Retire in a Foreign Country – Panama

Many baby boomers are intrigued by the possibility of retiring in a foreign country, either full-time or part-time.  I have to admit that I have thought and read quite a bit about it myself.

Some foreign countries have passed laws and created government policies designed to attract American retirees.  Panama is one of those countries.
 As an introduction, here is a video I found that features Panama as a place to retire:


Much has been written about the advantages that Panama offers to U.S. retirees. These are some of the best features in my opinion:

The U.S. dollar is legal tender in Panama, which gives stability to the economy.

New residents who build or purchase a home pay no property taxes for 20 years.

Residents of Panama pay no income taxes on foreign earned income, i.e., you can have a job in the U.S. and not pay income taxes in Panama on that income.

If you qualify as a “pensioner” (meaning that you are over 18 and have a guaranteed income of at least $500/month from Social Security or other government pension), a U.S. retireee receives many discounts ranging from 15% to 50% on medical care, transportation costs, restaurants, and hotels.

Panama also has geographic advantages for U.S. baby boomers who might want to live there.  First, Panama is easy to get to from the U.S., with regular flights from Miami, L.A., Orlando, and Houston.  Second, in Panama you can find very affordable real estate in the city, in mountainous rural areas, on the ocean, and even on an island.

Here is another video about Panama as a place for retirement, produced by International Living:

Panama has a very low cost of living.  Here are some examples of that:

You can build a home similar to one in the U.S. for approximately $40 per square foot.

You can hire a full-time live-in maid for $120 to $160 a month.

A beer at a local drinking hole will cost your 35 cents.  (I love this one, because I cannot even buy a canned beer at a grocery for that!)

A cup of coffee cost 30 cents.  (I wonder if this includes Starbucks?)

A shave and a haircut will cost you $2 or you can spend about $8 for a full beauty salon service.

Utilities are low with water bills averaging $18 per year, land line telephone for 30 a month, Internet  access for $14 a month, and cable TV for $30 a month.

Mrr. GoTo and I have never been to Panama.  After studying these facts and figures and reviewing the videos, I want to visit.

Have any of you visited or lived in Panama?  What were your impressions?


Comments

  1. dave abrams says

    what are the irs implications for social security payments and capital gains on securities? if hold stock in a foreign account are my gains exempt from uS tax?

  2. scott lance says

    First…let me say that I DID retire to a foreign country, and I do like it…and the cost of living is REALLY low…and that is for a very comfortable living….Ie: I currently rent a furnished, 1600 sq. ft condo, upscale area, buy what I want, and do what I want, for under 1500 US a month…(this does not include travel costs )
    However…there are important things to consider…I have learned :
    Dont worry about health care…many countries offer great health care, with great doctors, for very low costs…either pay as you go, or buy a local health plan..( At 55+, my wife and I pay about $175 per month for a very good policy)
    Mostly, you wont need a car…public transportation is cheap and easy
    When you see the COST of shipping your stuff, you will eventually decide to leave most behind…it costs more to ship it than buy new…you will be limited to some clothes and a few mementos..
    You WILL need to learn some of the native language of your chosen county…believe me…you will NOT be able to get by with just english..
    You will experience a new way of life…its great !! But if your personality is defined as “Im set in my ways” you will be in for trouble…You will not “like” everything in your new country…and they will not change it for you !!!
    Make sure your financial house is in order…how will you get money in your new country? Mail? etc. (Many US banks and companies will NOT mail or ship to foreign countries…)
    Whatever you do…RENT first…( rent is cheap) later if you really like it…look around and then buy or build a place…

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