Liz Larroquette
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How Much Does It Really Take To Live In Panama?

I routinely get asked just how much it actually costs to live in Panama. Can we live on $1,700 a month? What about $7,000? The question is so broad you really can’t answer it appropriately without asking a lot of questions. Many retirees wonder about having a great life on Social Security alone and others simply want to know how to compare Panama with other highly rated retirement hot spots.

City, Beach or Country

Where you choose to live dictates a lot about how much you will need to live well. There are plenty of small towns, both on the beach and in the interior of Panama that offer a much lower cost-of-living than you’d find in Panama City or even the beach communities of Coronado and Nueva Gorgona. David is one of the larger cities in the country and while it has many comforts sought by expats such as western style groceries and good restaurants, it does not offer the same upscale amenities found in areas with higher expats populations.

Golf Course Couple Sunset

If your ideal day involves a round of golf, remember to factor that into your relocation budget!

Most of my clients are looking for certain creature comforts in retirement so I always begin the discussion by encouraging them to imagine what a really good day in retirement might look like.This is the key to knowing how much will be needed.

If their ideal day involves playing a round of golf, grabbing a beer with friends after 18-holes and routinely eating out in nice restaurants, I know they’ll need more than someone living in the interior of the country who is happy reading a good book.

If they want to celebrate special occasions in a Michelin-Starred restaurant, they can, it’s just going to cost more. If it’s live-in help, 24-hour security and routine travel, the budget will expand. The nice thing is there are all kinds of options in Panama.

You should be as aware as possible about the things under your control which will increase or decrease your cost of living. Everything from where and what you elect to live in, both in terms of areas and types of residences, as well as things such as how much air conditioning you’ll use, your affinity for television and where you’ll buy groceries will be part of the mix.

Spread Your Wings

Render Tocumen Airport

The expansion of Tocumen Airport will make international travel to and from Panama even easier

One thing most people don’t consider is the tremendous opportunities for travel. The airport in Panama City, Tocumen International Airport, is a hub for Copa Airlines and there are direct flights to cities such as Amsterdam, Paris, New York, Lima and Rio de Janeiro.

That makes global travel easy, but, I find it’s the smaller trips that most intrigue expats and consequently increases the budget.

It’s not outrageously expensive to take trips for a day, a long weekend or even a couple of weeks, but you’ll need to budget. Places such as Monkey Island where you’ll experience the pristine rainforest or a day trip to watch whales near the Pearl Islands. There are also many opportunities for trips, both for a day or up to a few weeks, where you can enjoy all the beach life Panama has to offer. Of course, being so near South America, it is very tempting to want to catch an inexpensive flight to say Quito or Guayaquil in Ecuador to take in some of the beautiful turtles on the Galapagos Islands. There are always groups of expats organizing trips.

Rent or Buy?

Playa Bonita Residences and Pearl Club

Rentals are available, but consider 'rent to buy' developer finance in buildings like beautiful Casa Bonita

The living accommodations you select will probably be the biggest variable. I find many expats are better off financially if they are able to purchase their home outright and know that expense is already covered. Rent can run from $300 to several thousand a month, but I suggest budgeting about $850 to $1300. Remember, that is just an average. I hesitate to toss out numbers because you can find just about anything in Panama, especially if you establish local connections. Rentals come in many forms including sub-lets known only through word-of-mouth.

Many expats, fully committed to unplugging from their native country, will sell everything and move to Panama with little more than a few photos and a couple of suitcases. No house. No furniture. No vehicle. Consequently getting set up is pretty intense the first few months, but it’s often a wise decision to take the money from selling your existing home and possessions and reinvesting it in a piece of Panamanian property you’ll use as your residence. Without having to budget for a mortgage or rent greatly reduces your monthly expenses.

Living Light

The other day I visited a woman who had been transferred to Panama City for her job. A small, attractive woman in her 30s, she had rented a lovely two bedroom condominium in trendy Costa del Este. After she was settled, I stopped in to see how things were going and was amazed at how little she had in terms of material things.

living room Parkside Empresas Bern Costa Del Este

A sleek new apartment, like this one in the beautiful Parkside building in Costa del Este, could be an excuse to de-clutter!

“Oh, I employ the Marie Kondo method of decluttering” she said with a smile. I actually felt lighter just walking into the large living area with sweeping views of both city and water. She could immediately tell I wasn’t aware of any decluttering methods. With two children, I mostly hope not to fall over the dropped backpacks when I enter my own residential space.

