Panama’s Pensionado Program

The Big Joke: Panama’s Pensionado Program

There are lots of “big jokes” when you adopt an expat lifestyle.  That life will be easier and less complicated – generally a big joke.  One of the biggest “big jokes” about Panama is something everyone pushes when promoting relocating to Panama.  Look at about any Web site about Panama and you will find the “pensionado” or retiree discount program being promoted as a wonderful incentive to move to Panama.

Examples:

And that’s just page 1 of a Google search on “Panama pensionado discount” but you get the point.

Yes, it IS the law! And it goes like this, courtesy of International Living:

In Panama, qualified pensionados or retirees are entitled to:

  • 50% off entertainment anywhere in the country (movies, theaters, concerts, sporting events)
  • 30% off bus, boat, and train fares
  • 25% off airline tickets
  • 25% off monthly energy bills
  • 30% to 50% off hotel stays
  • 15% off hospital bills*
  • 10% off prescription medicines*
  • 20% off medical consultations*
  • 15% off dental and eye exams*
  • 20% off professional and technical services
  • 50% off closing costs for home loans, and more…

*Unless insurance applies.

And here, for the record, is the Panamanian law (in Spanish) and an English translation from Don Winner’s Panama Guide: Pensionado & Jubilado Discounts (Translation of Panamanian Law)

So how does it work in practice?

Yes, you do get a minor discount on energy and phone bills.

Prescriptions: yes, you do get 10%-20% off.  Generally at Rey’s it is 20%.  Locally with some items where there isn’t even a 10% markup, you might not get anything off.  And since medicine costs about the same in Panama as in the States, 20% off is a good deal.

25% off airline tickets – right!  You may save a few bucks, but not 25%. for 15 years we had travel agencies, and as a travel agent I could get 50% off.  Good deal?  No!  Airlines have scores of fares.  The 50% off was off the “Y” fare which I don’t think anyone has actually flown on since deregulation.  It was always cheaper just to buy a regular fare excursion ticket that anyone could purchase.

Doctors and hospitals usually tell you “the discount is already figured in”.  Whether it is, or isn’t, you’ll never know.

I’ve never tried the entertainment.

Hotels like the airlines have more rates than you can shake a stick at, and there are lots of ways around this for the hotel.  My gringo friends who’ve been here a long time and who are fluent in Spanish say the way is to go ahead and book it at the lowest fare you can get and then show up at the hotel and demand the discount off the fare quoted, if necessary pulling out a copy of the law in Spanish.

Restaurants is where it really gets dicey and downright awkward.  If you know the restaurant owner do you ask for a Pensionado discount, or do you assume that the owner, being a friend, would give it to you without asking . . . or just assume you want to pay full tariff?   A lot of gringos will judge the restaurant, look at the prices (to see if the discount has already been factored into an inflated price), or if it’s really a local place struggling to survive, just pay the check and forget the discount.

I used to like an Italian restaurant up on the loop road above Boquete.  The food was good, the restaurant was cute, and the folks were nice.  The prices, originally, were high, but the rest was good.  When this gal up the price of a Hawaiana pizza (which in Panama city with the discount was $5) to $21, I decided it was time to pull out my Pensionado card and she gave me the attitude that I was taking food out of her kids’ mouths.  She gave me the discount,  and I gave it all back to her in a tip and have never gone back.

Today we went to a new restaurant that’s opened since I left for months ago for the ship.  Rustic, Panamanian, on the way to David, called, maybe appropriately “Ruins”.   Like many of the restaurants in town that haven’t closed since I left,  this one has a new owner.  Young guy from New York who was working in a deli on Madison Avenue when he was sixteen.  I’d heard they had great fish and chips.  And they were!  Pricey, but good.  $8 for fish ‘n chips is about what I’d pay for the same lunch in Ventura, California, little place on Seaward.  Understand in Boquete $3.50 maybe even, stretching it $5, is what you pay for a good lunch of fried chicken, rice, beans, and salad.   So the food was good, greasy, but hey . . . fish ‘n chips are greasy.   The food came out quickly and . . . a first for Panama . . . both of our lunches arrived at the same time!  One downside: they tried to pass off Coke Zero (foul stuff!) as Diet Coke.   So the check came with, get this, a 10% tip added in for really mediocre service.    At $8 I figured the Pensionado discount had already been factored into the inflated price, so I asked for the discount.   Sure, it’s the law, but . . . like a lot of restaurants in Boquete . . . no discount.

