If you like perpetual summer, you will love Panama.
The country connecting the North and South American continents is tropical and it stays warm year-round.
It may be too warm and humid for some tastes, however.
There is a lot to like about Panama, and it is becoming a more popular country with Americans looking to live or retire to another country.
The capital, Panama City, is a large city at 500,000, and there are a lot of rural areas if you prefer not to live in the city.
Contents
Pros of Living in Panama
1. The weather, if you like summer
The temperature very rarely drops below 75 or above 92.
There is a lot of rain at certain times of the year, but the temperature will be constant.
There are no seasons.
It can get very humid and that is a bigger complaint than the heat.
There are also 12 hours of sun and 12 hours of dark every day, and this never changes either.
In the rainy season, the rain comes at about the same time every day.
2. Low cost of living
The cost of living is much lower than it is in medium to large cities in the United States or Europe.
You can rent a condo near the beach for 1200 a month and less than that if you live inland.
Things like utilities, food, going out to eat, and so forth, are also significantly less expensive than what you might be used to in America.
You can buy fresh fruit and vegetables very cheap at outdoor markets.
Imported items are more expensive, however.
In the countryside, you could live well on $1500 a month, and between $2,000 and $3000 a month in the best area of Panama City.
3. Public transportation
Especially in Panama City, public transportation is cheap, reliable, and easy to use.
It is called the Metro, and there are buses going all over the city 24 hours a day.
There are also buses to take you out of the city and to other towns.
The bus lines are separate from the Metro, but they take you everywhere.
Most tickets are 35 cents.
Roads are modern and good throughout the country.
4. The food
Panama City has a tremendous number of restaurants with every kind of food you can imagine.
Panamanian food has a lot in common with other Central American countries, but it has some flair of its own.
It is a combination of Hispanic, African, Indigenous, and Antillian cultures. Panamanian Rice and Beans are different because of the spices it uses, and the addition of pork.
In the countryside, you will find more traditional Panama cuisine.
5. People are friendly
Panama has a well-deserved reputation for having friendly and welcoming people both in Panama City and in the countryside.
There is a lot of hospitality and foreigners quickly feel at home once moving there.
People are generally helpful too, but you will have to learn Spanish to get much interaction.
Outside Panama City and tourist areas, you may find everyone speaking Spanish.
6. Retirement benefits
Panama offers retirement benefits for citizens and for people from other countries.
If you are getting pension benefits in another country, you get all the benefits that retirees get.
This includes tax breaks on household goods and on automobiles.
You get 50 percent off hotels and entertainment.
There are also 25-30 percent discounts on public transportation, medicine, restaurants, as well as professional services.
7. Good inexpensive healthcare
There are several options for healthcare in Panama, and the quality of care is as good as anywhere in Latin America.
There is a free service available that has long waiting times.
You can get private insurance at private facilities at a low cost and get faster service.
You can also self-insure, meaning you pay for small things yourself.
A doctor’s office visit, for example, is $12.
You will need to shop around and discover all the best options before choosing the best one for you.
8. Political and economic stability
Regardless of where you live in the country, there is safe water, good internet, reliable power, and good healthcare.
Panama has had the strongest economy in Latin America for the last several years.
There is no right vs. left division, as the parties tend to be more business-like or business-related.
It is a relaxed atmosphere and they choose a president to serve a five-year term.
Cons of Living in Panama
1. The weather
The weather is perhaps the best and the worst thing about Panama at the same time.
What is not to like about tropical summer conditions year-round?
The rain for one thing.
When it rains it rains hard for a long time.
In the rainy season, it may rain hard for two hours nonstop, but then the sky will clear.
It may never get above the low 90s, but the humidity is very high all the time, making it feel hotter than it is.
2. Crumbling infrastructure
Power outages and water outages are common.
They usually only last a few hours, but it is still inconvenient.
Most people buy a backup water tank and have a backup supply of electricity like a generator.
Power outages are more common in rural areas, but they still happen a lot.
Many sidewalks and streets in Panama City have potholes and cracks, and they are not level.
Also, pedestrians do not have the right of way.
3. Everything is slow
Fast-paced Americans will have to adjust to the slower pace of life in Panama, which is common for Latin America in general.
You may have to wait half an hour in line at the bank or the post office.
You may wait even longer if you are dealing with the government.
If you get angry or complain, your wait will get even longer.
Panama people take it in stride and do not seem to mind the slower approach.
This is something that will not change though, and you will have to adjust or be upset all the time.
4. The language barrier
Unlike many Latin American countries, most people in Panama do not speak English.
They speak Spanish like the rest of Latin America.
You might be able to get away with not knowing Spanish in tourist areas of Panama City, but not if you are out in the country.
