I think it’s pretty clear from my other posts, but I love living in Panama. If I didn’t love living here, I wouldn’t live here. I really do feel that I live a more affordable, more exciting, and overall more content life here than I did while living in the US. With that being said, the main reason I started this blog was to paint people a realistic idea of what living in Panama is like. The reason for that is because many retirement websites oversell Panama and paint an unrealistic picture of what life here is like. Sometimes they do this because they have a financial interest in selling real estate to expats, other times it’s just because they think painting rosy pictures is what gets readers.
Overselling has a real, negative effect on people’s lives. People often uproot everything, and make irrevocable changes to their life in order to move to Panama. If someone sells their house and all their things to move to Panama in retirement and finds out it’s not like they were promised, there’s no going back. So with that in mind, I want to make sure that people considering Panama have a realistic idea about what it is like. So here are 7 things that retirement websites won’t tell you about Panama.
1. It’s probably going to be more expensive than you think
I’ve passionately argued on this blog before that cost of living in Panama is cheaper than cost of living in the US, and I think the data backs me up. However, there’s a real difference between “cheaper” and “you can live a luxury filled life for $1000 a month.” My wife and I live for about 50% less in Panama than we do in the US, and I breakdown how we do it here. But 50% less is still almost $2700 a month. And most of our savings are because we made lifestyle adjustments that allowed these savings. For example, we dine out significantly less, and we live without a car (vs. having 2 in Tampa). While item to item costs are cheaper, to save, you are going to need to significantly adjust your lifestyle.
Now if you want to live outside of Panama City, it is definitely cheaper than living inside the city. And it is possible to live on around $1000 a month in certain places. Kris from The Panama Adventure has great cost of living guides on how her and her husband live in David, Panama on between $800-$1200 a month. So it can be done. But it’s likely going to be for a much simpler life than you’ve come to expect in the United States. And if you try to do it in Panama City, or popular expat destinations like Coronado or Boquete? Forget it.
Overall, most expats find that life in Panama ends up being more expensive than they thought, particularly if they trusted a retirement site for cost of living estimates. There are many different lifestyles that can be lived in Panama, including affordable ones, but things are not always cheaper, and if you are not prepared to make changes to your lifestyle, do not expect big cost savings.
2. To live very cheaply, you’re going to need to forgo Air Conditioning (and other basic luxuries)
To highlight my previous point, air conditioning is a good example of what most expats who are trying to live the ultra cheap ($1000 a month) lifestyle will have to give up, for two reasons. The first is that while there are houses that rent for a few hundred dollars a month in some towns, they are going to be very basic houses that will almost certainly not have air conditioning installed, along with other basics like washer/dryer, dishwasher, etc (although dishwashers are uncommon anywhere in Panama, regardless of cost of rent. We don’t have one).
The second is that even if you do get a place with AC or decide to purchase and install one yourself, you won’t be able to afford the electric bill to run it. Electricity is very expensive in Panama. It varies depending on location, but where I live, it costs $0.26 per kilowatt hour, which is more than twice the cost of what I paid in Florida. Now most places get some electricity subsidy that’s partially based on where they live and how much electricity they consume. We get about 25% subsidy. Still, that’s very expensive, and if you run AC regularly, expect $150-$200 electric bill.
Some locations (particularly mountain locations) are better suited to live without AC than others, but it’s still going to be hot most places. For Panamanians who have grown up in this heat, it’s no big deal. My aunt and uncle, even though they had the money to afford a place that has AC, live without AC (and hot water showers) in Panama City, because for them, this wasn’t that big a deal. But if you’re not used to the temperatures, it can be a huge adjustment.
3. Getting by without knowing some Spanish is difficult
Any website that tells you that “most people in Panama speak English” is flat out not telling you the truth. A lot of the Panamanian business community does speak at least some English, and I have many Panamanian friends who are fully bilingual. However when it comes to most people that you will interact with in day to day life, such as store clerks, wait staff, taxi drivers, repairmen, etc, they will speak little to no English. So if you don’t have at least some basic knowledge of Spanish, or aren’t willing to learn, you can find yourself getting frustrated quickly.
