The Truth About the Cost of Living in Panama

“What is the cost of Living in Panama?”… Viva Tropical’s Park Wilson and Josh Linnes launched the site in an effort to educate would-be expats on the realities of life in Latin America.  They hope to help others have the information they need to make informed decisions when relocating to Central and South America.

Cost of Living in Panama

Photo Credit: P. Peter

They also wouldn’t mind debunking a few of the false claims made by marketers who are trying to lure folks down to the tropics under false pretenses.  Here, Park talks about one of his particular pet peeves.

I guess you see a lot of extravagant claims promising a perfect life in paradise.  What are some of the worst?

Park:  “Move to Panama and live on $500 a month!”  “You can move to the great town of David and live like a King!”  I’ve been an expat in Panama for 6 years now, after a brief stint in Costa Rica.  Not only am I surrounded by others in the expat community but, as a real estate developer, I’m also surrounded by the folks who are making these ridiculous claims.

Marketers deliver a lot of really misleading messages about moving here, but the ones about the cost of living are the ones that really make me sick to my stomach.

So, it isn’t really cheaper to live in a place like Panama?

Park:  No, it totally is!  I mean, it can be.  I mean…well, it depends.

Let me explain.  If you plan to move down here and continue doing and buying all the exact same things that you did in the U.S., you might actually pay more.  In other words, if you want the same brand of cereal you eat every morning back home and your usual flash frozen steaks flown in from Omaha, then you can get those things.  But at a fairly high premium.

Are you saying people need to be ready to make some sacrifices?

Park:  Not at all.  Quite the contrary, actually.  You will need to make some changes, but I wouldn’t call them sacrifices at all.  Let’s go back to the steaks, for example.  My family buys filet mignon for $5.50 a pound, and we eat a heck of a lot of it.  But it’s local beef, not imported.

We also steer clear of most things in a box or jar, because those things tend to be more expensive than in the U.S.  But the way we see it, those things were probably taking a few years off our lives anyway.  I don’t consider that much of a sacrifice.

So how do marketers get away with lying to their potential customers?

Park:  I wouldn’t say it’s an out and out lie.  It’s just misleading.  In a country with a per capita GDP of $600 per month, you could probably get by on $500 a month.  It just wouldn’t be the standard of living you’re probably looking for when moving to a place like this.

To live on that little, you’d need to live like a local.  Eat only local foods, patronize local establishments.  We’re talking 47 cent beers, 10 cent bananas, and big bags of rice for a few bucks.  You could do it.  But you would also experience a huge shift in your standard of living.

If that’s what you’re looking for, then great!  Just know that before you make such a big decision.

How do you strike a balance between having the things you’re used to in the U.S. and taking advantage of the lower cost of living in Panama?

Park:  It’s all about finding that sweet spot.  There are a lot of items in a household budget that can be obtained at a great value in Panama.  You just need to pick the ones that line up with your values.  Here are a few of ours.

  • Domestic help.  We have someone who works in our home every day:  cooking 3 meals, buying our groceries, doing laundry, even babysitting our kids when needed.  All for just $300 a month.

  • Fresh foods is another category.  We eat so well at our house.  But we don’t eat like we did in the States.  And because we have help with the cooking and more time on our hands, we don’t have to eat hamburger helper.

  • Another place you can save on expenses in Panama is in medical costs.  My daughter was born in Panama last year, and we saved $27,000 compared to what we would have spent in the U.S.  But even for routine health care, the cost is much lower.  Doctor visits are $5.  Antibiotics cost $10.  Our insurance premiums are also much less, and we even have a policy that works in the U.S. too.

  • Travel is another biggie.  There’s so much to do, and it’s all so close.  We love to go to the beach, take the boat out to nearby islands (including my own project), visit new areas…and it’s mostly all in Panama.  We save a lot by traveling within the country.

So, what’s the magic number?  If an expat can’t get by on $500 a month, then how much?

Park:  It’s hard to say, really.  It’s all up to you and the areas where you plan to splurge and save.  No one can give you a guarantee on what it would cost for YOU to live in Panama.  What’s more important is to look at your own habits and tastes and have realistic expectations about the lifestyle you can afford here.

For me?  I spend about a third of what I would in the U.S.  And I wouldn’t change a thing.

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21 thoughts on “The Truth About the Cost of Living in Panama

  1. Pam Robinson

    Very helpful info! But please tell me what health insurance that you have that also covers trips back to the states?
    Thanks — Pam

  2. 3

    Having lived here since 1998, I wanted to mention also some additional variables that decisively factor into that “live well in Panama” equation:

    1. Source of income. If you work for a local company within local salary thresholds, the real “net savings” on costs of living, comparing to other countries, may actually turn out to be losses. Weak and sometimes missing social security networks you would normally count on, are now not really an option (since they don’t work or are just none existent). Sure, you can try to rely on the CSS (caja de seguro social) for example – it’s not as simple to get in to it in the first place and secondly, once you are actually in… well CSS is not exactly reliable all of the time…
    2. Trade-offs. Many things that come to mind on where and how to save money are not as easy in a developing country as they maybe elsewhere. And most has to do with security. So, one of the biggest costs here will be the cost for housing (rent or buy). As a foreigner it really wouldn’t be advisable for instance to opt for a cheaper place to live – since this will likely also mean that you will trade off your physical security.
    3. Missing scaled economies. Being a very small country many industries can’t leverage on scaled economies and unit prices are high for many things – especially electricity and food. Again – all this is observed from a point where you actually depend on local salaries. If you receive your income from abroad, things will be cheaper here most of the time.