I realize it’s a tough call for a restaurant.  Obey the law, or don’t.  Hmmm.  Wonder how that applies to health codes?  I would think part of your business plan would be to consider your potential clientelle, and knowing you might have a lot of retired gringos wanting to use the Pensionado discount, price accordingly, which is what I thought the fish guy had done.  Is that fair to your other customers?  Are you pricing them out?  Maybe.  So to me the obvious solution is to issue a Frequent Dinner club card that get’s punched for every dinner and the fourth or fifth one is free, but, like all these offers, the offer is “not combinable with any other discount.”   So the Pensionados get their discount, and the others get their cards punched which keeps it all even, legal, and builds repeat business.

Bottom line: retiring to Panama isn’t about the Pensionado discounts.  There are lots of other, really good reasons to think about retiring in Panama.

20 thoughts on “Panama’s Pensionado Program

  1. Hi Richard,
    We give the pensionado discount when asked to. I can have 50 testimonies to that fact in a matter of a week or less. We try very hard to please all of our customers and at times coke has diet coke or coke zero, thats just the way it is and we just deal with it. We do not try to “pass off” anything and inferring that is saying something about us that simply does not exist. Our service is known all over the area as the very best. The 10% goes only to the girls and it is there only to protect them. its 10%…only 10% and if one does not wish to pay it, they simply just have to tell us. You say the you understand $3.50 possibly $5.00 in Boquete but you simply are not seeing all the costs involved in running a business in Panama. No one complains about the price and most people have enough with the large portion to bring some home for another delightful meal. Most see it as 2 meals for the price. Also, When one uses the freshest ingredients of the highest quality, one pays prices comparative to the prices in the USA. There are also many other costs involved that I wont go into here. Running a busy restaurant like Las Ruinas is not easy and I assure you that our prices are very fair and we do give the discount to those that ask.

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  2. You know sometimes I don’t even show my card because I feel that maybe the people need a break..Like a cab driver or a mom and pop restaurant…
    I do enjoy the hotel discounts and the airlines…I puposely travel in the middle of the week.
    When you expect too much..look around and see where you are living and what the people have and thank God that you are not living back in the US.

    Henry

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  3. Hey, the real problem for most working class Americans in places like Panama is that the pensionado visa requirement to have $1000 plus $250 per dependent income monthly can still be quite hard to meet on a Social Security budget.

    BTW, I visited Boquete 2 years ago with my teen age daughter, and it is a beautiful but kind of slow sort of place. We had a good time there! However, I’m getting only SS for my retirement ahead and I can’t get myself a pensionado visa with my wife and daughter to Panama even if I were to wait till I was 70 to retire. That’s the problem about everywhere for us and many other older Americans in retiring outside the US…. these damn visas of any type.

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  4. If married people both receive Social Security, their checks will be combined for Pensionado purposes.

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  5. One of the pensionado benefits not mentioned is the right to import a car every two years and have the import tax exonerated. WHAT A JOKE!!!!!!!!!!!!!!! I used that benefit four years ago, and must now unexpectedly return to the States. To legalize the car’s status, one must hire a customs broker (and yes, I had a good one). The broker works with Aduana to determine the value of the car, after which the appropriate tax rate is applied. In the past, the value of the car was the depreciated value, so one could expect to pay only a portion of the exonerated tax. Unfortunately, the Panamanian deputados have abused this tax exoneration privilege. Consequently, now a penalty surcharge is applied, and of course, now the current tax rate is higher I had to pay more this week, than I would have paid four years ago. DO NOT, repeat DO NOT, use this idiotic “benefit”. What a lie.

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  6. Generally I do not read article on blogs, but I wish to say that this write-up very compelled me to take
    a look at and do so! Your writing style has been amazed me.

    Thank you, quite nice article.

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  7. I am going to be visiting panama for a possible move in February. Richard – though I appreciate many things you write about my feeling is that you are not very happy living in Panama. I’ve read your book and i read your blog and much of it is very negative. So why live there? Is that why you cruise so often – to escape? It makes me wonder about my own plans.

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  8. You mentioned there are plenty of other reasons for living in Panama besides the pensionado program. What are some of them?

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  9. I have been to Panama twice in the lat year and a half, and absolutely love it and plan to retire there in a year, Bocas del Toro. Should I start working on getting my pensionada now

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  10. Biggest reason I don’t move to Panama tomorrow is knowing what is BS and what is real. The fraud factors. Preferred areas are David and Boquete. And if someone puts a good lunch in front of me for $5, I will not be bothering them with a pensionado card. I might have issues getting pensionado visa though, I have only about $1100 a month pension stream but enough NAV I no longer need to work at all. My investment income is far larger. But putting $300k into an investment earning decent interest in a reputable bank or real estate isn’t a big issue.

    So off to Panama for a second longer visit. Only hold back is finding reputable services not out to rip you off.

