Panama Feature

Panama gets high marks as the Western Hemisphere's up-and-coming retirement destination. The magazine International Living—many regard it as the bible in the field—cites several advantages to living here, and once AARP, the Magazine chimed in a 2010 issue, the rest was history. Moderate cost of living, ease of owning real estate for foreigners, quality health-care facilities in the hub cities of Panama City and David, decent in-country transportation and communication, and proximity to the United States draw thousands of Americans, who make up the majority of foreigners who retire to Panama.

The expat population congregates mostly in four enclaves around Panama. The former Canal Zone came ready-made with U.S.-style housing and amenities and a California or Florida look and feel when Panama took over the canal in 1999. In the northwest, Bocas del Toro is Panama's version of slow-paced Caribbean-island life. Central Panama's El Valle de Antón and Chiriquí province's Boquete offer higher-elevation respites from the lowland heat. The latter, in particular, is growing at an astonishing pace. Each is rich in opportunities for foreigners to meet up for events or volunteer work.

Retirement and relocation give you three status options to look into:

Pensioner. Most popular for foreigners is the pensionado route. You need a guaranteed monthly income from a pension, public or private, of at least $1,000. You are allowed a one-time duty-free import of your household goods up $10,000 as well as the tax-free purchase of a car every two years. In addition, various Panamanian businesses and institutions offer you a wide variety of discounts.

Investor. As an inversionista, you incorporate a business under Panamanian law and provide full-time employment to at least five citizens. (Household employees do not count.)

Person of Means. To qualify for solvencia económica propia, you must deposit at least $300,000 in a fixed-term account in a Panamanian bank for at least three years.

Note that none of these options permits you to work, and all require a clean police record. A good attorney here can help navigate the bureaucracy.

Don't fall prey to "Sunshine Syndrome." Pause and take a deep breath if you find yourself uttering the words "Honey, we met that nice real estate agent in the hotel bar. Let's buy a house." Some succumb and move to Panama, only to find that living here bears scant resemblance to vacationing here. Experts suggest a trial run. Rent a house or apartment for a few months and see if day-to-day life in Panama agrees with you.