Learning to shop in a Chinese store in Panama
Learning to shop in a Chinese store in Panama

This is probably the most asked question by people considering relocating to Panama especially since most “Boomers” and potential retirees have seen the value of the home equity plummet or become non-existent and the value of their retirement investments largely tank.  Eleven years ago when we moved to Panama it was a whole lot cheaper than living in Southern California!  And it still is.  Prices have gone up for everything in Panama for several reasons: the high cost of oil and fuel, and much of our stuff is imported, the devaluation of the US dollar which is the currency used in Panama, and the boom-time economy of Panama.  But prices have soared in the US as well.  I still figure our cost of living to be about 1/3 of what it would be in Southern California, and we live a whole lot better in Boquete.  But, at the time we moved here we could have lived for a lot less than Southern California, and even less than in Panama, had we moved to Altoona, Pennsylvania where my Dad was living.  So then, as now, a lot depends on to what you are comparing.

A lot of the information you find on-line is outdated and unfortunately a lot doesn’t easily show the date when the information was originally posted.  The reason to consider moving to Panama is not because it’s cheap, but because you find the lifestyle appealing.  The fact that it is more affordable for most people is just a plus.

$4.75 breakfast at Central Park
$5.75 breakfast at Central Park

Every expat who lives in Panama or is considering relocating here should follow Don Winner’s Panama-Guide.  And he’s just published what he calls a “snapshot” of cost of living in Panama since obviously it changes here as elsewhere in the world almost weekly as prices rise and fall.  He asked his many readers living as expats around Panama to contribute and the results are very interesting.

Here is what he asked for . . . and you’d think sometimes Don was being paid by the word to write for Panama-Guide, but actually he owns the site.  The problem, and I know it well, is you get going on something about which you are passionate and the words just keep flowing.

Here’s what he got . . .

Living The High Life In Cerro Azul: A 61 year old male lives alone in Cerro Azul, located about 40 minutes by car outside of Panama City. He bought his house for $135,000 dollars by putting down $35,000 in cash, and he financed the balance for 13 years at $900 per month. He also dropped another $50,000 into the house to fix it up. He only pays $150 per month on electricity because there’s no need for air conditioning in Cerro Azul. Monthly water bill is $30 bucks, cable television is $55, Internet access $15 per month (via Digicel USB modem), monthly cell phone usage is $25 dollars (calls only, no data.) Budgets $400 per month for food, eating out, and cleaning items. Fuel for the car is $200 per month. There’s a $20 per month Home Owners Association fee in Cerro Azul which pays for road upkeep and maintenance. Car insurance is $100 per month on a ten-year old car, bought in cash for $10,000. Travel plans – two trips per year at $600 per ticket, $1,200 annual, or $100 per month. That puts him at a total of $1,995 per month living expenses. Plus, he has a total of $95,000 invested in the purchase of the house, remodeling the house, and purchase of the car. So the bottom line is – A single man lives alone in Cerro Azul for $1,995 per month.

A Retired Couple in Altos del Maria: Lloyd and Linda Sherman live full-time in Altos del Maria. They return to the US about once a year. They are renting a house for $900 per month. They purchased insurance on the contents of their home for $45 per year (or $3.75 per month). They budget $600 per month for groceries which includes regular trips to Price Smart for large package items and cleaning supplies, and they spend an additional $300 per month or so eating out. Their utilities are $65 per month for electricity, $8.50 per month for water, $76 per month for cable TV (including movie channels), $80 per month for Internet access, $6.99 per month for Skype with unlimited calls to the US, $15 per month for cell phone on prepaid cards. Domestic help $110 per month for part-time maid and gardener. Also, $15 per month for propane for cooking and hot water. They own two cars, purchased in cash for $10,800 total. They spend a total of $240 per month on fuel, $26 per month for insurance on both vehicles, and have a budget of $200 per month for repairs and maintenance on the vehicles for parts and fixes. Other: $80 per month for mail services, $125 per month for health insurance. They have budgeted $3,000 per year or $250 per month for international travel. Added all together, their monthly expenditures are about $3,112 per month or $1,556 per person. So, the bottom line is – A retired couple lives in Altos del Maria for $1,556 per person, per month.

