As numerous Americans experience exhaustion from U.S. Hustle culture and the expense of daily life, expatriates are discovering Panama offers a remedy for their long-desired retirement.
TL;DR
- Alan Wells, 73, retired to Boquete, Panama, finding a lower cost of living.
- His monthly expenses in Panama are $500, excluding food, significantly less than in the U.S.
- Wells travels between Panama and Louisville, Kentucky, spending most of the year in Panama.
- He advises potential expatriates to take sample trips before making a permanent move.
At 73, Alan Wells is one of many Americans seeking a more straightforward and less expensive retirement outside the U.S.
Having been retired for 14 years, Wells established his permanent home in Boquete, Panama, in 2015. The following year, he acquired a property he characterized as a modest 900-square-foot dwelling in an area situated roughly 30 miles from The Costa Rican frontier. Following its acquisition for approximately $100,000, he promptly expanded the residence to encompass about 2,000 square feet.
“It’s probably worth a couple of hundred thousand dollars today,” he said.
Wells discussed his views with Coins2Day regarding his international relocation, a topic many retirees are considering.
Why make the move?
Before relocating to Panama, Wells, who was raised in Cincinnati, Ohio, had no prior international travel experience, yet he described his time there as magical.
His daughters' weddings in Panama exposed him to the community, and after encountering a widow at one of the receptions, Wells started contemplating a relocation to Central America as an unmarried retiree.
“They [my daughters] decided they preferred the U.S. To Panama; I decided I prefer Panama to the U.S. So we switched,” Wells said. “I tell them, ‘Thank you for your welfare contributions to my Social Security fund so that I can live down there.’”
Wells dedicated the majority of his career to Memphis, Tennessee, working at FedEx. Following his relocation to Panama, Wells would only spend one week annually in Louisville, Kentucky.
Life's shifts, like COVID and grandchildren, prompted him to become a snowbird. He now travels between Louisville and Boquete twice annually, residing in Panama for six to nine months each year.
Courtesy of Alan Wells
Is it possible to spend more in Panama than in the U.S.?
The cost varies depending on the specific region of the U.S., he explained. In terms of expenses, Panama isn't significantly more costly than Louisville. However, he noted that living in a larger metropolitan area, like Miami or Los Angeles, would present a different financial picture.
Louisville's housing costs are around 20% cheaper than the U.S. The norm, with the median household allocating $61,334 annually and approximately $1,784 monthly for housing. In contrast, Los Angeles presents a cost of living that's approximately 49% above the national benchmark.
Wells mentioned that some acquaintances relocated to Panama from L.A. Due to escalating living costs, and a current resident “very nicely.”
“I can afford a great deal more in Panama than I can in the U.S., but I do maintain residences in both countries,” he explained, adding that, “$500 is my cost of living, plus food, in Panama.”
His remaining expenditures in Panama are detailed below:
Home insurance: $300 per year
Car: $250 per year
Electric bill: $40 a month
Trash and water: $11 a month
Internet: $70 a month (includes cable)
A significant aspect of his expenditures in Panama is that Wells doesn't incur costs for heating or air conditioning, as “the climate is perfect.”
His expenses in the U.S. Are three to four times greater. Each year, he spends approximately $1,000 on homeowners insurance, $1,500 on property taxes, and around $1,000 for car insurance.
The permanent residency process took how much time?
Wells stated the entire procedure lasted approximately seven to eight months, encompassing all necessary paperwork, background investigations, income confirmations, and travel to Panama City for the concluding governmental meetings.
Especially for those retiring, recent shifts in visa rules, tax policies, and local costs mean the process is more complex than you’d think, experts say.
Wells stated that to obtain residency in Panama, one must prove a monthly income of at least $1,000. His earnings are divided equally among Social Security benefits, investment profits, and mandatory IRA withdrawals.
What were your days like when you relocated versus how they are presently?
During his initial years in Panama, Wells dedicated much of his time to exploring the nation's mountains. Currently, he frequents the gym and manages his IT responsibilities, connecting computer systems from Kentucky to Panama.
The culture in Panama reminds him of his Southern lifestyle back home.
“Panama’s the size of Tennessee, so in the first few years you travel a lot there’s a lot to see,” he said. “It’s a very small, very narrow country, but you go from plains to mountains to coastline, it’s awesome.”
In fact, he can reach the Pacific Ocean in about an hour and the Caribbean in about three.
What steps can you take to get ready for language differences and medical attention?
Wells stated that medical care is inexpensive and adequate for specific needs, but “good and cheap is not really a thing.”
“If something serious happened, my kids would put me on an airplane and take me back to the States,” he added.
Wells expressed his disappointment that his Spanish proficiency hasn't reached his desired level, but “any educated Panamanian learns English as a mandatory second language, and most adults I meet speak some English.”
To retire successfully or relocate abroad, one must engage in meticulous planning, comprehensive investigation, and adaptable strategies to manage changing financial, legal, and lifestyle hurdles. Wells suggests: “Don’t jump in. You really want to take a couple of sample trips before you make any decisions.”
“People come down here, take a tour, buy a house, and then realize they’re 4,200 feet up a mountain and freezing every night,” he said.
“We stayed in a little casita just to see how things were and to look around at the real estate to find something we could actually live in.”