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Panama: The World’s Best Retirement Haven in 2014

Panama City

I’ve lived in Panama for the past eight years and the country has always been a winner in my book. International Living ranked Panama the best retirement destination in the world well before the mainstream press caught on. In fact, it took the number one spot in IL’s Annual Global Retirement Index not once or even twice, but seven times in a row.

This year, it takes the top spot again in the Index as the best place in the world to retire.

Potential expats scouring the globe for retirement destinations tend to set their sights on Panama after they’ve done a bit of comparing. There are other countries that, like Panama, are outside the hurricane belt. Other countries that beckon with swaying palms, sultry tropical weather and a low cost of living.

But Panama beats them all when it comes to overall value. Make a list of pros and cons and the “Panama Pros” will extend far beyond those of other countries.

The number one Panama pro? When it comes to the “Special Benefits for Retirees” category of the Index, Panama has  always ranked at the top with a perfect score of 100. Simply put, no other country in the Index does more for retirees, both local and foreign.

Panama’s Pensionado program has made it easy for Baby Boomers to take advantage of all the country has to offer. The program was developed to give local jubilados (retirees or pensioners) access to wide-ranging discounts, to ease the transition to a fixed or pension income.

Given Panama’s history of welcoming foreigners, it’s no surprise that the law was extended to include them and to provide for their legal residence. (Panama law tends to accord foreigners the same rights as locals.)

Today, retirees with verifiable pension incomes of at least $1,000 a month are welcome to apply. Prove that you have an income with which to support yourself here in Panama—note the local government feels $1,000 a month is adequate—and you will be granted legal residence and access to all the pensionado discounts. These include:

  • 50% off entertainment
  • 30% off bus, ferry, and train fares
  • 25% off airline tickets (domestically sourced, domestic point of origin)
  • 30% to 50% off hotel stays
  • 15% to 25% off at restaurants
  • 10% to 20% off a wide range of medical expenses
  • 50% off closing costs for home loans

In addition, foreign pensionados are entitled to two big benefits:

  • A one-time exemption from duties on the importa­tion of household goods (up to $10,000).
  • A tax exemption every two years when importing or (better yet) buying a car locally.

Enjoy entertainment? A first-run movie in Panama will cost you a whopping $5. But pensionados pay only $2.50. At local drug stores and supermarkets, get a minimum of 10% and a maximum of 25% off medications. You even get 25% off monthly power bills in Panama.

While the pensioner visa (and the healthy discount scheme) is a big enough Panama pro to lure potential expats, there are many other factors contributing to Panama’s high value reputation.

Known as the “Hub of the Americas,” Panama is easy to travel to and from. The growing international airport at Tocumen and the Panama Canal make this location a logistics dream. And this has helped make Panama City the most exciting international metropolis in the region.

Many different nationalities co-exist here…peacefully, I might add. Step into a local Riba Smith supermarket and you will hear English spoken in every aisle (and dozens of other languages). You’ll see temples and synagogues near churches and mosques. You’ll see gourmet Panamanian restaurants alongside eateries offering every ethnic cuisine imaginable…Lebanese, Japanese, down-home American…take your pick.

It’s true that the U.S. has perhaps had a greater influence here than any other nation. The Panamanian Republic was founded in 1903 with major support from the U.S., which was eager to build a canal here. Since then, relations have been more than cordial. You’ll see it in the large English-Spanish bilingual population. And on supermarket shelves stocked with familiar brands. High-end supermarkets will also feature European imports…chocolate, caviar, and more. But even low-end supermarkets carry U.S. brands…Heinz, Dole, Yoplait…they’re all here.

So you shouldn’t find it surprising that Panamanians are accustomed to North Americans and dozens of other nationalities. You won’t find widespread resentment against foreigners here. This is a true melting pot, and Panamanians are much too international for any of that. (Race isn’t a major focus, either…over 70% of the population is Mestizo.)

Panama’s international flavor makes it all too easy to forget that this country is in Central America. This is singularly true in Panama City, where modern highrises spike and twist their way up into a skyline reminiscent of Dubai.

Upscale malls and plazas offer all the latest brands, from affordable clothing at Gap to designer duds by Chanel, Hermes, and more. The Coastal Belt Highway swirls through the International Financial District and into the historic quarter of Casco Viejo. Architects and engineers (among the world’s brightest) are working on everything from a fantastical Frank Gehry design to the Panama Canal expansion mega-project. And work has just completed on Central America’s first-ever metro line. Panama President Ricardo Martinelli tested the light rail project just days ago, and it is slated to open for business this year.