    I appreciated this realistic and contrite article.

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  11. It might be tricky to find reputable services in Panama, but it’s IMPOSSIBLE to do so in the US. I’m so sick of living in a culture of lies that I can’t wait to retire and get out of this country, not to mention that if I stay, I will need to die by the age of 71.

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  12. Deborah, I hear you. And I have the same problems in Canada, a negative value and failing economy of debt, corruption ands dysfunction. Its why I learned to invest for myself some 25+ years ago and did everything I could to get pension moneys in my name, in my account and in my control. Friends that counted on government or banks or advisors, all fell behind and were screwed.

    I am retired early, no need to work for government taxes. But Panama while the hype is big, comes short on reliable avenues to relocate. And for those juicy government backed canal bonds, I can’t seem to get a direct accredited line on how to buy them. I tried HSBC but unless you have a billion or two with them, they are not interested.

    Until the reality catches up with the hype I am not moving. But going to visit often….want to get up to David on my next trip. Finding reliable methods of getting a pensionado visa and banking access is the hold up.

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  13. I for one am happy Richard provides a “mixed message.” There is so much positive commentary by those who stand to profit from it I like having commentary on the negativep

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  14. I am so confused??? I just happened across this blog and I was really shocked to hear that the pensionada program is NOT what I thought it to be. I have been dreaming about relocating to Panama and primarily because of all the positive things I have read via Kathleen Pedicore’s (excuse misspelled last name) newsletters. This is the first time I have read that the Pesionada program may not be all that Kathleen taut it to be. I’m sure you know about the expensive seminars she regularly holds around the country, and even in some of the Latin American countries. I have planned on going to at least one of them, but now I am not sure whether I would be wasting my money. Do you think it is best that I just visit Panama and see for myself what it is like, then schedule one of the these seminars with Kathleen afterwards if I am still interested? After all, she brings in all the experts—in banking, attorneys, relocation, currency, language, those that actually live or who have lived there, etc., etc., etc…. Supposedly, she introduces you to all of the experts who can answer all the questions you have about relocating…what do you think???

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  15. I just finished reading your book after a recent trip to Panama. We stayed in Panama City for two night. Not for us, not even close. Then we stayed in Bijao Beach, too hot and humid. We were supposed to stay in Boquete for the last four nights. When I searched resorts near Boquete Isle Palenque popped up. The resort was nice but not very handicapped accessible.( I need handrails) so we never made it to Boquete. On our next trip that will be the only place we are staying. I thought the pensionado program seemed to good to be true.At one point while reading your book I felt excited to read the good, bad and the ugly. I went from saying yes we’ll give it a try to absolutely going back to drawing board and back again.
    Signed,
    Can’t Wait for Retirement

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  16. It is worth mentioning that the 25% discount comes directly out of the restaurant owner’s pocket, generally canceling any profit, unless the restaurant has raised prices to cushion the blow. Also, the restaurant receives no tax benefit or credit. None.

    When I co-owned a restaurant in Panama, we did not jack up our prices and we always followed the law, giving the discount when asked to. Luckily for us, most of our clients did not request the discount in support of our hard work, fair prices, good portions and service. If the majority had asked for the discount, it would have put us out of business, fast.

    So, Lizzy, just to make sure that I understand … you did not come to Panama anticipating any Pensionado discounts, and you have never used them in restaurants, hotels, airlines, electric bills, medicine, doctors … nothing. Is that correct? What irks me is when I see expats who came to Panama believing the Pensionado discount hype, and who use the discounts, but when it comes to running THEIR restaurant, think that others who use the discounts on them, are taking advantage. But since you haven’t and don’t use the discounts, OK. I think it’s a dumb system! If I had a restaurant I’d follow the law, give the discount, but I’d also have a Loyal Customer card where when you got a certain number of punches you’d get a FREE meal, of course “could not be used in combination with any other discount.” That would reward your customers and keep the Pensionado discount folks happy! Regards, Richard

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  17. Lizzy, I don’t go to Panama for discounts like these. Only take them if they are offered. If I could, I would convince my wife and move to Panama in a heart beat. Canada suck for retirement. If I lived there I might for more expensive stuff, but if a restaurant is serving me a great meal at a cost less than Canada (not hard to do) I never nickel them.

    But admit, the law should exempt restaurants from these discounts.

    Just wish it was easier to convince my lovely wife to move there and easier to get visa to move there. Lots of hype, and can be done but its all about money and illusions. Sad too that our city as of this year no longer has direct flights to Panama, just kicks up the costs. We so much liked our Panama visits…..

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  18. I ordered International Living’s Panama Insider Membership but cannot access it! Is any one else having this issue? “Help!”

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