Dealing with the government at all will require you to know some Spanish.
5. Noise
Panama people love parties and socializing.
Parties often start around 9 p.m. and go well beyond midnight.
Walls are thin at times, and you may not get any quiet until the wee hours of the morning.
But in Panama, you can probably join the group, party, and have a good time.
Work is not the top priority, and they want to be able to have a good time.
This can be a lot of fun, or it can be stressful.
6. The Manana principle
Manana is Spanish for tomorrow.
If someone is talking about something getting done tomorrow, it does not necessarily mean the day after the current day.
It only means, not today.
It is part of the slower, more laid-back lifestyle.
They do not get too stressed or upset about things.
Things get done when they get done.
Life has to happen first in Panama.
People and relationships take a priority over jobs.
7. Cash society
It is just an inconvenience, and may not really be a con.
Almost every transaction is paid for in cash.
No one takes checks, and only a few will take credit cards.
This could also mean you have to go somewhere to pay your utility bills in cash, though there is some modernization as far as this type of bill goes.
You do have to remember to carry cash though because you will not be able to buy much without it.
It is a good thing the crime rate is low.
8. Traffic issues
In Panama City, rush hour can be a nightmare.
If you do not have to, do not drive then.
Most roads are well marked, but there are some street signs missing in Panama City.
The roads in the mountains can be scary.
People make use of both lanes when driving around sharp curves, which can cause an accident.
Drunk driving is prohibited and they are serious about this.
You will get in a lot of trouble.
Pros and Cons of Living in Panama – Summary Table
| Pros of Living in Panama | Cons of Living in Panama |
|---|---|
| 1. The weather, if you like summer | 1. The weather |
| 2. Low cost of living | 2. Crumbling infrastructure |
| 3. Public transportation | 3. Everything is slow |
| 4. The food | 4. The language barrier |
| 5. People are friendly | 5. Noise |
| 6. Retirement benefits | 6. The Manana principle |
| 7. Good inexpensive healthcare | 7. Cash society |
| 8. Political and economic stability | 8. Traffic issues |
Panama Safety Overview
READ THE FULL REPORT: Panama Safety Review
Safety Index:
- OVERALL RISK: MEDIUM
- TRANSPORT & TAXIS RISK: MEDIUM
- PICKPOCKETS RISK: HIGH
- NATURAL DISASTERS RISK: MEDIUM
- MUGGING RISK: MEDIUM
- TERRORISM RISK: LOW
- SCAMS RISK: MEDIUM
- WOMEN TRAVELERS RISK: LOW
Frequently Asked Questions
What is the Darien Gap?
The Pan American Highway stops suddenly in the Panama town of Vaviza.
There is a 66-mile gap from there into the next town in Columbia.
There are rugged mountains and marshland in between.
It would be very expensive and environmentally dangerous to build a road through that area.
There have been attempts but environmental concerns have stopped it so far.
Does the U.S. Still own the Panama Canal?
No.
The United States turned over control of the canal to the nation of Panama on Dec. 31, 1999.
It is operated by Panama officials today.
In 1979 the U.S. gave control of the canal to Panama and gave it up completely later.
What is a retirement visa?
This is a special visa for retired people.
If you are retired, you can move to Panama and enjoy all of the benefits retirees there receive.
This keeps it ranked high in the best places to retire.
Income requirements are lowered and once you have it you do not have to renew it.
There are huge discounts on entertainment, public transportation, airplane flights, restaurants, and many other things.
What is the currency of Panama?
The official government currency is called the Balboa, but the U.S. Dollar is recognized as legal tender.
The dollar is used more in regular commerce than the Balboa and Panama no longer print its own money.
They have the same value.
An American does not need to exchange currency since the dollar is accepted.
What does the territorial tax system mean?
Panama is one of a few countries that have a pure territorial tax, which means they only tax money that was made in the country for income tax purposes.
If you live in Panama and make your money online, or from somewhere else, the country will not tax that income.
The United States uses a residency-based system, meaning you pay taxes for where you live regardless of where it came from.
If you gave up your United States residency status and made all your money online, you would essentially not have to pay any income tax.
Super helpful information!
Beware: I have lived I Panama for 4 years and I can not think of one positive thing to say about Panama. I have read all of the cons and take them times 100 and you will get the truth. Well you are wondering why I stay for 4 years. I am caught in their trap. I feel and broke my back. I will leave at the first moment that I can. I have lived all over the world. If you want a cheaper place to live, try any of the Virgin Islands. When you arrive in Panama, Panamanians will all tell you they love Americans. Do not believe them. You are a Gringo, they hate Americans and you have no rights. All they want is your money and they know how to get it. If you ignore this message, I promise you that you will regret it. Please kisses to my heart felt advice.
