The recent attention Panama has been receiving as a great place for retirees points out why a Panama retirement is a valuable choice. For many baby boomers considering a move offshore, this tropical destination provides many options that other Latin American countries don’t offer.

With its close ties to the U.S., continued infrastructure improvements, and a vibrant historical and cultural atmosphere, Panama should be on everyone’s “short list” for retirement meccas. AARP has named Boquete, Panama as one of the top places to retire abroad. The growth in the real estate market in Boquete highlights the Panamanian potential as a long-term retirement or investment option.

Judy Chartrand

Why Is a Panama Retirement Such a Valuable Choice? The Reasons Are Below:

In the last several years, Panama has made a concerted effort to attract expats, especially retirees, to become part of Panamanian life. The results of this effort has definitely increased the extrinsic and intrinsic values of this Central American country as a retirement choice. Below are some of those highlights:

Panama Is the Complete Retirement Package

• Climate: Panama has a range of climate choices that can meet any retiree’s requirements. From the cool mountain temperatures of areas like Boquete and Santa Fe, to the tropical beachfronts of Panama City, to the island breezes of the Las Perlas and San Blas Island groups, finding that perfect blend of weather and temperature is far easier than in many other tropical locations.

• Culture: It is very easy to become immersed in Panamanian culture. The rustic towns, like David and Chitre, offer a welcome change from the larger urban setting of Panama City. The Azuero Peninsula, with towns like Pedasi and Las Tablas are widely recognized as Panama’s cultural and historical heartland that retirees are beginning to discover for themselves.

• Getting There Is Easy: Panama is easily accessible from the U.S. and Europe. With direct daily flights from fifteen U.S. cities, on international carriers such as United, Delta, American, and Copa, being able to fly to your tropical getaway is both affordable and easy to arrange. Domestically, Air Panama is expanding its service to new locations, such as Pedasi.

• Becoming a Resident Is Easier Than Ever: The Specific Countries Program that has been in place since 2012 has made it possible for holders of U.S., Canadian, and European passports to become residents within six to eight months. The process itself is relatively uncomplicated. Learning about the residency process and the straightforward requirements is just another part of understanding why Panama is a great choice. 

• The Currency Is Familiar: Although Panama’s official currency is the Balboa, the country has been using the U.S. dollar as legal tender for all transactions for quite some time. Not having to negotiate currency exchanges or understanding how to convert the price of something into U.S. values not only is more convenient but also makes price comparisons easier as well.

• It Pays to Be a Retiree in Panama: Once you have qualified for the pensionado (retirement) visa, there are a lot of money-saving discounts that you can qualify for. Here is a partial list that clearly demonstrates how affordable retiring in Panama can be.

Magda Wojtyra

Retirees are also entitled to a one-time tax exemption, up to $10,000, to import household goods. Additionally, there is a tax emption every two years for the purchase or importation of a personal vehicle.

Nelson de Witt

Panama Is a Great Place for Retirees to Invest and Prosper

Panama stands out as one of the very few Latin American locations where retirees can anticipate a strong return on their initial investment. Between a growing real estate market, favorable pricing, and active government support to make Panama an attractive place for expat dollars, the long-term potential for the growth of your retirement nest egg is strong.

• Increasing Housing Prices – Like most of the world, Panama’s real estate market suffered during the financial downturn of 2008. In the last few years the market has rebounded, making investing in property a solid proposition for financial growth and a good return on your initial purchase price.

While there are some areas where larger foreign developers have purchased large tracts of property based on the speculation of what they might be worth when fully developed, purchasing your retirement retreat can still be done for a reasonable price. The continued rise in property values will, in turn, add to the return you can expect when you decide to sell.

• Reinventing Yourself – Unlike its neighbors, Panama actively supports skilled professionals and investors who want to work and contribute to the Panamanian economical revival. Under the Specific Countries Program (mentioned above), obtaining a work permit is straightforward. The program is somewhat controversial, however, and checking with a skilled immigration attorney is an important step in the process.

• Favorable Real Estate Tax Structure – Property taxes in Panama are far less than those you would expect in the US. The tax basis is the value of the land and declared value of any improvements. The maximum tax rate is only 2.10%. Importantly, the government offers a generous property tax exemption for residential properties.

For properties whose value is $100,000 or less, taxes are exempt for 15 years; between $100,000 and $250,000, ten years and, for values above $250,000, five years. For most retirees, the prospect of not having to pay any property taxes for an extended period, translates into a tangible uptick on the money they will have to spend elsewhere.

Panama’s Value Combines the Tangible and Intangible Elements for Retirees

Taking the time to research the Panamanian potential should be a part of your retirement planning. As you look into what the country offers, visit and explore the various regions, and experience Panamanian life, you will truly understand the value that a Panama retirement can hold for you.