How to Retire in Panama

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Contributor, Benzinga
May 3, 2022

Panama has a lot to offer retirees. It has all the appeal of a tropical getaway with the advantages of metropolitan living. If you want to put Panama in your retirement plan, here are some things we’ll show you to prepare.

Cost to Retire in Panama

Whether you have a tight budget or a large nest egg, Panama is a great retirement destination. You can live comfortably in this country for $1,500 per month. This table shows the average monthly cost of living in Panama.

                    Expenses              Cost per Month
      Rent                      $750
      Utilities                        $75
      Entertainment                        $30
      Healthcare                      $150
      Weekly maid service                        $30
      Internet services/cable                        $75
      Transportation                          $30
      Groceries                      $250
      Dining out 3 times per week                        $50
      Miscellaneous                        $60
      Total                   $1,500

The average person lives about 20 years after the median retirement age of 65; $1,500 per month is equal to $360,000 over 20 years. This is the minimum amount you will need to retire in Panama. The average Social Security benefit is $1,503 per month or $360,720 over 2 decades. This will cover the baseline expenses, but you will need much more to cover emergency and unforeseen costs. This is why you will need to have at least $300,000 to retire in Panama. 

Requirements to Retire in Panama

Upon entry, the Panamanian government does not require U.S. citizens to have a visa. But, you will need to present the following documents:

  • Valid passport (good for 90 days)
  • Tourist card (valid for up to 90 days)
  • Notarized proof of income
  • Certified birth certificate
  • Original FBI police record check

How to Get a Visa in Panama

You must use a local Panamanian attorney to get a Panama Retirement Visa. The government requires you to present an official document verifying your pensioner status. It must confirm you have an income of at least $1,000 per month. If your pension income is lower, you can get a Panama Retirement Visa by purchasing Panama real estate with a value of at least $100,000.

Does Panama Have Retirement Benefits for Foreigners?

The Panama Retirement visa gives retirees several discount benefits. Some of the benefits are:

  • 25% off restaurant meals
  • 50% off entertainment
  • 50% off hotel stays (Monday through Thursday)
  • 25% off foreign and domestic flights
  • 30% off public transportation
  • 25% off utilities
  • 20% off professional and technical services

Perhaps the biggest benefit to retirees is Panama’s affordable healthcare system. The cost of a local insurance plan is about $145. It covers as much as 70% of most healthcare costs. Your Panama Retirement Visa provides discounts on medications and other healthcare services. 

Places to Retire in Panama

Panama is a country of many desirable locales. Most of them have English-speaking residents. Some have more expatriates than others. Here are a few popular areas that may fit your lifestyle.

Panama City

It’s rare that a city makes a list of ideal retirement spots, but Panama City is an exception. It blends a cosmopolitan environment with an old-world charm. This metropolis surprises many with its skyscrapers, hotels, art communities and entertainment venues. The financial district has many of the world’s largest companies and banks. 

On the other hand, Casco Viejo reflects Panama City’s European roots. The cobblestone streets and centuries-old churches hint of the city’s historical depth. Many of the old-world buildings provide space for modern-style cafes, nightclubs and bars. Plus, the city’s affordability makes it a favorite place for expatriates to retire in Panama.

Isla Contadora

If you like island life, you’ll love Isla Contadora. You get the pleasures of tropical living without the fear of residing in hurricane alley. Isla Contadora was once a getaway for the rich and famous. Now, the island is the home of many foreigners and expatriate retirees. The surrounding area of Las Perlas archipelago encompasses 200 islands. So, island hopping is a favorite pastime for the Isla Contadora residents. 


Pedasí is part of the Azuero Peninsula that stretches along Panama’s southern coast. The abundance of yellowfin tuna attracts people who love to fish from all over the world. Also, it is a favorite spot for snorkelers and surfers. There is no shortage of beautiful beaches and wildlife refuges. 

Pedasí is a popular tourist spot. Yet, it has the enduring allure of a sleepy beach town. The blend of good accommodations and a relaxed culture makes Pedasí a great place to retire in Panama. 


Boquete rests in the Highlands of Panama at about 3,900 feet above sea level. The temperature hovers around 65 degrees. Spring-like weather and frequent rain make fertile ground for coffee plantations. Boquete hosts one of the largest foreign retiree communities on earth. Most residents speak English. There are many activities you can enjoy such as horseback riding, hiking and golfing. Also, Boquete hosts the largest annual jazz festival in Panama. 

How to Save for Retirement in Panama

$300,000 may seem like a lot of money to save up to retire in Panama. In fact, it may seem out of reach if you are over 50 or over. Don’t worry. You have about 20 years to save up close to that amount. You can reach your goal by contributing 11% to 18% of your annual income to your 401(k). This table will help show you the percentage you will need to save about $300,000 within a 20-year range.

% of Contribution18%15%12%11%
Annual Salary$40,000/year$50,000$60,000$70,000
Current Age50505050
Age of Retirement70707070
Current 401(k) Balance0000
Annual Rate of Return7%7%7%7%
Total Employee Contribution$144,000*$150,000*$144,000*$154,000*
End 401(k) Balance$306,224$319,000$306,224$327,512

* 401(k) contributions are tax-deferred.

Use a Financial Advisor

One simple way to start getting aggressive with your retirement savings is to use a financial advisor. Financial advisors, or planners, are experts on helping you navigate the complexities of money management. SmartAsset provides a simple free tool to match with a financial advisor in your area.

Do it Yourself with an IRA and Investing

Traditional, simple and SEP individual retirement accounts (IRA) yield similar results as 401(k)s. Ask your employer about the details of your retirement plan. Find out what the annual rate of return is and whether the plan is a 401(k) match. The match plan will double your ending 401(k) balance. 

The estimated annual return on stock investments over the long term is around 8%. Mutual funds can also yield a long-term average of 8%, although no level of return is guaranteed in the stock market. Read about how to compare online brokers.  Securities investing can be especially risky for a novice. Get as much knowledge about investing as you can. Read about the best investments for retirees and the best retirement books. Keep in mind that gains from stock investments are subject to capital gains tax. 

Saving $600 to $700 per month can put a strain on your finances. Take advantage of overtime opportunities at work. Consider working a part-time job. If you work for 20 hours per week on a $15-per-hour gig, you can earn $1,200 per month before taxes. According to American Express, a family of 4 spends an average of $4,000 on a vacation. Consider saving about 70% on vacations by planning staycations. Try liquidating possessions you no longer use. Also, apply your annual Christmas bonuses to the funds you need to retire to Panama.

Your saving efforts can benefit from good budgeting. To identify waste, itemize your spending. Put limits on your entertainment and miscellaneous spending. Try to use credit cards sparingly. The interest payments can become a major drain on your finances. It pays to take the time to find ways to save on your ongoing expenses. These include insurance, auto maintenance, gas, utilities and water.