Why Panama and Why We’re Staying

On Sept. 1, 2021, my husband David and I arrived at Tocumen International Airport in Panama City, Panama, with only the luggage we could carry and a bold plan to start the next chapter of our lives in a foreign country.

Nearly a year later I can report that we’ve adjusted and re-adjusted our expectations, learned a lot about Panama, and regret nothing. Friends and family keep checking in, but as of this writing we’re here to stay.

Panama Bay

Our original reasons for retiring in Panama have held up: low cost, high standard of living, close to the East Coast, warm climate, low crime rate, and a stable government. Panama uses U.S. currency (so no money conversion) and remains all year on Eastern Standard Time.

In the U.S., meanwhile, political unrest, gun violence, and extremist decisions by the Supreme Court have only strengthened our belief that retiring in Panama was the right move for us.

This small Central American country of 4.5 million has it all—sleek glass skyscrapers, stucco homes with red terracotta roofs and wrought-iron balconies, corrugated metal stalls, and crumbling stone ruins. Indigenous women sell hand-sewn molas in the parks, there’s a mini-mart on every corner, and luxury retail stores fill the city’s modern shopping malls.

That contrast extends to the environment. Panama is one of only three “carbon negative” countries in the world, thanks to 63% forest coverage that captures more gas than the country emits. The largest wind farm in Central America is in Penonome, and wind accounts for 7% of Panama’s power generation capacity.

At the same time, city residents put trash bags out on the sidewalks to be picked up, garbage is routinely burned, and recycling programs are rare. Still, in 2014 Panama opened the first museum in the world dedicated to biodiversity, designed by architect Frank Gehry, in conjunction with the Smithsonian Tropical Research Institute.

We had heard stories from travelers before us that it would be easy to live on a fraction of the monthly budget we were used to paying in the U.S. And in some rural areas of Panama that's probably still true. But there's a catch: development comes at a cost.

View of city at night

Panama is among the most developed of the Central American countries, and many of the things that attracted us to the country—safe drinking water, reliable electricity, fast internet, good health care, infrastructure, and security—drive up the cost of living.

Indeed, the capital of Panama was ranked as the third most expensive city in Latin America to live in, after Buenos Aires, Argentina, and Montevideo, Uruguay, the La Prensa newspaper reported in June.

Since 2021, Panama has risen from the 117th most expensive city to live in globally to the 107th most expensive, La Prensa said, citing the latest ranking from ECA International, a consulting firm that has published cost of living reports since 2005.

But bottom line, except for the occasional protest, Panama remains an affordable, comfortable, and peaceful place for us to live.

Reality Check on Apartment Living in Panama City

In hindsight, we spent too little time looking for an apartment and negotiating rent, so ended up paying more than we might have. On the other hand, we live in an excellent location directly across from the Cinta Costera, a tree-lined park with soccer courts, fountains, exercise equipment, and a long, paved trail for runners and cyclists.

The Cinta Costera was a major $189 million waterfront reclamation project completed in 2009. David walks about 10 km of its trails every morning, stopping to feed the cats who live there. In the evenings, the park is filled with vendors selling hot food, souvenirs, and shave ice.

PH Sky Residences on Avenida Balboa

Our apartment building has a rooftop pool with stunning views of Panama Bay, as well as a lap pool and gym above the parking garage. For security the building has fingerprint scanners to access doors and elevators.

We rented a fully furnished apartment, but that can mean different things in Panama. Ours came with furniture and electronics, but we had to buy linens and dishes. The kitchen had a microwave, but not a toaster oven or coffee maker. Even so it would have been more expensive to ship those items from the U.S. than to buy them in Panama.

We also came to discover the never-ending maintenance of our 2009 apartment building. In the last year, painters spent two months on the building’s exterior, the pools were closed three months each for renovations, and the elevator to our apartment was out of service at least once a month for repairs.

The four ductless air conditioners in our apartment were so old and inefficient our landlord eventually replaced one of them. The kitchen faucet, water pipes, and washing machine all needed repairs during the year, and one of the TV sets died. The biggest project involved resetting several large tiles that were falling off the bathroom walls.

Our coffee view

We had ants in the kitchen for about three months in the spring, which we learned was an annual event. We also learned marble tile floors tend to chip easily, and mold must be cleaned regularly from the air conditioner and dehumidifier filters.

