The Future of Panama Retirement

I suppose you’ve been wondering what I’ve been up to lately, enjoying my Panama retirement and reading the news of the long cold winter north of here (feeling just a little of that "schadenfreude" - just a little), specifically in North America and the global economic crisis. I’m sipping my coffee, a coffee grown in Panama, on the slopes of Volcan Baru. It’s organic coffee here. They don’t use chemical pesticides for the coffee, all the weeding is done by hand. It’s a delicious, smooth coffee with a slightly nutty flavour. Mornings in Panama.

If you’re wondering about the effects of the global financial crisis in Panama, the country is actually not doing badly. I’ve been reading that the government expects economic growth and a budget surplus this year. Not like everywhere else. During the last five years in Panama, the economic growth in Panama has been positive. This prospering in Panama was assisted by the booming Panama real estate market, the profits of the Panama Canal, tourism and the booming banking business here in Panama City. However, it is expected there will be a drop in tourism to Panama as tourists cut back on their vacation spending.

The unemployment rate might be soaring in other countries such as the United States, but here in Panama, the unemployment rate was 6.5% last year. In 2004, the unemployment rate sat at 14%. So things look relatively good for Panama. The government here is experiencing a surplus for the third year consecutively – not like the other governments of other countries around the globe. I’ve been reading about this in the newspapers.

However, obviously, Panama real estate is experiencing a slump. Panama real estate was fuelled by North American and European buyers, but lately, they are not coming to Panama to purchase property because of their own declining economies. As a result, prices of real estate properties in Panama is declining. As recently as a year and a half ago, people were buying properties in Panama for $200,000 and then selling them six to 12 months later for double the price. There is now a bounty of high priced condominiums which can’t be sold because the numbers of buyers looking for Panama property is just not there currently.

There has been a decline in the number of ships passing through the Panama Canal. The Panamanian government collects tolls from the shipping that pass through. But because of the world wide recession, there are less cargo ships these days travelling through the Canal. In the meantime, Panama has been expanding the Panama Canal locks to allow larger ships to pass through. This mega project has created thousands of new jobs for Panamanians and is an investment in the future of Panama.

Another good fact is that since end of the Noriega regime in 1989, Panama has experienced peace. Peace and stability are great forces when it comes to a country prospering economically. I’ve got no time for dictators. That’s why I chose to retire in Panama.

There are still people who are suffering economically though, selling fruit on the roadside or stealing scrap metal to resell because economic prosperity has not trickled down to enough to the people who need it. Like many parts of the rest of the world, wealth sometimes remains concentrated in a few hands. The cost of food is going up as well, but this is an international problem.

Problem for all the baby boomers who had hoped to cash in their retirement funds and sell their houses is that most of their retirement funds were invested in the stock market and they lost a lot of their cash. Also, selling houses in North America is not worth it right now because you couldn’t get the price you want for your house. Most of the baby boomers have decided to put off their decision to pack up and leave and buy a house or condo in Panama till they get a better return on their investments. Getting a loan from the bank is almost out of the question.

Looks like a lot of people are waiting for the recovery.

I’m glad I decided to retire to Panama when I did. I’ve been here a few years now, speaking Spanish like a native, living in an apartment in Panama City. I’ve looked around for some Panama properties to purchase, but I’m holding out till I find the perfect spot. I want a house on the beach for my retirement in Panama and with the prices declining for Panama properties because of the lack of buyers, I’m ready.

Retirement in Panama – a Viable Option

For many people, where to retire is an issue. I’m suggesting a retirement in Panama for you to consider because I’m here and assured I have made the correct decision with my life and retirement plans. Most of use would like to retire in sunny Florida or California. However, both these places have become to be very expensive, housing has gone up exorbitantly in cost and the daily cost of living is continuing to increase. Also, Florida is congested with too many tourists, too many retirees and also has many hurricanes- which is okay but one has to have expensive home insurance.

One of the newest places to retire is Panama Central America. If there is paradise, then it has to be this country. With two oceans on either side of the country, this peaceful haven is a much sought after destination for many Americans and Europeans. The country has a heavy Spanish/American influence but has all the amenities of the North America lifestyle. The country is blessed with year around warm weather, a lush countryside, minimal crime and wonderful scenery. Some call Panama City the Paris of South America, others call it “the second Miami”.

For North Americans, there is no difficulty in getting a visa for retirement. The country, in fact, encourages people to buy Panama property and to retire in Panama. Property is much cheaper than most North American real estate. For a first time visitor, buying property is not the first thing to do. One must go and get to know the place first. There are ample real estate agents in Panama City. The laws of buying Panama real estate are similar to North America and there are safe guards to prevent fraud. However, it is wise to conduct all real estate dealings with the help of a Panamanian lawyer. It also helps if you speak a bit of Spanish which isn’t difficult to learn. Any foreigner who purchases a home which is worth more than $200,000 is entitled to a residency visa.

Since the country is situated on the Panama Canal, it has some of the best banking facilities in all of America. There are, at last count, 85 international banks located in Panama City. Money transfers, withdrawals, ATM machine and credits cards are widely used.

Moving to Panama is not a big deal; most airlines fly to Panama City from major cities in North America. For those thinking about retirement in Panama, there are no taxes on household goods up to $ 10,000. Even a car can be shipped. Shopping is very similar to North America and the prices are the lowest because of the lowest tariff rates in all of the Americas. This is because of the free trade zone and the Panama Canal. However, Panama does not have as many furniture stores and not many sales or discount stores. Because some parts of the countryside still have power outages, it is best to buy American products which can withstand the abuse of these power surges.

Living in Panama is easy. Grocery shopping is even better than North America, hey, it’s cheaper! Panama grows a wide variety of tropical fruits, vegetables, locally grown coffee and most North American foods are readily available at a lower cost. One of the other great benefits of retiring in Panama is that the cost of a maid is less than $200 a month.

The country has a solid infrastructure and both transportation and communication are first rate. High speed internet is easily available in the country.

For the retiree, the Panamanian government has created lots of perks, making retirement in Panama simpler, irrespective of citizenship. One is entitled to many discounts on loans, airline tickets, hotel accommodation, dental and prescription medications, health care services, monthly energy and phone bills and so on.

Currently there are thousands of North Americans who have made the choice to retire in Panama and they love it. It’s been a warm day, I read some online news about how cold it’ been in Canada and the northeastern United States. It’s been a warm day here, a little on the warm side. I see the beach, serene, always there, with those lush palm trees. The sky is a gorgeous blend of pinks, purples, and blues. It’s early evening, now, and I’m watching the sun set from the verandah, laptop on my table, updating my blog with this article, really, really enjoying my Panama retirement. You couldn’t pay me to miss the snow.