For Britons it’s not that difficult to work out the cost of moving to live in the likes of France, Spain or Italy as they are effectively on our doorstep – or at worst a short hop away from the UK. But for those who want to move and retire further afield to somewhere as exotic and exciting as Panama for example, getting a feel for the true cost of living can be tricky to say the least.
Panama has been repeatedly cited as one of the best places to live and retire abroad in recent years by multiple publications: it seems to achieve a ‘perfect’ balance between quality of life and cost of living. In addition, it’s a nation where the overall star is rising as investment into the extension and advancement of the Canal means that economic growth is ongoing.
The nation has long been a favourite with North American retirees, but finally we Britons are becoming aware of its appeal too. However, as stated, it can be really hard to get a good firm grip on what it could cost to retire there…until now! With sincere thanks to Jack and Ruthie Burns, expats now living in Panama, we can bring you the up to date cost of living and retiring to Panama to help you determine whether it’s the right nation for your retirement abroad.
Expats Jack and Ruthie Burns ‘retired’ to Panama after spending a lot of time exploring the world in their attempt to find the perfect retirement hotspot. I have placed the word ‘retired’ in inverted commas because since taking up residence in Panama they have never been so busy! The Burns spotted a real need in the marketplace for high quality, affordably priced residences for international retirees, and have gone on to develop properties to meet just that specification and desire. More about their very interesting development and the opportunities it represents at the end of this article…
As a result of the Burns’s hands on, close up experience of living day-to-day in Panama, we are able to bring Shelter Offshore readers a complete breakdown of what it could currently cost them to live in Panama. Please note, all prices are quoted in US dollars, and we have converted them into the pound sterling equivalent according to the rate of exchange on the date of publication of this article – which is 1USD = 0.63 according to XE.net on 8/10/2010.
How Much Does it Cost to Rent a Property in Panama?
A small, one bedroom, one bathroom home can be had for as little as 350 USD (220.79 GBP) per month plus the utilities. Note, such a unit may or may not have the likes of hot water, screened windows or doors, air conditioning, adequate cupboards or closet space, a decent sized fridge or stove or a minimal amount of furniture – so be sure to check and negotiate a deal with the landlord or agent depending on your requirements.
Also, bear in mind that if you’re looking for a furnished unit the furniture may be of questionable quality! In the more upscale areas such as Boquete you can expect to pay considerably more for a similar unit – upwards of 500 USD is not uncommon (315.30 GBP).
When it comes to the cost of any big-ticket item – from a car to a home - you may also come up against “gringo pricing” (and quality)! Gringo pricing is all over the place and is basically what the vendor/agent feels he can squeeze out of the foreign buyer in question! So, despite the above figures being accurate examples, it is not unheard of for foreign residents to pay anything from 650 - 2,000 USD plus per month for basic accommodation (that’s 410 – 1261.58 GBP).
Jack and Ruthie live in rural Panama just outside the city of David which is towards the border with Costa Rica – it’s a cheaper area of the country, and one less used to foreign residents, therefore costs tend to be lower and less likely to be inflated just because of the ‘gringo effect’! For example, you can rent a new 2 bedroom, 2 bathroom unit with all the bells and whistles (except A/C) for about 450 USD per month plus utilities (which is 283.87 GBP).
How Much do Utility Bills Cost in Panama?
We have based prices on general, average consumption…
Electricity - (not including air conditioning) you can expect to pay approximately $75.00 per month (47 GBP)
Water - between 7 - 10 USD per month is common (4.42 – 6.31 GBP)
Council tax equivalent for rubbish collection - in the city of David near where Jack and Ruthie Burns live it’s 4.50 USD per month (2.84 GBP)
Cooking gas - it’s usual to buy propane in a 20 pound bottle which lasts and lasts; such a bottle costs about 5.50 USD (3.47 GBP)
Internet connection - you can either choose to go to an internet café, of which there are plenty across Panama and for which you will pay between 0.50 and 1.00 per hour (.32 - .63 pence)...or you can get a connection at home which costs on average 45 USD per month (28.37 GBP)
T.V. - if you fit an aerial to your house you can pick up free TV – but all you will get is a couple of Spanish channels. If you want cable TV you’ll pay between 50 - 60 USD per month (31.54 – 37.84 GBP) and you’ll get lots of Spanish, English, Portuguese etc., channels.
Property Tax - for those who buy property in Panama the first 30,000 USD (18,900 GBP) value of your home is exempt and then you pay on a sliding scale.
Car rental - if you don’t want to buy a car you can hire one, but it is expensive unless you can negotiate a good deal. And you can probably only negotiate a good deal when you’ve been living in Panama for a while and you have established good contacts! However, factor paying at least 40 USD per day for a small car (about 25 GBP).
Note, you need nerves of steel when you first start driving in Panama. Jack Burns advises that in David they have just added a new traffic light which brings the total to 3 across the whole city! But apparently the lack of signage and traffic lights actually works quite well - once you know the “rules” of the road Panama style!
How Much Does it Cost to Buy a Car in Panama?
You can of course have complete choice of car – and therefore prices can range from dirt cheap for a beat up banger to a lot of money for an imported European supercar! So what do you want?
As an example on which you can base your research, Jack and Ruthie bought a brand new diesel Hyundai Sante Fe SUV in 2008, which is a comfortable 7-passenger vehicle. They love it and find it perfect for the environment, climate and terrain – it cost them 28,000 USD with tax (which is 17,643 GBP in real money!)
If you want to finance a car purchase it’s normal to put a minimum of 20% down – and financing will be about 7.5% roughly.
