We have quite a few family members that are at retirement age, and some have asked us where in the world they should retire. Often, retirees seek warmer climates, better healthcare, and a lower cost of living, so their pension goes further. Fortunately, there are lots of countries to choose from — many of which offer special immigration visas and financial perks to retirees. We are going to write a series of articles to find the best spot to retire abroad, but let’s get started with Panama.
Why Panama?
Panama is a gorgeous country in Central America. No doubt, you have heard of its famous canal that changed maritime transportation by linking the Atlantic and Pacific Oceans. Its tropical climate means you can stay warm year-round. The country has a stable democratic government, and was voted the second-safest country in Central America (after Costa Rica).
The capital, Panama City, is a hip, modern place with impressive skyscrapers, efficient transport, and an active nightlife. You will find modern shopping malls with designer stores; popular chain restaurants as well as fine-dining establishments; and casinos and other entertainment venues. Panama City also has a well-preserved “old town” with elegant colonial buildings. In fact, “Casco Viejo” has been designated a UNESCO World Heritage Site.
Americans will appreciate that Panama has a growing economy that operates in USD. That being said, you can expect your US dollar to go a lot further, because Panama has a relatively low cost of living. Depending on your lifestyle, living in Panama may be half as expensive as staying in the USA. Moreover, Panamanian residents are only taxed on income they generate within Panama. So, if you retire in Panama with only foreign-source income, your tax burden should be minimal.
Healthcare is a concern for most pensioners. Fortunately, Panama has a fantastic private healthcare system (and has even become a hub for medical tourism). It is home to both a Johns Hopkins-affiliated hospital and a Mayo Clinic. You can expect fast, high-quality care, for a fraction of the cost of an American or European hospital.
Finally, Panama has a thriving expat community. With groups such as Expats in Panama, Internations, and Brits in Panama, you will find plenty of opportunities to socialize and make new friends. We certainly recommend learning some Spanish to connect with Panamanian locals, but you can live a perfectly enjoyable life only speaking English.
Panama’s Retirement Visa
Panama’s “Pensionado” visa has been attracting foreign retirees since 1987, and is considered to be one of the best retirement visas in the world. The country offers pensioners an easy path to permanent residency and a plethora of discounts on goods and services.
To qualify for the Panama Pensionado Program, you must meet the retirement age (62 for men and 57 for women). You must have a clean criminal record, and obtain a medical certificate from a Panamanian doctor confirming your health status.
Additionally, you must have a verifiable income of at least $1,000/month for the rest of your life. If you are bringing a spouse or children, you will need an additional $250 per month for each dependent. The money may come from a government pension/social security, a corporate retirement fund, or passive income from investments. The income requirement is reduced to $750 USD if you purchase real estate in Panama worth at least $100,000.
Processing times for the Pensionado visa typically range from two to four months. Often the process goes faster if you hire a local immigration attorney. Depending on government and legal fees, the retiree visa costs $1000-3000.
Once you are granted a retirement visa, you are considered a permanent resident. The visa is good for life, and you can spend as much time in Panama as you wish. Please note, you must be in Panama for at least one day, once a year to maintain your residency.
After five years, you may be eligible for citizenship. During those 5 years, you must have lived in Panama, and only spent “minimal time” outside the country. Spanish proficiency is a must, because all of the naturalization procedures will be conducted in Spanish. You should have a good understanding of Panamanian culture, history, and government. Finally, you will need to show sufficient ties to Panama and demonstrate that you have been a good resident.
Now, let’s talk about the benefits! Retirees are entitled to tax exemptions from import taxes on household goods, as well as a 25% discount on utility bills. Pensioners concerned about healthcare costs will be pleased to learn they can get 15% off dental and eye exams, a 10% discount on medication, a 20% discount on doctor’s bills, and 15% off hospital services (if no insurance applies). If you plan to travel in your retirement years, you can expect 25% off airline tickets, and 30-50% off hotel stays. You can show your Pensionado residency card to get discounts at restaurants, movie theaters, sporting events, and more.
Evidently, Panama is a great place to retire! You can find more information about the Panama Pensionado Program and its benefits on the official embassy website. We can also recommend some reputable Panamanian immigration lawyers if you are interested in pursuing the Pensionado visa in Panama.
We hope you have enjoyed the first article of our retirement series. If you are interested in other residency programs, check out our articles Dominican’s Fast-Track Permanent Residency and Montenegro: Our New European Residency.