A Family of Three in Gamboa: An American man, his Colombian wife, and their school aged daughter live in Gamboa, next to the Panama Canal where the Chagres river enters Gatun Lake. They rent their house for $750 per month, which includes all of their utilities – gas, electricity, water, Internet, air conditioning, satellite television, a gardener, garbage pick-up three times a week, and no maintenance fees. Their daughter attends a public school, and they were surprised and impressed with the school (free). They bought a car and paid about $6,100 total for the purchase and needed repairs. As for monthly costs, $80 for fuel for the car, $400 for food, $300 for restaurants and eating out, $75 for cell phone service, $138 per month for car insurance, and $200 per month for fuel for the boat (fishing) and $40 for bait. Add $25 per month for the wife’s hair and nails, $5 per month for dad’s haircut, a budget of $50 per month for clothes for their daughter, and $35 per month for prescription medicines. That brings the monthly total to $2,058 for a family of three. So, the bottom line is – A family of three lives in Gamboa for $686 per person, per month.

Swinging Single in Las Tablas: A 65 year old retired American male lives in Las Tablas, in the Azuero region of Panama. He’s been coming to Panama since 2001 but has been living here full-time for the past seven years and has not been back to the United States. He rents a single family house (stand alone) in a respectable neighborhood for $225 per month. His utilities are $32 per month for electricity and $7.50 per month for water. He spends $400 per month on groceries and cleaning supplies, and spends about $45 per month eating out at restaurants. He spends another $30 per month on beer and cigarettes. For telecommunications, he pays $11 per month for data on his Blackberry cell phone, and an additional $15 per month on cell phone cards. He owns a scooter for local transportation and spends about $5 per month on gas (with no insurance). Finally, he spends about $20 per month for buses or taxis. His greatest expense is on prescription medicines at $300 per month. So the bottom line is – his costs for necessities is about $1,070 per month. But here’s the kicker. He gets a check for about $2,500 per month and he blows the rest on “girlfriends and casinos.” He spends all of his income, but he could get by for less if he either had to or wanted to. So, the bottom line is – A single man lives in Las Tablas for $1,070 per month.

A Family of Three in Pedasi: This family, a 51 year old retired law enforcement officer, his 45 year old wife, and their 12 year old son, moved to Pedasi in Los Santos after selling all of their belongings in the United States. They moved to Panama and rented for the first five months, but now they have purchased their home and they have been in there for seven months, and live in Panama full-time. They bought the house cash for $125,000 and there are no HOA or other scheduled maintenance fees. They pay $15 per month for homeowner’s fire insurance on the house. They budget $750 per month for food and household supplies, and another $150 per month for restaurants and dining out. Monthly utilities are $150 for electricity, $8 for water, $40 for Internet (via Claro USB stick and router), $8 for cell phone. They don’t have cable TV or a landline telephone. They bought a used car for $12,000 cash. Fuel costs are $180 per month, pay $58 per month for maintenance, and $62 per month for insurance. They rarely use public transportation. School for their son is done with a home schooling plan through the Internet at $166 per month. Their costs are a little elevated right now because their son needs braces – which will cost them $105 per month over the next two years. So, the invested $125,000 for the house plus $12,000 for the car, or a total of $137,000 going in. Total monthly expenses are $1,669 for three people. So, the bottom line is – A family of three lives in Pedasi for $556 per person, per month.

A Retireed Couple Living in Boquete: An American couple in their 70’s purchased a two bedroom ground floor condominium in a gated community in Boquete, in the Chiriqui province of Panama. They paid $240,000 cash about two years ago. Their Home Owner’s Association fees are $2,114 for the year or $176 per month, which covers security, external maintenance, and landscaping of the common areas. They pays an additional $18 per month for fire insurance. Utilities are $100 per month for electricity (no air conditioning necessary at altitude), about $5.80 per month on gas for cooking on a range top and oven. Water is $4.50 per month, local service. Legal fees for a Panamanian corporation $29 per month. Real estate tax is $2.50 per month. They have one bill for $100 per month with Cable Onda for cable television, local telephone, and Internet service. They spend about $105 per month on maid service and a gardener. Health insurance is $350 per month because they are over 70 years of age and have large deductibles – this is for catastrophic medical problems only. For transportation, they bought a new SUV from the dealer in David, paying cash. Car insurance is $83 per month, full coverage. Estimated monthly food costs: $600. The up front investment for large ticket purchases was about $270,000 for the house and car. Their total monthly expenses are $1,573 per month, for two people. So, the bottom line is – A retired couple lives in Boquete for $786 per person, per month.