Most inconvenient, gas to the building was cut off for 20 days in July for a government-required inspection that occurs every three years. That meant no hot water, clothes dryer, oven, or stovetop cooking.

To get us through, our landlord installed a temporary electric water heater (which routinely tripped the circuit breaker) and loaned us an electric burner for cooking. I hung clothes near a sunny window to dry, and took sheets and towels to a same-day lavandería—$6 per load for wash, dry, and fold service.

Great views though!

First Explorations

The people who live in Panama City come from all over the world, many with ancestors who helped build the canal in the early 1900s. We’ve met people from Europe, Asia, South America, Australia, Canada, and the U.S., retirees and some who work for international organizations.

About 80% of Panama’s economy is based on its services sector, which includes the Panama Canal, the financial industry, tourism, and the Colón Free Trade Zone. Manufacturing and agriculture make up the remainder.

Cargo ship from a recent fishing trip

Within months of arriving, David was let go from his job in the U.S. It was the second time in two years from the same employer, so while it was a setback, it wasn’t a complete surprise. And, with most of our retirement savings tied to the markets, we’ve had to be extra cautious with our spending this year.

In June, David started up his own recruiting business that has really taken off, which requires only a telephone, internet connection, and 20 years experience in the hospitality industry.

Working from home

We don’t regret spending our first year in Panama City. It’s more expensive than other parts of the country, but had easy access to our law firm and government offices. We’ve used this year to obtain our permanent residency visas, national ID cards, and driver’s licenses.

Setting up a bank account is far more difficult in Panama than in the U.S. Our immigration attorney helped us open an account, which requires documentation and a personal reference in Panama. We chose Banistmo—one of the largest banks—which offers a sophisticated app for online banking, paying bills, and transferring money, as well as an option for customer and ATM service in English.

Exploring the surrounding countryside without a car is difficult, so in July we bought a used 2019 Toyota Fortuner (4x4 diesel) with the help of a bilingual car broker who handled the bank transaction, registration, and insurance. The lowest-deductible option for insurance came out to less than $1,000 per year. We also got a reloadable Panapass device to pay tolls.

Toyota Fortuner in front of F&F Tower

We discovered the value of a true four-wheel drive vehicle while visiting the Altos de Campana National Park and mountain town of Altos del Maria. For some reason, Waze—our navigation app—directed us onto some seriously remote, steep, unpaved roads for more than 10 km, which our Fortuner handled effortlessly.

Our truck is good for local excursions too, such as driving out to the Causeway Islands—four small islands (Culebra, Perico, Flamenco, and Naos) near the city accessible over the scenic Amador Causeway, a 6 km road and walkway lined with palm trees, built with the rock extracted from the canal.

Hundreds of luxury yachts, sail boats, and fishing trawlers dock at the islands, which also accommodates cruise ships and local ferries. The islands have dozens of restaurants, bars, ice-cream shops, and places to rent bicycles or electric scooters.

View from the Amador Causeway

Cost of Living in Panama City

It’s far less expensive to live in Panama than in the U.S., but that’s not to say it’s dirt cheap to live like kings.

One cost that was higher than expected was electricity. We had heard about extremely low utility bills in Panama, but came to realize that didn’t include air conditioning. Homes in the cooler mountain regions of Panama don’t have AC units (no need) so electric bills are low. But on the coastlines, where temperatures soar, air conditioners are always on.

Internet and phone service, on the other hand, are relatively cheap and we’ve been pleased with the speed and reliability of our local providers. We pay Tigo $67 a month for high-speed (600 Mbps) internet and cable channels, and Claro another $28 each for unlimited data and voice service for our phones. Like most everyone in Latin America, we primarily use WhatsApp to communicate.

Transportation costs are also low and it’s easy to get around the city without a car. There are plentiful, inexpensive Uber drivers and taxis, a new subway system, and multiple bus routes. It’s a flat rate of 35¢ per ride on the subway, and 25¢ per ride by bus, paid for by tapping the same reloadable card on entry. 

World's best ceviche

Services such as housecleaning and haircuts are very affordable in Panama. Our landlord introduced us to Mariana, who spends four hours cleaning our apartment every Wednesday morning for $30 per visit. Many housekeepers will spend the day cleaning for that price, but I prefer to do my own laundry. A spa pedicure at the d-uñas salon in Multiplaza mall is $40.