Given how modern Panama City has become, it’s easy to understand why expats are relocating here. But there are many places in Panama that offer the same rock solid infrastructure…and other perks, besides. In addition to the capital, the top five most popular destinations include Coronado, on the Pacific coast, the cool crater town of El Valle, the Highland town of Boquete, and David City, near the Costa Rica border.

Panama’s Top Five Relocation Destinations

Coronado Beach 2Thanks to its active expat community, Coronado is growing into a little hub. New shopping plazas are filled to the top floors with cafés, restaurants, shops, banks, and more. And it’s the only town in the area to have a hospital and upscale supermarkets.

Coronado’s beach features a swirly mix of white sand and glittering black volcanic sand. The long, creamy expanse and the water’s deep, cobalt blue calls to mind the beaches of Nantucket.

About an hour west of Panama City, Coronado is located in a region known as the Arco Seco, or Dry Arc. The name reflects the climate; most days are sunny. Maybe that’s why everyone here spends so much time smiling…the sunshine effect.

Coastal towns like Coronado—and even Panama City—average about 88°F during the day (evening lows can drop to the 70s). But for the many expats who prefer more temperate weather, higher elevations offer just that. These are places where daytime highs and evening lows can be as much as 10 degrees cooler…

In Search of Cooler Climes…

El Valle, about 45 minutes north of Coronado, is one such town. Nestled in the green velvet of the Chame mountains, it’s lined in magenta bougainvillea and blessed with fertile soil. The many outdoor offerings include waterfalls, hiking trails, and hot water springs.

Though tourists do wander through, El Valle remains quiet and unspoiled. It’s home to a small group of expats from around the globe. Though there’s not much nightlife, the community hosts fun activities, from charity work to concerts and classes.

As elsewhere in Panama, modern infrastructure is in place, including high-speed Internet and satellite television. There is no major hospital here (just a small clinic), but the hub town of Coronado is close and can supply most anything not found in El Valle.

Boquete: Popular with Expat Retirees

For even cooler weather, look to Boquete, close to Panama’s border with Costa Rica. The town is a visual gem, a place where A-frame cottages are adorned with potted plants and cheery flowers.

Boquete’s biggest draw is its large expat community. Residents tend to be doers—they like to get involved and give back. They have come together with locals to start a yearly jazz festival, an English-language theater troupe, a weekly market, and more.

As in Coronado and El Valle, the cost of living in Boquete is low. A couple can live here on as little as $1,500 a month, including rent, utilities, transportation, groceries, household goods, and entertainment. Compare that to Panama City, where a couple would want $2,000 to $2,500 a month to live as well.

A Tale of Two Cities…On Opposite Ends of the Isthmus

Expats on a budget often opt for the city of David, just a 30-minute-drive down the mountain from Boquete. The capital of the Chiriqui province, David has several things going for it.

Firstly, proximity to Boquete makes it easy to be a part of the expat community. David’s airport offers quick flights between it and Panama City. And some of the region’s nicest, low-cost homes are along the David to Boquete highway.

An international standard, three-bedroom house that might cost upwards of $250,000 in Boquete can cost 20% less in David or on the “Via Boquete.”

Plus, David offers all the major amenities you’ll find in Panama City, but on a smaller, more manageable scale. There’s no heavy traffic and it takes just a couple days to learn your way around. Despite the heat (with no sea breeze, it feels warmer than Panama City) the convenience is hard to beat.

For me, however, Panama City continues to be the end-all. From here, I have easy access to Panama’s best weekend destinations, be they islands, coastal beaches, or mountains. And the city offers every amenity you’d expect to find in a bustling world capital.

Thanks to the robust economy (one of the fastest growing in the world), mega-projects and multinationals continue to be drawn here. All this has helped give the capital an international flair. And that means it isn’t just convenient…it’s cosmopolitan, cultured, and fun.

There’s so much to do, you can pick and choose…from jazz and film festivals to art and photography exhibits. And there are so many great new restaurants every week, I can’t keep track.

You can really live out loud here. As long as you can deal with everyone else being loud, too. Traffic and honking, hurrying drivers are among the downsides to life in any big city. But if you crave a dynamic and fulfilling lifestyle, you won’t mind.

And you’ll have a front row seat as Panama morphs before your eyes…emerging from the developing world into the developed. If you’re excited by the many opportunities this entails, then it’s time to consider a visit.

Panama wins IL’s Annual Global Retirement Index in 2014. To find out more about the other 23 great retirement havens in the world today, see here.

See here for images of Panama, the world’s best retirement haven.  

Editor’s Note: Learn more about Panama and and other countries in our daily postcard e-letter. Simply enter your e-mail in the box below to subscribe to International Living’s free daily e-letter and we’ll immediately send your free report–The World’s Top 10 Retirement Havens

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