Fuel Costs - on average (as it changes by the minute!) you can expect to pay just over 3 USD per US gallon for petrol (1.89 GBP) and 2.85 USD for diesel (1.80 GBP.)
For the above type of car you can factor in annual fully comprehensive insurance costs to come out at 750 USD (472.68 GBP).
What About Insurance Costs in Panama?
Home Insurance - to insure a new, high quality condominium against for flood, fire, earthquake etc., up to an amount of 70,000 USD the cost is approximately 100 USD (63 GBP) per year.
Medical Insurance - as Jack Burns puts it: ‘for Brits, anything compared to the free NHS is going to look expensive!’
He and Ruthie pay 70 USD per month (44.11 GBP) for a joint policy which foots only part of their medical bills. On top of this they would expect to pay about 10 USD (6.30 GBP) if they needed to visit a doctor for example. Then, if there were any major claims required the costs they would pay would be on a sliding scale with the insurer paying a portion of the final bill.
For Americans the cost of healthcare in Panama is a fraction of what they pay back home – but for us Britons it’s a new cost we have to get used to – no matter where in the world we move to! Fortunately, compared to many nations Panama strikes a good balance between affordable medical costs and quality medical care.
The Cost of Living Day-to-Day in Panama
With special thanks to Ruthie Burns for her help in collating prices for everyday food and grocery items, here’s a good breakdown of what you can currently expect to pay to live in Panama day-to-day.
Note, if you shop around, bargain and buy in bulk or ensure you shop for ‘in season’ goods only, avoiding expensive imports, you can get some of the below figures down. However, we wanted to give you a realistic idea of what you can expect to pay to live a very decent quality of life once you have retried to Panama.
Bread – a whole-wheat loaf - 1.68 - 1.77 USD (just over 1 pound)
Milk – for 2 litres 2.24 USD (1.41 GBP)
Yogurt - .70 cents for 180 grams (.44 pence)
Chicken - breast w/bone and skin 1.32 USD/lb (.83 pence)
Chicken - boneless/skinless 2.80 USD/lb (1.76 GBP)
Chicken - wings 1.39 USD/lb (.88 pence)
Chicken - whole 1.25 USD/lb (.79 pence)
Hamburger meat - 1.98 to 2.65 USD/lb (1.25 – 1.67 GBP)
Pork roast - 2.40 USD/lb (1.51 GBP)
Sausages - 2.58 USD for 4 large (1.63 GBP)
Salami - 1.75 USD for 8 oz (1.10 GBP)
Bacon – 4 USD/lb (2.52)
Cheese (cheddar) - 7.99 USD for 2 lbs (about 5 GBP)
Cheese (Monterey Jack w/jalapenos) - 7.49 USD for 2 lbs (4.72 GBP)
Cereal (e.g., Nestle Fitnesse) - 5.89 USD for large box (3.71 GBP)
Tomatoes - 1.59 USD/lb (1 GBP)
Lettuce (e.g., Romaine) - 1.09 USD/lb (.67 pence)
Onions - 0.99 cents/lb (.62 pence)
Potatoes - 0.49 cents/lb (.31 pence)
Carrots - 0.95 cents/lb (.60 pence)
Cauliflower - 1.09 USD/lb (.69 pence)
Cucumber - 0.46 cents/lb (.29 pence)
Green peppers - 0.99 cents/lb (.62 pence)
Bananas - 0.07 cents each (4 pence!)
Pineapples - 0.75 - 1.00 USD each (.47 - .63 pence)
Limes – 0.15 cents each (about 10 pence each)
Tonic water - 3.65 USD for 6 cans (2.30 GBP)
Ginger ale - 6.59 USD for 12 cans (4.15 GBP)
Vegetable juice - 2.75 USD for 64 oz (1.73 GBP)
Dill pickles - 2.69 USD for a large jar (1.69 GBP)
Pizza/pasta sauce - 2.29 USD for a small jar (1.44 GBP)
Microwave popcorn - 0.55 cents (.35 pence)
Tuna per can - 0.75 - 1.25 USD (.47 - .79 pence)
Wine – 1 litre box 2 USD (1.26 GBP)
Beer - 24 bottles 8.25 USD (5.20 GBP)
Rum - 10.69 USD for 1.75 litres (6.73 GBP)
Vodka - 13.89 USD for 1.75 litres (8.75 GBP)
The Cost of Buying a Property to Retire to Panama
As mentioned at the start of this article, Jack and Ruthie Burns originally moved to Panama to enjoy something of an early retirement, however, after spending some time getting to know the nation, the people and the expatriates keen to make Panama their new home, they discovered a real need for a retirement real estate solution for those who wanted to live in a beautiful part of the country, and do so for a realistic price.
As a result they bought some land close to the country’s third city of David, and began creating a small development of affordable homes and condominiums suited to expatriates moving to retire to Panama, as well as those seeking a secure second home in the nation. The development is 100% mortgage free, and Jack and Ruthie oversee the construction, management and ongoing maintenance of every home for every owner – meaning that if you buy in, you are assured of a first rate service and a very secure purchase.
Jack and Ruthie’s development is already proving popular with those who have explored all Panama has to offer already – but if you’re new to considering this stunning, affordable and accessible country, visit the couple’s website http://www.easyretirementliving.com/ which will tell you absolutely everything you need to know about their development where prices start at 53 GBP per square foot, and where a completed condominium can cost you as little as 52,000 GBP…proving ultimately that Panama remains an affordable place to consider retiring abroad.