Prices at restaurants and cafes in the city are comparable to those in the U.S.—with a big range depending on where and what you eat. For example, a latte or cappuccino is usually $3.50 in a local cafe and $5.00 in Starbucks. Fresh fruit smoothies (batidos) are everywhere and can run to $5 each, while a 12 oz. cup of fresh-squeezed orange juice is $2.

Italian restaurants are popular in Panama. Prices for a really good oven-baked pizza at our local Zi Maria franchise run about $20 depending on toppings, while a serving of meat lasagna is $12. A styrofoam cup of the world’s best mixed seafood ceviche at Mercado de Mariscos, with one packet of Pascual cocktail saltines, is $3.50.

A large meal of roasted pork, yuca, rice, and salad is $13 at La Cubanita, a small outdoor fonda, while a plate of three specialty tacos at Tacos La Neta is $10.50. A quality 12 oz. skirt steak at Gauchos is $34, while one of our favorites for lunch is Empanadas Don Carlos, a deal at 70¢ each (we usually get two carne empanadas each and exact change is expected). 

Another favorite—Onde El Gringo—serves amazing Texas-style barbeque with U.S. beef. Sold in half-pound portions, it's $16 for brisket, $14 for ribs, and $12 for pulled pork.

Lechona special at La Cubanita

Barbecue platter at Onde El Gringo

Heat, Humidity, and Health Care

What’s been strange for me is the relative constancy of the climate—the sun rises and sets about the same time every day, and the temperature never varies by much. It’s either rainy or dry, but the plants (seemingly) are always green and growing. Each season is marked by a date on the calendar rather than a change in temperature.

Panama’s geography is almost incomprehensible. The country is an S-shaped isthmus linking Central and South America (sometimes called a land bridge) about 8° north of the equator. Its shape makes Panama the only country in the world where it’s possible to watch the sun rise over the Pacific and set in the Atlantic. 

One of our great joys is sitting on our balcony every morning to drink coffee and watch the sun rise over the Punta Pacifica neighborhood that juts out into Panama Bay. The bay is the Pacific entrance to the Panama Canal.

Sunrise over Punta Pacifica

Locals say Panama has two distinct seasons: winter, which is rainy and runs from May through November, and summer, which is dry and runs from December through April. During the rainy season it’s common for heavy rains to fall for an hour or so in the afternoons and flood low-lying streets.

We only experienced one (short) tropical storm, which caught the city unaware in late July. Strong winds uprooted trees, sent outdoor furniture flying, and broke windows. We lost the blades to an outdoor ceiling fan and a large wicker planter from our balcony on the 26th floor. Still, there has never been a recorded landfall of a hurricane in Panama.

Walking in the city is more challenging than in the U.S. because sidewalks—where they exist—are uneven and often cracked or broken. Large gaping holes are left uncovered and unmarked, and it can be a big step off the sidewalk to the street.

My biggest challenge has been the combined heat and humidity. I knew that Panama was a tropical country, but I overestimated my ability to deal with the climate on a daily basis. The average annual high temp in the city is 31°C (88°F) with 76 percent relative humidity. By comparison, most people feel comfortable with humidity at 35-50 percent.

Afternoon lessons at the Spanish Panama Language School three blocks from the subway station meant arriving at class in a full sweat. Carrying a couple bags of groceries home from the Riba Smith supermarket, just four blocks from our apartment, was grueling.

Strong sun in San Blas

Local dermatologists are quick to caution that the sun’s UV rays are much stronger in Panama than in the U.S., so we’ve learned the importance of strong sunscreen and hydration. Even though he walks daily, David had a suspected case of heat exhaustion early this year (or possibly a bug from contaminated water) that required a doctor’s visit.

I’ve been impressed with the availability, quality, and cost of health care in Panama, where doctors still make house calls. The doctors and dentist I’ve been to all had training in the U.S. and speak English. If needed, the nearby Pacifica Salud Hospital is partnered with Johns Hopkins to provide specialized services.

Health care costs are extremely low at the public hospitals, and lower than the U.S. at private clinics and hospitals. My last regular six-month cleaning at a private dentist’s office was $60.