I know some expats who have lived here for years without any Spanish, and they seem to be doing just fine. But personally, I couldn’t imagine it. I do speak some Spanish, but still get frustrated a lot with basic communication. And I have a fully bilingual Panamanian wife with me most places. So I don’t know how people make it here without at least some Spanish in their household. You don’t need to know right when you move here, but you should be willing to learn.
4. You will experience culture shock, and it will frustrate you sometimes
Outside of the language barrier, anyone moving to Panama should understand that the culture and lifestyle is very different, particularly the pace with which things move. Things move a lot slower (expect for driving, which everyone moves crazy fast), and generally at a more relaxed pace. Overall, on a whole, this is one of my favorite things about Panama, and it leads to a much more relaxed lifestyle. But that doesn’t mean it’s not without frustrations. Expect things not to be done when they are supposed to, things to take much longer than expected, needing to speak to multiple people to get the thing you could’ve gotten done through one. Panamanian culture is not known for its service, so expect service at restaurants and businesses to be slower and less friendly than you are accustomed to (with obvious exceptions).
5. If you live outside the city, infrastructure is lacking
Panama City and its surrounding suburbs are home to half of Panama’s 3.5 million people, and as such, the city is home to most of Panama’s infrastructure. All of those pictures you see of skyscrapers and metro trains and big malls and hospitals? That’s Panama City. The rest of the country, particularly areas that are the cheapest to live, doesn’t have the same infrastructure. This can mean different things. It can mean that some of the roads aren’t as good, to needing to drive a while to get shopping done besides food shopping, to lack of reliable medical care.
Medical care is definitely a big issue for retirees, and one that needs to be considered carefully when choosing a place to live. Panama City does have first class medical care, with world class doctors and high end hospitals (for much cheaper than medical care in the US). Outside of the city, your options become lesser. Many towns have clinics or small hospitals, but not major hospitals. Or they have public hospitals, which may not be the same quality as the private hospitals in the city. These may be fine for small-medium sized health issues, but for major issues or emergencies, you may need to be transported to the city.
6. Get used to living with water and power outages
No matter where you live in Panama, occasional power and water outages are a way of life. A few high end places that have excellent back up water tanks and generators that will fully cover their buildings in the case of outages, but other than that, everyone else is affected. In Panama City, this usually isn’t too bad. I wrote about my own experiences here. We usually have either a power or water outage every 1-2 months. They usually only last an hour or two, but occasionally, we get a big one. Last June we lost water for 4 days. Our building has emergency generators, but they only power elevators and common areas. We also have reserve water tanks, but they only last so long before running out.
Outside of the city, you can be faced with more frequent outages, depending on where you live. Again, this has to do a lot with the area you live in and your cost. If you are trying to live a super cheap lifestyle, it may be in a place that deals with frequently issues with water and power. My mother-in-law lives in Arrijan, and while her power situation is pretty good, her water situation is not. Particularly during dry season, she is often limited to only a few hours of water a day. Some areas on the beaches also have significant water problems as well.
7. If you need to work, you may not be able to, and will work for significantly less
This doesn’t apply for anyone retiring entirely on their social security/pension, but for anyone who is partially retiring, or has a spouse or partner who needs to work, this is something to definitely take into consideration. The Pensionado visa, which is the most common visa that retirees use to move here, does not authorize you to work. You will need to get authorized separately to work either through the friendly nations visa or getting a work offer by a company. Opportunities to work in smaller towns will also be limited. Even if you can land a job, Panamanian salaries are significantly less than in the US. 85% of Panamanian workers make less than 1000 a month. So unless you can land an international work offer, than is what people should expect.
Now, if you are entrepreneurial, Panama does offer good opportunities to open businesses. I talk a little more about that in my earning a living in Panama article.
I write this article not to scare people away from moving to Panama, but to simply take off the blinders that are given to people, and paint a realistic picture of what people can expect when moving to Panama. I recommend to everyone that before you seriously start planning a move, visit first, particularly the areas you are thinking of moving, and see if it is right for you. Many of us love living in Panama, but some people burn out here, and it’s usually because they came here with unrealistic expectations. To see why I love living in Panama, you can read my article 7 Reasons Panama is the Place for Me.