The fourth country on my list to research for retiring abroad is Panama, nestled between the Pacific Ocean and the Caribbean Sea, and known for its famous canal.

As I mentioned in my previous article, I will focus on six criteria which, after thorough investigation, should provide a reasonable indication of whether the proposed location will genuinely satisfy my retirement requirements.

Although the official currency in Panama is the Panamanian balboa, it is pegged 1:1 with the US dollar; therefore, both currencies are widely used throughout the country. One thing to note is that the Panamanian balboa is primarily used for coins, while US dollar is the standard for paper money.

1, Cost of living and financial sustainability

Daily expenses (groceries, utilities)

• Utilities: (electricity, heating/AC, water, gas, internet) for a one- to two-bedroom apartment, average $120 to $250/month

• Grocery bills: for one person, typically $250 to $400/month. Local markets are far more affordable for fresh produce.

Common grocery prices

— Bread ($2.16)

— Milk ($1.70/litre)

— Chicken breasts ($7 to $11/kg)

— Apples ($3.85/kg)

— Eggs ($2 to $3.50/12)

Housing costs (renting or buying)

Rents and property prices in Panama differ by location. There is no single set retiree hub, but retirees typically favour one of three areas: Panama City, Boquete for a cool mountain climate, or Coronado for beach life.

• Average monthly rent (furnished, 2025):

— One-bedroom apartment (50 sqm), $1,000 to $1,800

— Two-bedroom apartment (80 sqm), $1,500 to $2,800

• Average purchase price (2025):

— Studio (20 to 30 sqm), $180,000 to $300,000

— Two-bedroom apartment (80 sqm), $450,000 to $700,000

Property taxes

• Primary residence exemption: if you declare a property as your primary home, you pay $0 property tax on the first $120,000 of its government-assessed value.

• Standard tax rates for non-primary residences: for properties that are not your primary residence (eg, second homes, investment properties, vacant land), a low progressive tax rate applies.

• Property transfer tax: when you buy a property, you pay a one-time transfer tax of 2 per cent on the higher of the fiscal value or the sales price.

Tax environment for residents

Game changer alert: the core of Panama’s tax law is that income is only taxable if it is sourced within the country's borders. Foreign-sourced pensions, social insurance, and investment income are not taxed by Panama.

2, Healthcare quality, accessibility and affordability

Panama provides retirees with reliable, accessible, and affordable healthcare and is a popular destination for expatriate retirees seeking high-quality medical options.

It has modern hospitals and medical centres, many affiliated with US and European institutions.

Private health insurance is the norm for expatriates and retirees, with comprehensive plans costing between $250 and $300 per month.

There are minimal wait times for doctors, an easy referral process to specialists, and medications are significantly lower priced than in the US.

Long-term care options are very limited; most opt for in-home caregiving or private nursing facilities, which cost between $500 and $2,500 per month depending on the level of care required.

3, Climate, environment and general liveability

Climate

Panama features a tropical climate with two primary seasons: a dry season from December to April and a rainy season from May to November. Coastal areas (eg, Panama City, Coronado) average 24C to 32C, while mountain towns like Boquete and El Valle de Antón provide cooler, springlike temperatures.

Cleanliness of air and water

Air quality is generally good outside urban areas. Drinking water is bottled, and tap water is used for general daily use. One thing to note is that Panama does experience periods of water restrictions due to drought conditions.

Safety and crime levels

Panama is generally safe for retirees who choose the right residential areas and adhere to common-sense precautions.

Gender equality

Gender equality in Panama is interesting; based on research, gender inequality is more prevalent within the local Panamanian family culture than it is for expatriate retirees.

Overall pace of life

Panama offers a relaxed, community-focused lifestyle, particularly in its smaller towns and mountainous areas. This culture, which values personal relationships and savouring daily life, is especially appealing to retirees seeking a slower pace.

4, Visa and legal residency requirements

Retirement visa

Panama’s “Pensionado Visa” is the most well-known retirement visa, providing immediate permanent residency status upon approval. Once granted, you receive permanent residence, which only requires you to visit the country at least once every two years to maintain it.

You must meet the following financial requirements:

• Proof of a guaranteed lifetime pension of at least $1,000 per month from a government, private pension fund, or insurance company

• If you purchase real estate in Panama valued at $100,000 or more, the pension requirement drops to $750 per month

Pathway to citizenship

After five years of permanent residency, you can apply for Panamanian citizenship. There is a mandatory civic interview conducted entirely in Spanish, so fluency in the language will be crucial.