A Family of Five in Panama City: A family of five – an adult man and wife, two grown children, and one small child all live together in an apartment in Panama City. They purchased the home with $11,000 down, financed the rest, and have invested about $50,000 in upgrades and improvements to the property. The monthly mortgage is $640 and the condo maintenance fees are $150 per month. Utilities are $290 per month for electricity, $300 per month for Cable Onda which includes full cable TV for four digital boxes, two local telephone numbers, and high-speed Internet access. The monthly water bill is $40 per month, which also includes garbage collection. Cell phone is $150 per month, broken down as one phone on a monthly plan, and several others using prepaid cards. School and education expenses are $200 per month for a private school. The two older kids are done with school. Food costs are $600 per month for groceries and household supplies, plus another $400 per month for restaurants and dining out. There is one car payment of $260 per month for a new car. Fuel expenses are $100 per month total. Another $100 per month budgeted for repairs and maintenance as needed. And another $120 per month for insurance. There was a total of $61,000 invested up front to make the move to Panama. These monthly expenses come to $3,350 per month. So, the bottom line is – A family of five lives in Panama City for $670 per person, per month.

Retiree Has High “Burn Rate” in Panama City: A 70-year-old single American male has been living in Panama full-time since 2000. A full-time girlfriend lives with him, so these monthly expenses are for two people. He bought a new SUV in 2004 for $30,000 in cash. He bought a nice 280 square meter oceanfront condo in 2005 for $270,000 cash. He spends $4,000 per year ($333 per month) for major medical insurance. He reports spending $1,500 per month on “groceries and booze” and another $650 per month on “restaurants and fun.” He lists another $500 per month for “stuff.” His monthly condo fee is $370 per month for operations and maintenance for the building, as well as security, common water, gas, and garbage collection. For utilities he spends $120 per month on electricity, $130 per month for cable television and Internet, and $330 per month for two cell phones. So the total comes to $3,933 per month for two people, or $1,966 per person. There was a total upfront investment in cash of $300,000 dollars to buy the condo and his vehicle. So, the bottom line is – A retired man and his girlfriend live in downtown Panama City for $1,966 per person, per month.

Living On A Farm in Boquete: A single American man lives on his farm in Boquete. He has a live-in girlfriend who spends a lot of time with him, especially on weekends, so these expenses are for two people. He bought a working (income producing) four acre coffee and citrus farm upfront for $350,000 in cash, and he also bought a new car for $21,000 in cash. Property taxes are $150 per month. Utilities are $5.35 per month for propane gas, $40 per month for electricity, $2.50 per month for water, $8.95 per month for Netflix, $25 per month for a cellphone contract and unlimited data. He spends $200 per month for fuel, $50 per month for auto insurance, $20 per month for home insurance, $300 per month for groceries, and another $300 per month on restaurants, entertainment, and dining out. There is also a $60 per month cost for a wireless Internet connection – more expensive because of the relatively remote farm location. One half-time farm worker costs $260 per month, including Social Security payments as required by law for an employee. Other costs for $50 per month were listed as “miscellaneous”. There was an up-front investment of $371,000 to buy the farm and the car. Their total monthly expenses are only $1,471. So, the bottom line is – A retired man and his girlfriend live on a working coffee and citrus farm in Boquete for $735 per month, per person.”

A Retired Couple Living On The Beach: A 55 year old man and his 45 year old wife live in Ojo de Agua, which is near the Playa Venao on the Azuero Peninsula, Panama. They bought their house for $27,000 cash about six years ago and invested another $10,000 in cash to remodel the house while they both continued to work in the US, before they could retire. They bought a truck for $12,000 cash in 2009, and they both have been living here full-time for the past two years. They pay $56 per month for vehicle insurance, full coverage. Utilities are $40 per month for electricity, $11 for water, $55 for Skye TV, $25 for Internet through a Cable & Wireless USB connection, $30 in cell phone cards, and $60 for life insurance. They spend about $160 per month for fuel, used to drive to Las Tablas, visit friends, or to go to the different beaches in the area. They spend $200 per month on groceries and household supplies, and another $300 per month on restaurants, dining out, and “my husband’s cerveza.” They budget about $2,000 per year for international travel to visit the United States. “Give or take an ice cream here and there our living expenses for Panama is $550 a month per person. It would be more affordable if my husband would give up the Atlas and if we stopped eating at the beach everytime we go! But it is for those things that we love it here!!” I see an initial cash investment of $49,000 for the house, remodeling, and car. Their monthly expenses are just over $1,100 total. So, the bottom line is – A retired couple lives on the beach in Panama for $550 per month, per person.