Prescription drugs are not covered under any insurance plan and are generally expensive, with each pill sold individually. Unlike in the U.S., pharmacists can recommend and sell you the drugs you need (except for antibiotics and narcotics) for whatever symptoms you have.

TIP Means "Get Used To It"

Turns out there are a lot of pros and cons to living in Panama.

To attract retirees, Panama has a discount program for foreign residents of any age who are living in the country under a Pensionado visa. The same discounts are given to all female residents after age 55 and all male residents after age 60. Most of the time I just show my national ID (cédula) to receive the discount, but sometimes it takes effort.

The discounts are substantial, and include 25% off utility bills, 25% off airline tickets, 20% off doctor’s bills and 15% off dentist’s visits. There is also a 50% discount at hotels during the week, but it can be limited to certain rooms or come with other restrictions.

Hotel La Compañia in Casco Viejo

On the other hand, getting useful information is sometimes a challenge, as Panamanians often have a roundabout way of answering questions. There's an expression among expats called TIP or This Is Panama, which roughly means "it is what it is."

TIP means repairmen show up when they do, stores will stock an item one day and not the next, some prices are negotiable, and information on a website may or may not be accurate. There are no street addresses, so directions can be an adventure. Parades, protests, and shutdowns seem to happen randomly.

Initially language was a significant, but not insurmountable barrier to getting what we wanted. Some locals speak some English, but our lives got easier once we learned more Spanish. Still our conversations tend to be a crazy mix of Spanish, English, and Google translate, but with a little good humor it works.

When we first arrived in Panama I spoke no Spanish and quickly hired Alicia, a private tutor who came to our apartment for one hour in the mornings, four days a week. In March, I started at the Spanish Panama school and took two, two-hour lessons each week with Victoria. I also practice daily on the Duolingo app, but even so I’m a long way from fluent.

The Spanish Panama Language School

We’ve had to go metric and now measure our morning walks in kilometers. We buy 250 grams of meat at the deli counter, not half a pound. And it’s fun to drive 100 km (62 mph) on the highways.

Panama has maintained a much stricter Covid protocol than the U.S., and events are only now returning. The city’s famous Carnival parade was canceled again this year. We’ve been to smaller outdoor festivals but not an indoor movie theater. Restaurants are back to operating at full capacity, but it seems a lot of places didn’t survive the pandemic.

Police are far more visible and have much more discretion in Panama than in the U.S., and traffic stops are routine. Heavily armed police stand patrol on the streets and ride motorcycles through the city. The homicide rate is higher than in the U.S., but confined to the drug trade. Random school or grocery store shootings are nonexistent.

Panama is predominantly Catholic, with relatively high rates of literacy and education. School children wear uniforms and saints are honored with lit candles. Still, there was a raucous Pride celebration at the end of June this year in Parque Urracá with a deejay, dancing, and fireworks.

Beaches and the Dread Pirate Morgan

Last year, museums, tourist sites, and even the historic district of Casco Viejo seemed a bit empty, but they’re getting more lively now. The outdoor mask mandate was lifted on March 28, although the majority of people on the street still wear them. The indoor mask mandate was lifted for the first time on July 11.

Casco Viejo sits on a peninsula heavily damaged by the 1989 U.S. military invasion that removed Manuel Noriega from power. It was named a UNESCO World Heritage site in 1997, which drew considerable investment by developers who are faithfully restoring the Spanish Colonial architecture of the buildings.

Panama's National Theater

The district (also called Casco Antiguo or San Felipe) is the site of the presidential compound, National Institute of Culture, and several centuries-old churches. It’s now a tourist hotspot as well, with high-end restaurants, cafes, boutique hotels, and rooftop bars. David stops daily at Nomada, one of several good coffee shops in the neighborhood.

The narrow brick streets of Casco Viejo lead past several public plazas with shady trees, including the lively Plaza Herrera with lots of outdoor dining. At one end of the district is the French monument to the canal with an amazing view of the city. We saw an orchestra perform at the ornate Teatro Nacional, which was recently renovated.

Panama was originally established northeast of the city in 1519, on a site now called Panama Viejo. The old city was burned to the ground in 1671 by the dread pirate Capt. Henry Morgan—now a brand of rum. In March we went to La Ciudad de Piedra, a festival in the stone ruins with a live performance about Panama’s history.