Negative
As far as USA tax, ALL American citizens are required to file income tax. Period. No matter where you live. Income tax in the USA is based on citizenship, NOT residency. Just giving up your residency status will not be enough. You have to give up your US citizenship. Depending on your situation, you may not have to pay any tax, but you still must file.
Taxes are not based on citizenship here in usa…working immigrants, visa holders, etc all pay income tax to the feds and perhaps the state they are in. Taxes to usa while usa citizen in other countries only applies to citizens
A US citizen (by definition) has resident status (meaning that they have the right to reside in the US). For a citizen to give up residency status they have to give up citizenship; for a resident to give up status they must give up their green card or whatever special privilege of residency status they have.
Panama is a great country dont get me wrong. However some of these people here are criminals anf the government dont do nothing about it.. i gave bren robbbed on luktiple occation and bring it to the court and police and they still dont want to do anything. Its like criminals have more rights than victims. Thats totally onfair… they also work here very slow everything they do. Am just very dissapointed in there government for not having protection for people.
Being retired and from the Netherlands, I live most of the time in Panama from the beginning of December to half April. Most of the days are very nice and pleasant because the temperature is not too high and most of the time there is a cool breeze. What I hate most in Panama is the traffic because on the roads you see old trucks and buses. They make a lot of noise and throw out a thick black smoke, in civilized countries it would be forbidden to drive in this kind of old-fashioned trucks and buses. Every year I hope that the government is doing something against it, making new regulations to get a modern traffic, but they’re doing nothing, the bad traffic continues,
maybe forever. Especially the big trucks are very noisy, and you hear them almost 24 hours a day. It seems that the government in Panama never heard about the warming up of the earth and that they are not interested in taking care for a more healthy air like we do in the Netherlands. In the hospitals you see many sick people.
Why do you go to Panama? What do you like – dislike about Neatherland?
You comment that they do nothing for healthy air but, yet I have read that Panama is one of three countries that is carbon neutral. Also, the hospital is full of sick people.
The hospitals are meant to be full of sick people 🙂
If you are healthy, why would you go to a hospital? Only sick people go to the hospital so your argument is stupid. Go back to the Netherlands and breathe your clean air.
Found the Panamanian that loves his diesel infested air. You probably are one of those that drives a Prado with clogged up DPF and thinks its normal.
All you people do is complain. If it’s that bad LEAVE! Ughhhh
The thread of people responding to mr Theo in such an incomprehensible manner is a demonstration of why Panama is still a third world country despite having so many resources.
These people dont understand there is a difference between an occupied hospital and an unnecessarily occupied one.
These people dont understand that the air quality in the roads of the city is unnecessarily dirty. Wanna drive with the top down in the city? Be ready to inhale hefty amounts of diesel smoke.
We are only carbon neutral because we have a small population and are not an industrious country. We are FAR from being an actual environmentally friendly country. Besides the lack of emissions regulations as pointed out by mr Theo, you can see this with the trash filled rivers that end up in the Bay of Panama, trash filled highways, trash filled cityscapes, the smell of trash is ubiquitous in Panama it’s like they like it with all the flies it brings and stuff because you will rarely find a trash container that is covered with a lid the majority of them are weirdly left open.
The hypocrisy is through the roof because while Panama boasts being carbon neutral, the country feasts on shiploads going thru the canal from very non carbon neutral countries. This is just another irrational piece of anti democratic propaganda crap media show coming from the ruling political party of the Noriega dictatorship that unfortunately made it to the world stage thru COP21.
This country is seriously lacking a cultural mindset as you can see.
I live in Panamá. I do like and feel that is a safer place compared to where I came from. I can also asure you that is very very HOT!… But at least there’s air conditioner in almost every place you will go.
The only thing that I do not agree with, is that the people from my perspective its not nice! Maybe the people that live in the rural area is, but the ones that lives in the city; they act like they deserve everything, that you have to wait until they decide to do the things that you ask, there is a really bad service in almost all the restaurants. The only thing that has been changing during these years, is that there is a lot of immigrants from colombia or venezuela, so if you go to a restaurant and they treat you well it may be because you are been attended by a Colombian or venezuelan people or because there is a manager that is not from Panamá.
I have travel to Guatemala, Honduras, Costa Rica and Panamá, and let me tell you that even they are small countries and very close between each other… There is a lot of difference between how a Panamanian people will work and treat you, as in the other countries.
I loved Panama but they are brutally deforesting it for mining and indigenous peoples still do slash and burn gardening and burn up acres of land for rice and such. Money that is given to them for improvements, etc. often doesn’t really get used for the improvements.