“You should read her book, “The Life-Changing Magic Of Tidying Up: The Japanese Art Of Decluttering & Organizing”, she continued. “Get rid of anything that doesn’t bring you joy and put everything in it’s place, out-of-the-way, accessible but not out and cluttering your life.”

She explained how she simply jettisoned all her clothes and most of her possessions prior to taking her Panama assignment. “I had always been pretty neat,” she began, “but, when I knew I was moving, I went to my closet and soon I had about 12 bags of clothes I should have given away years ago. We hang on to stuff. If it doesn’t bring you joy, let it go to someone else,” she advised. “People just drag around stuff. It’s heavy.”

Re-Think Your Needs

After I left from a lovely afternoon of green tea and a calming atmosphere, I realized how she was living, was exactly what I would suggest for most people trying to figure out how much they will need once they move to Panama.

Shipping Container Household Goods

Could you fit your life in a 40 foot container?

Decide what brings you joy and make sure you have enough income to cover the cost of those things. You’ll probably need less than you imagine.

I’ve seen couples fill 40-foot containers with everything from a vehicle to golf clubs and numerous boxes of old cook books. I couldn’t help but consider how many paper and print cook books one might actually need given you can find just about anything on the internet.

I have also watched many expats who love to peruse the outlet shopping in Panama. “I got these Timberland boots for $10” a woman told me other day after a trip to Westland Mall located about 30 minutes from Panama City. “They are usually about $160,” she continued, exhibiting her new find while clutching plastic bags full of recent purchases. Maybe she was buying for poor people in her native Alabama, but I couldn’t help but think about how much joy she would receive if these boots eventually ended up pushed to back of her Panamanian closet.

The Cost of Health

Other things to consider is insurance. It’s simply different in Panama. If you are from the United States and over 65-years-of-age, you automatically get Medicare which covers about 80% of everything healthcare-related. Part A, the initial coverage, is provided to every US citizen at no cost. Eighty percent seems like it’s covering a lot, but when you consider a recent trip to an emergency room in the United States for a blood clot scare, ran approximately $11,200, you’d be left with a bill of $2,240.

You can buy health insurance very inexpensively in Panama and even if you wing it with no insurance, it simply costs about 10% of what you’d pay in the States. Canada is a little different, but it’s easy to come out ahead when everything from pharmaceuticals to back surgery is charged at a much lower rate.

Getting Around

Panama Metro System

The Panama Metro System is just one way to get around Panama

You’ll probably want to purchase a vehicle unless you live in Panama City and are adept at the our very good public transportation system. The subway is rapidly developing and the buses fill just about every need.

Taxis are inexpensive and you can even book an Uber helicopter if you really want an experience. But if you go the vehicle route don’t imagine the insurance being anything close to what it would cost you in the States or even Canada. I know a couple who pays around $132 annually which covers their Toyota Sequoia.

There are relatively few new cars in Panama. Most people drive four-wheel drives and they often-times buy used. Figure the cost to be about the same as in the United States, but know it will cost less to operate. Gasoline is less expensive and repairs are significantly less. I urge you to bide your time if buying a car and see if you can pick one up inexpensively from an expat who might be moving.

Controlling Costs

El Valle Organic Markets Panama

Buying your fruit and veg from local markets can take a big chunk out of your grocery bill

I love snagging a couple of filets of corvina sea bass that have just been pulled out of the ocean and pairing that with some fresh veggies sold along the highway. It’s an easy healthy dinner, but for every bit of corvina I get for $3 a pound, I indulge more on imported items which are easy to fix and found in the upscale groceries aimed at the expat market. Frozen ravioli and granola bars for example.

If I concentrated, I could eat very well for much less than what the average household spends in the US and Canada.

Another way to watch your spending is signing up for internet and television. If you don’t speak Spanish and you obviously look like an expat, I would suggest handing over a little bit of money to a local and let them work their magic. You should realize about a 50% reduction in your monthly bill. It’s just a fact. Everything isn’t fair in Panama or anywhere else.

The Whole Picture

Panama is generally less expensive than most urban areas of North America, but it’s not as inexpensive as some internet articles suggest. I tell my clients to make a list of what you think you’ll be doing on a daily basis. Consider everything from your mobile phone to how many times you’ll want to return home to visit the grandchildren. Cover your residence if possible and make friends with the locals as well as the expats. You can manage on $1,700 and you can certainly manage on $7,000. What are you spending today?

It’s easier than you think to figure it out and I’m always happy to help.

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About the Author Liz Larroquette

Whether you are looking to retire in Panama, relocate your family, or buy property as an investment Liz is a wealth of knowledge you can and should tap into.

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