Tax Advantages

One of the most compelling reasons to retire in Panama is its tax-friendly environment. The country does not tax foreign-sourced income, meaning your Social Security benefits and other retirement incomes from abroad are not subject to Panamanian taxes. Additionally, Panama offers low property tax rates, with primary residences valued under $120,000 being exempt from property taxes. For properties above this threshold, tax rates range from 0.5% to 0.7% of the property’s assessed value. Source

Senior Citizen Benefits

Panama’s Pensionado Program is renowned for its generous benefits to retirees. To qualify, applicants must demonstrate a lifetime income or pension of at least $1,000 per month from a government program, international organization, or private company. Accepted income includes Social Security or other government retirement funds, as well as retirement benefits from a private corporation. Once enrolled, retirees enjoy a range of discounts, including:

• 25% off utility bills
• 25% discount on airline tickets and 30% on other transportation
• 15% off loans taken in your name
• 1% reduction on home mortgages for personal residences
• 20% discount on doctor’s bills and 15% on hospital services if no insurance applies
• 15% off dental and eye exams
• 10% discount on medicines
• 20% off professional and technical services
• 50% discount on entrance to movie theaters, cultural, and sporting events
• 50% off hotel stays from Monday to Thursday, and 30% off on weekends

Additionally, there’s a one-time import tax exemption for household goods up to $10,000 and an import tax exemption on a new car every two years. Source

Cost of Living

Panama offers a high standard of living at a lower cost compared to many Western countries. According to Numbeo, the average cost of living (including rent) in Panama is 69.4% lower than in the United States. Rent prices in Panama are also notably more affordable, being 112.6% less than in the United States. Source

For instance, a one-bedroom apartment in Panama City’s city center costs an average of $758.33 per month, compared to $2,154.55 in Miami. Grocery prices in Panama City are 28.3% lower than Source