Panama has just struck a chord with me.

However, stopping the cycle would put the hard part on us.  We would need to be the ones who don’t get to see our friends as much as before.  Making close friends is never easy, but it’s even harder once you’re older because most of us get comfortable in our zone and we also don’t have places like school to meet new people.

But that would set our daughter up to establish her roots and make all of her friends there.  She would grow up knowing “paradise” as her home and the cycle would possibly then make this her new home for her future kids and grand-kids.

Well, it’s just a dream right now.  If I follow the plan, I still have another 10 years until retirement.  But maybe – just maybe – we’ll be able to make the dream a reality one day.  I just need to convince my wife that we should be the ones to move there to break the cycle.  And in ten years, my daughter will be halfway through high school, so that might present new problems.

Guess we’ll have to wait until we get closer to figure out if this will ever happen!  I think we’ll take a vacation down there to see if it’s as good as it sounds.

What do you think?  Do you have dreams or plans to move to a paradise somewhere?

Thanks for reading!!

— Jim

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10 thoughts on “Is Panama the Right Place to Retire?”

  1. I love this article, Jim! We’re on a similar path (though I think it will be many years into our retirement before we settle on a single place), and the sticking point for us would also be the “guarantee” portion of the income. I wonder if there’s a way around it, such as depositing the entire visa’s worth of “monthly” income into a local bank (like Thailand) or simply showing it in liquid assets (like Spain and others). If not, I suppose if we were really, really sure and motivated, we could purchase an annuity… but that idea makes my skin crawl 🙂

    1. I stumbled across a website the other day that I thought was pretty cool… People ask questions on it and you get a bunch of answers – mostly from people who are expats living in Panama and can answer the questions more specifically. They answer some of the specifics of the guarantee portion of income as well. There are also some other countries they have on the site as well.

      We are actually starting to dig into possibly taking a trip out there to visit and scope things out a little bit. It’s still just a dream right now, but a trip out there would make it one step closer to reality!

      — Jim

  2. Lived in Panama for 5 years (single) in one of those buildings in your photo of Punta Paitilla – some of the most fun years of my life!
    Present day has me in Florida, married, with 6yr old TRIPLETS!!! So my FIRE plan got doused with some serious water and I’m doing some major tweaking of timeline as well as expenses. It will STILL happen though…

    As for Panama – I’ve now substituted Guatemala. Not the same, but much cheaper and I have some infrastructure I put in place many years ago. If nothing else we can be comfortable down there a few months out of the year and back stateside the rest of the time – the money goes a lot further that way.

    Being quite familiar /expat life and the reality of family members used to the ‘easy’ life (conveniences) of the USA; I can confidently state the seasonal/episodic location change answers the mail not only $-wise, but can scratch some travel itching along with other cool cultural/learning advantages that are important to development as you advance through the years.

    Still love Panama though! Good luck!

    1. Hmmm, I have a daughter about to turn 6 that caused me to change up my FIRE plan… I’m thinking my plan wouldn’t have worked if I had triplets! 🙂 Glad to hear that you’ll still be able to get there though!

      I’m also glad to hear from someone who actually lived in Panama. Sounds like it was a great time for you! I definitely need to try a vacation there so I can scope it out a little better.

      I haven’t heard too much on Guatemala, but it seems like you have something good ready to go out there which is fantastic!

      Good luck to you!!

      — Jim

  3. Hey, thanks for sharing your story! My mom is thinking about retiring in Latin America (she has a pension as well) and I’m excited to share this post with her.

    Re: uprooting your daughter – if you’re going to move to another country, now is the time to do it. Middle school and high school are the toughest. (I moved around a lot when growing up but explained to my mom at the end of middle school that I “refused” – haha yeah right – to give up my friends again.)

    Although, my two best friends (sisters) moved to Mexico during high school, and – although somewhat tramatic – it seems that they really appreciate the bicultural advantages as adults.

    Good luck!

    1. That’s exciting for your mom and really cool!

      Since I wrote this post, we’ve now actually booked (most of) a trip to Panama for this summer to investigate further (half vacation, half recon mission!). I’ll be presenting the good and bad that we learn on this trip once we get back. I’ll also have a better idea if we’re going to pull the trigger on moving there.

      I’m still conscientious of uprooting my daughter, but it is what it is. Hopefully, if we do pull the trigger, she’ll look back later and appreciate the opportunity. It’s good that your best friends did!

      — Jim

  4. Panama is on our short list as well! So many great benefits, with the perfect Central American weather.

    We live in Colombia right now and hear great things about Panama from expats. You really cannot beat the Caribbean weather, plus I think Panama is one of the more developed countries down here, which will make the adjustment easier. I’m excited to hear what you think after your trip!

  5. Hi there, Now that you’ve looked around a bit; were you able to chat with anyone on the ground that was able to quell your fears around the monthly requirements? I too will have the same problem (but it’s MX for me). I have the money, but not in an official pension (it’s rental and investment income). The reason I ask is that people can Google and copy/paste the rules on these forums but often the expats who have lived down there for a while can tell you about the unwritten rules or how to perhaps by-pass them altogether.

    1. Hi Rob – yes, I’ve definitely learned a lot more since I first wrote this post a couple years ago. We just spent about a week and a half in Panama earlier this summer and I talked to everyone I could about everything I could think of that I wanted to know.

      What I learned is that the Pensionado Visa wouldn’t work for me for a couple reasons. The first is the guaranteed income requirement. However, the more important one is that with that Visa you can’t work. And right now, I don’t plan to get a job, but I’m still young and that desire could change.

      I do plan to keep up with my blog and continue to monetize it. I might be able to do that regardless since that doesn’t take away from any Panamanian jobs. However, getting a different Visa like the Friendly Nations Visa ensures that I have more flexibility regardless. I lose some of the Pensionado perks with that, but after seeing the costs there first-hand, I’m A-Ok with that!

      Good luck on your plans for MX!!

      — Jim

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