Trip to Panama

Panama is currently the “hotspot” for retirees and ex-Pats looking for a safe, civilized and cheap place to retire. Anyone on a fixed income wants to stretch it as far as possible, and to have an acceptable standard of living. However, I have heard from several people who have retired to Panama from Canada and USA that the cost of living is not as cheap as they had been led to believe.

In my limited experience, I think that if you retire to live in Panama and live as a Panamanian, then your costs will be much lower than elsewhere. Their staple diet, as elsewhere in the Caribbean and Central America, is rice and beans. Panamanians travel by bus, and drink beer, local fruit juice or tap water. They have houses with open windows to catch the breeze, and fans rather than air-conditioning. If you retire to Panama and want all the essentials you are used to expecting – quality ice cream, a decent bottle of wine, branded salad dressing, running a newish vehicle, living with an automatic washing machine and tumble dryer for example, then you will pay dearly for these imported luxuries.

Medical costs are the single biggest saving. A visit to an English speaking experienced and most caring local Doctor cost me $5. The prescription drugs prescribed were a further $1.60 – who needs health insurance for this? The downside is, I sat waiting with 20+ other locals for more than an hour in a corridor open to the elements, as the daytime temperature rose steadily.

There are more savings on local fruit and vegetables – a huge pineapple is just 75cents. I gave a street vendor 25cents for some bananas – and he filled my carrier bag. There must have been 30 fresh yellow bananas in the bag before I motioned “Enough!” Coffee beans are also locally grown and are a very reasonable $4 per pound.

Other foods are the same as the US or slightly more expensive. There is a Price Smart in several large towns in Panama, and their costs are much the same as their sister company Costco in the USA. Fresh chicken breasts are around $2.75 per pound, baking potatoes around $1 each; milk is $2.20 for 2 liters.

Buying and driving a car was more expensive than we had expected. There are no cars anywhere on the second hand market for less than $3000 – and they are basic Toyotas with at least 200,000 kms on the clock. The insurance is cheap at around $160 for the year including breakdown rescue, but gas is 10% more expensive than in the US. It was around $4.60 in June 2008. On the other hand, the local bus took me from Coronado to the center of Panama City (70kms) for just $2.50. Once there I could hop in a taxi and travel across town for $1.75.

Electricity is expensive, and only the mega-rich run air-conditioning 24/7. We had a small fridge/freezer, TV, computer and fans in all the rooms of our apartment. Our cooking and water heating was by gas. We ran the air-conditioning only in the bedroom, for about 10 hours and our electricity bill ran over $120 per month. Add a dishwasher, tumble dryer, and air throughout the apartment and the bill would have been sky-high!

Overall, with the right choices, the cost of living can be cheaper than in more civilized countries, but how much cheaper is in your hands. The choices you make directly govern your weekly costs, and if savings are your number one priority, then maybe Panama is not the place for you.