    There are many other points to consider if you “really” want to live here. In conclusion, my message would be that if you look mainly for an economic edge or advantage to live here (or in any other developing country for that matter), while trying to earn your living locally (read “low salaries”), then Panama may not be the right choice. But if you look at the adventure of things, exploring new cultures and people, enjoying the fantastic tropical nature, islands and oceans, while accepting the risks (health, wealth and security) which in Panama are far lower than elsewhere in the region, Panama is a great place to be.

    Just my personal opinion, thus far :)

    • 4

      I live on 800 a month live I sell at events and markets ,it been slow lately .are there
      events to sell in Panama? where can I get the answer to this .I speak,Spanish ,german
      I used to live in Mexico on 500 a month 25 years ago .If a get the answer I go .

  3. phaedra garvey

    Great info guys! I am originally from jamaica. Living in ny and plan to make panama my home along with my mom.

  4. larry jeffcoat

    someone please tell me how to move todavid ,panama i am cancer suvivor & want to live the rest of my life by the turqoise water i am 60yrs &get 1400 a mobnth

    • 7

      @ Larry, thanks for taking the time to comment. David, Panama is a great jumping off point for adventure and expat living in Chiriqui Province. You might also want to consider Boca Chica, about a half-hour drive from David, which is a whole new world (and living style) waiting to be discovered.

  5. Shelby Borden

    We have been looking for a tropical place to spend our winters. We have been to Mexico, nicagraua & Costa Rica but not to panama. We may go there in the winter of 2015 to check it out. We do not like large cities or touristy places but we like the ocean. Any suggestions?

  6. 10

    Most discussion seems to be about the secondary cities like David. I realize Panama City may not be everyone’s taste, but it would be useful to have some idea of costs in the capital. I assume they are considerably higher than other parts of Panama, particularly for (secure) housing.

  7. Ralston Wright

    i am a retired cop thinking about moving there and i would like to get a job in law that a good idea (mainland police officer)where would i start looking.

  8. 12

    Have been thinking about taking a “look around” trip to Panama with the possibility of moving there. Lived in the Philippines for 15+ years on and off from 1965-1993 so know what 3rd world is like and the growing pains to the 21st century. But now up in age (67) and a number of health issues, however miss the lifestyle of tropics and the beach. Would need to be relatively close to medical facility, (David?) and the cooler weather, yet easy drive to beach.

    What do you think??? is this doable? Also anyone or company can you recommend to show us around for a couple weeks at a reasonable price? Don’t want to waste my time not knowing where to go and not know the area. Appreciate any info

  9. 13

    I would like to live there, in an upper middle class area, nice family environment. What are the job opportunities like there where and how can I find out.

    • 14

      Jobs in Panama for most are hard to come by, for foreigners, near impossible, especially if you want to live where you say. In fact, the pay may not even be enough for the gas to and from where you may want to live. It’s that bad! On the other side, being self employed in a carefully thought out venture from what I’ve seen is has a great chance of success. Good luck!

  10. 15

    I’m 60 years old, retired with a government pension of $1,700 per month net after US income tax. I’m new to this expat idea. I like the slower pace of a small city, but one with shopping for groceries, household goods, clothing; and modern medical facilities. I’m looking to rent a cottage or apartment. I prefer a city on the the Pacific Coast. Is there a website that publishes lists of rentals and prices for permanent residence? I would like to get an idea what the cost of renting is in various Panama communities. Any info. is appreciated, thank you.

  11. 18

    I love the article thank you. Is there any chance I could get info on the person that did the cooking shopping and cleaning for $300 a month, that sounds legit!!! Its my second time out here and my brothers third we had quite the experience you can check that out here if you want

    The cost of living really does depend on the choices you make out here and how much of a tourist you look and sound like. Just today these taxi drivers tried to charge us $15 to go about 3 miles away when its normally $2.50.

    I would say speaking a little bit of Spanish goes a huge way when dealing with taxis.

    And we got our 2.50 taxi eventually.

  12. 19

    Hi! You are a real estate developer, need any help? General contractor from the states looking for partial relocation. Anyway great info!

  13. 20

    Hi,can I get around with just speaking english? I am a house painter/general maint. contractor looking for self employment in panama. I have a pension of 1600.00 dollars. What is the outlook for my type of work? I might also dabble as a caretaker. What do you think? Andy from

    • 21

      Hi Andy, thanks for commenting. If you stick in an English speaking community, then sure, your lack of Spanish will be fine. While some Panamanians do speak English, the majority do not, but if you learn a bit of Spanish, and try, they are more than accommodating. working in Panama means needing a work visa, which, if you retire under the Pensinado program makes you illegible, therefore think about a friendly visa nation instead.

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