Today, the country is most famous for the Panama Canal, a 50-mile channel opened by the U.S. in 1914 connecting the Atlantic and Pacific oceans. A treaty signed by President Carter turned over full control of the canal zone to Panama on Jan. 1, 2000.

Miraflores Locks

The canal still operates using three sets of locks to raise and lower ships 27 meters from sea level. It was expanded and a third lane opened in 2016 to accommodate New Panamax ships. The canal is a major global trade route and moved a record 516 million tons of goods during the 2021 fiscal year.

From our balcony we can see the “parking lot” of giant container ships waiting in the bay to enter the canal, which takes an average of 8 to 10 hours to transit. The visitor’s center at the Miraflores locks has a spectacular observation deck for watching the ships up close.

Panama also is famous for its beaches, but there are no swimming beaches in the city itself; the embankment is rocky and the water is murky, polluted, and we’ve seen saltwater crocodiles. The nicest beach closest to the city is a 30-minute ferry ride to Taboga Island, while the most beautiful white sand beaches are on the (harder to reach) San Blas chain of islands on the Atlantic side.

Waiting for the boat on Isla Perro Chico in San Blas

Rental house in Bocas del Toro

Over the New Year’s holiday we rented a house on Carenero Island in the Bocas del Toro province of Panama, which is an archipelago in the Atlantic bordering Costa Rica with spectacular crystal-clear turquoise water.

Just over the Bridge of the Americas (at the Pacific entrance of the Panama Canal) is the Westin Playa Bonita resort, which has a decent beach at high tide. Down the road from there is the small beach town of Veracruz, which has a row of thatch-roofed restaurants overlooking the ocean with gorgeous views. Our favorite there is Praia.

Wildlife, Hiking, and Coffee

Panama has all levels of hiking trails through the rainforest. Closest is Cerro Ancon, a steep hill with platforms at the top overlooking the city, while Parque Natural Metropolitano is the largest wildlife refuge within the city. The Soberania National Park on the outskirts of the city has more advanced trails, while the adjacent Gamboa resort keeps sloths, butterflies, and frogs.

A couple hours outside the city in the mountains is El Valle de Anton. The town has inns, cafes, and a nice outdoor market for vegetables, souvenirs, and candy. There are many hiking trails in the area, including Chorro Las Mozas that has waterfalls and a natural pool. Most famously, there is a rock formation known as La India Dormida that resembles a sleeping woman.

Sloth in Metropolitan Park

We’ve been out in a small boat to the tiny islands along the edges of Gatun Lake, the freshwater lake that makes up a major section of the Panama Canal. The islands are home to monkeys, sloths, birds, bats, and crocodiles, among other wildlife.

We visited an Embera village on the Chagres River in central Panama, home to one of the country’s indigenous tribes. Most Embera live in the Darién Gap, a large region of rainforest that covers the border between Panama and Colombia. The rainforest is so dense that the Pan-American Highway (the network of roads that link the Pacific coastal countries of the Americas) breaks for about 65 miles at the Darién Gap.

Most important to us, Panama produces an impressive selection of coffee. In February we spent a long weekend at Finca Lerida, a farm high in the mountains in the Chiriquí province, to see how coffee is grown and processed. Alongside the coffee plants were dozens of exotic species of flowers and birds, including orchids and hummingbirds.

While there we toured the nearby Elida Estate, one of the Lamastus Family Estates, which grows the world’s most expensive Geisha coffee. We now look for cafes in the city that serve coffee grown in the mountains of Panama.

Coffee cherries

We took a one-week trip back to the U.S. in late April to visit our son, who is at the University of Maryland. We brought an empty suitcase and did some shopping, more for brand-name items we love rather than unavailability in Panama. I bought several shirts and pants with high cotton content, which is surprisingly difficult to find in Panama.

Tocumen (PTY) often ranks as the largest/busiest international airport in Central America. It serves as the hub for Copa Airlines, which offers two daily nonstop flights to Washington Dulles International Airport (IAD). Flights are listed at 4 hours 50 minutes, but often arrive early.