A Retired Man Lives On His Social Security Check in Downtown Panama City: A retired American male has been living in Panama City for the past five years. He bought a new two bedroom condo in El Cangrejo for $150,000 dollars cash, so there’s no monthly mortgage payment. He also bought a new car for $18,500 and a motorcycle for $1,500 dollars in cash, so no monthly payments there either. His only source of income his his monthly Social Security check, so he has to “watch every dollar.” His monthly expenses are $126 in condo fees, $75 for Internet and cable television, $65 for electricity, $300 for food, $60 for gas for both the car and motorcycle, and $24 for insurance. He lists another $100 per month as “miscellaneous” monthly expenses. He said “I live very comfortably on $750 per month, and I don’t skimp.” He spends the remainder on discretionary items such as travel and partying. His total up-front cash investment was $170,000 for the apartment, car, and motorcycle. So, the bottom line is – A retired man lives alone in his apartment in Panama City for $750 per month.

Off The Grid in Bocas del Toro: A retired husband and wife live on an island in the Bocas del Toro archipelago in the Republic of Panama. They spend $100,000 to buy the property and another $150,000 to build their home. They have no monthly utility bills because they live “off grid” using solar electricity and a rainwater catchment system. They report regular monthly expenses of $100 month for transportation (truck and boat); fuel and maintenance; $450 month food costs (groceries, beer, wine & eating out); $150 month for yard, agricultural work; $100 month lawyer fees for “typical Bocas stuff”, and $20 month for propane. They had an initial up front investment of $250,000 for the property and to build the house. Their total monthly expenses are $820 per month. So, the bottom line is – A retired couple lives on an island in Bocas del Toro for $410 per person, per month.

A Family of Five in Veracruz: A young working couple and their three kids live in a house they bought in Veracruz, located just outside of Panama City. They paid $23,000 or 10% down to buy the house, and then spent an additional $60,000 on repairs, remodeling, and upgrades. They spent $24,000 cash to buy two cars, one of which is paid off and there’s still a loan on the other one. Their monthly expenses are $1,600 for the mortgage, $257 for life insurance (related to the mortgage), $90 for fire/flood/content insurance as required for mortgage, real estate taxes $165. Monthly car payment $330 which includes insurance. Insurance on the second car is $100 per month. Diesel for both cars $280 per month. Health insurance is $120 for the entire family. Private schools cost $600 for three kids. Electricity is $350 per month. Garbage pick up $12 per month. Internet is $30 per month. They spend $130 per month for Satellite TV, and subscribe to two different services. Food and household supplies $1200 per month. A maid costs $200 per month, five days a week, mornings only. And a gardener is $80 per month, only one day per week, full day. They put down $107,000 to buy the house, fix it up, and buy two cars. Their total cost of living expenses are $5,544 per month. So, the bottom line is – A working couple and their three children live in Veracruz for $1,108 per person, per month.
This “snapshot” of the costs of living for a variety of folks spread out across Panama is a very valuable contribution by Don and should be helpful to anyone considering relocating to Panama.

Volcan Veggie StandThe bottom line: it just depends on YOU!!  What do you want?  When I was with the Panama Relocation Tour in Panama City we had lunch with Bob Adams who has a Web site called Retirement Wave.  Bob’s advice, and I think it’s great advice, is to first ask yourself, “What do I NEED?”  And then ask yourself, “What do I WANT?”  Some folks come down and they make the mistake of falling in love with the view, or the sound of the surf, which is what they WANT, but they don’t consider the accessibility of medical care, or supplies, or high-speed Internet or whatever, the stuff they actually NEED.