Property ownership

Foreigners, including retirees on the Pensionado Visa, can legally own property in Panama with the same rights as Panamanian citizens, except in certain restricted border and island zones.

Estate laws (very important)

Panama follows civil law regarding inheritance: if you pass away as a resident, local inheritance law (forced heirship) may apply to assets located in Panama, even if your will is from another country. Panamanian law reserves a portion of your estate for children and, in some cases, a spouse or parents.

5, Infrastructure, amenities and ease of integration

Transportation — public and private

Panama City has a modern, clean, and efficient metro system operating two lines with reliable schedules, covering key commercial and residential hubs. Outside Panama City, public transport options are more limited, so retirees often need a vehicle.

Private cars or Uber seem to be the most popular choice for retirees and expatriates in Panama, and the country has a good selection of both new and used vehicles.

Brand new vehicles

— Compact: Suzuki Swift, Toyota Yaris, $18,000 to $25,000

— Mid-range: Hondo Civic, Toyota Corolla, $25,000 to $35,000

— SUV: Hyundai Tucson, Toyota RAV4, $35,000 to $55,000

Annual cost of car ownership

— Insurance: $1,200 to $1,400

— Road tax: $250-plus

— Tolls: $100-plus

— Fuel: $1,000 to $2,500

— Service and maintenance: $200 to $600

— Parking (resident’s parking permit): $150

• One thing to note: police shakedowns can occur in Panama.

Amenities

• Supermarkets: grocery shopping is convenient, with 24-hour supermarkets and branches offering a wide range of local/imported products in most expatriate-popular neighbourhoods.

• Cinemas and malls: in the main hubs in Panama, along with high-traffic expatriate areas, there are several large shopping malls, such as Multiplaza and the famous AltaPlaza Mall (featuring IMax and 4DX cinemas, go-kart tracks, and bowling).

• Social clubs: social clubs are common in Panama and are a main way to meet fellow retirees. Most revolve around book clubs, art, cooking, fitness, and travel. Many retirees join local community centres, which regularly host social events, trivia nights, and workshops.

• Banking: Panama is still very much a cash society, with credit and debit cards used more in a traditional banking sense. The banking system is expatriate-friendly, with local banks such as Banco General offering accounts for foreigners. Additionally, there are quite a number of international banks that can be used by foreigners.

• Local culture open to foreigners: Panama is widely recognised for its open, inclusive, and helpful local culture, especially in well-developed expatriate areas.

6, Proximity to family, friends, and travel links

Relocating abroad often means starting with a small social circle, which can be isolating, especially for first-time movers. Since connections are often made through work, retirees must actively “retrain” their approach and make a conscious effort to build a new social network.

Air travel

The main airport for Panama is Tocumen International Airport, considered a major gateway between the Americas. Panama is served by major carriers from North and South America; however, there are no direct flights to Europe, Australasia, or Africa.

7, Conclusion

A successful retirement in Panama is ideally suited for a retiree who prioritises financial comfort and an active, diverse lifestyle over the high costs of their home country.

This person appreciates access to modern amenities and quality healthcare but is equally drawn to adventure, whether found on mountain trails or by the sea.

However, it is poorly suited for those who need a cool, dry climate or who lack the flexibility to adapt to a more relaxed pace of life.

For a couple to live very comfortably in Panama in 2025 while renting, a minimum annual income of $42,000 is a prudent benchmark.

References

Peddicord, K. (2024). Forbes — Available from: https://www.forbes.com/sites/kathleenpeddicord/2024/11/22/guide-to-retiring-in-panama/

International Citizen Insurance (2025). Available from: https://www.internationalinsurance.com/countries/panama/health-insurance/?srsltid=AfmBOoqNepARBOh88E8OXtYgcc7D9p1IMx1DtrVvTOnLWODchI6ndZy0

Coacci, J. (2025). Fortune. Available from: https://fortune.com/2025/11/15/retirement-living-costs-panama-living-costs-housing-americans-affordablility-abroad-expats/

Doyle. L (2025). International Living. Available from: https://internationalliving.com/countries/panama/cost-of-living-in-panama/

Thompson, M. (2025). WTW. Available from: https://www.wtwco.com/en-au/insights/2025/05/panama-sweeping-state-pension-reforms

Unbiased (2024) Unbiased. Available from: https://www.unbiased.com/discover/retirement/retiring-in-panama-a-complete-guide

• Carla Seely has 25 years of experience in international financial services, wealth management, and insurance. She holds an MSc in Business and Management and multiple professional designations, including ACSI, QAFP, and AINS, along with several investment licences

• For further inquiries or suggested topics, e-mail justaskcarla@outlook.com