Grocery stores in Panama are as well stocked as any in the U.S., but prices and availability vary a lot depending on the store. Riba Smith is popular among expats for a big selection of brand-name imports, but it’s expensive. A new Rey opened in our Bella Vista neighborhood, with less expensive local staples like chicken, yogurt, fresh fruits and vegetables, and a bakery.

We live near the Mercado de Mariscos (seafood/fish market) that sells both fresh fish to take home and cooked meals to eat there. Each stall has its own recipe of ceviche made with seafood caught that morning. Nearby is the Mercado San Felipe Neri, a cavernous indoor market with stalls for meat on one side and fruits/vegetables on the other.

San Felipe Neri Market

Fresh fish at Mercado de Mariscos

If there’s a typical meal in Panama it’s a whole or filet of Corvina fish (a white fish similar to Sea Bass) with garlic sauce, served with patacones (flattened fried plantains) or coconut rice, for $10 to $12 at the seafood market.

El Trapiche is a traditional Panamanian restaurant chain that serves dishes like ropa vieja (shredded beef and tomato stew). And, although we’ve long believed U.S. beef is the best in the world, our favorite steak restaurant—the eclectically designed Marzola in Casco Viejo—only serves steaks from Argentina.

Whole fried Corvina

Argentinian skirt steak at Marzola

The Problem with Mail-In Ballots

With U.S. politics, our experience has been it’s a topic hotly debated on Facebook and mostly avoided in person. But after working for 32 years at a news organization, I haven’t been able to ignore Washington entirely.

U.S. citizens living abroad may vote in federal elections through the last state in which they lived. Our state of Maryland delivers absentee ballots electronically, but they must be printed out and mailed back.

This is a problem, because Panama’s mail service is extremely poor and private carriers like FedEx charge exorbitant rates. Fortunately, the U.S. embassy in Panama allows citizens to drop off election ballots in prepaid envelopes for delivery to the U.S.

Panama's flag 

Speaking of mail, we’ve been pleased with the service from US Global Mail, a company based in Houston, Texas, that we authorized to handle our paper mail in the U.S. The company uploads a scan of our mail to a secure online site and will ship anything we need.

We have a separate account with MBE (Mail Boxes Etc.) in Miami that will ship packages to the MBE facility of our choice in Panama. We can get flat mail and boxes shipped from the U.S., but it’s not cheap, especially for bulky or heavy items.

Having electronic copies of all our documents was particularly helpful this year when filing taxes, which our U.S. accountant handled for us completely online. For foreign residents, Panama does not tax income earned abroad, so we don’t have to file tax returns in Panama.

To keep up with the news in the U.S., we have digital subscriptions to the New York Times, Washington Post, and The Atlantic. I’m also active on Twitter.

In addition to hosting political battles, Facebook groups are the overwhelming favorite among expats for sharing information, organizing happy hours and hikes, and getting recommendations. David keeps up, but I’ve never had a presence on Facebook and I’m not starting now.

The missing piece is local news, which we get in bits and pieces. Panama’s President Laurentino "Nito" Cortizo received visits this year from U.S. Secretary of State Antony Blinken and First Lady Jill Biden, ahead of the 9th Summit of the Americas in Los Angeles in early June.

More interesting is Panama’s diplomatic history. John Feeley, the longtime U.S. ambassador to Panama, resigned in March 2018 to protest President Trump’s failure to condemn the neo-Nazi march in Charlottesville, and the position has been vacant since.

President Biden first nominated Mari Carmen Aponte, a former U.S. ambassador to El Salvador, in October 2021 to serve in Panama, but she has not yet been confirmed by the Senate.

Moving to Chiriquí

Looking ahead, our plan is to pack up our few belongings and move to the Chiriquí province in western Panama, which is mountainous and much cooler than the city. A lot of U.S. expats live in the valley town of Boquete, so that’s likely where we’ll end up.

Helping us move will be Miguel Samaniego, a Panamanian tour guide we met last year who owns a fleet of vans. We’ve hired him frequently for runs to the airport and for tours with friends, and communicate with him often as we navigate the country’s culture.

Like this year, we plan on renting a furnished apartment, and it’s likely we’ll continue to rent for the next few years until we’re absolutely sure where we want to live. It’s easy to buy property in Panama, but much harder to sell.

Another benefit, living in the mountains comes with lower average rents and electric bills, so we’ll be in an even better position to keep our costs down moving forward.