Ten years ago Panama was in the forefront of attracting American retirees. Hailed as another Florida in the making, many soon-to-retire Americans looked at Panama as an ideal country in which to retire. With a democratic government and stable economy, solid 30% plus middle class, many members of which were educated in the United States, Panama was an attractive destination for those in search of a country in which to retire. But much has changed since.
In the mid 90s Panama established retirement visas patterned on the concepts pioneered in Costa Rica. With mere $500 per month in guaranteed retirement income, an American retiree could easily qualify for a “pensionado visa” in Panama, which guaranteed permanent residency in the country. With $600 of guaranteed pension, namely social security, an American couple could settle in Panama and remain for rest of their lives. While Costa Rica costs of living were skyrocketing, many Americans were convinced Panama was the place where to go.
For a while it seemed that Panama would get hundreds of thousands of Americans, all building or buying a house in Panama. Number of gated communities, such as for example the development, all geared to attract Americans, sprung up all over Panama.
Then slowly cost of living in Panama too began to increase, including legal fees charged by Panamanian lawyers, costs of building permits, costs of construction and hired labor of any kind. Americans were subject to being charged higher rates by any contractor who saw the gringos as easy source of higher revenue than the domestic population was willing to pay.
Then came 2008 and the sub-prime mortgage debacle and with it start of the economic meltdown that has triggered a chain reaction of downward trends, from decreasing property values to unemployment. Suddenly those Americans who were trying to sell their home at home not only could get the price for it they were hoping for, they could not sell it period. And moving to Panama, or any other country for that matter, retiring abroad, was no longer an option to look forward to anytime soon. It became a dream all over again.
It seems the tide is beginning to change. Unemployment has come down in recent months and it may be we have gotten over the worst. Though many stopped looking for work and their real situation is not easily discernible, and the current rate of change in the US, the underlying national debt and volatile dollar all seem to clearly suggest that prospects of significant changes coming soon can’t be determined with any kind of predictable certainty.
Perhaps the bottom line approach remains: undeniably those who were ready to retire and move to Panama five years ago need to realize that if they are really still wanting to make Panama their second home, they must make the necessary change at all cost, now, as they are definitely not getting any younger. That means you must quit your job, if you still have one, retire, sell your home for at least a marginally reasonable price, and move to Panama!