“Kathleen, I turned 60 in August, and my wife turns 61 next month. I receive a disability check for US$1,294 per month, and my wife starts drawing a check for US$1,308 in January. Would this allow us to qualify for the pensionado program in Panama?
“My wife received an inheritance of close to US$100,000. I visited Volcan and Boquete back in May. Based on that visit, we feel we want to move there for the next phase of our lives. I have been studying raising chickens and vegetables and want to buy about 1 hectare of land in that area. Volcan is probably cheaper than Boquete.
“Now for my question. Could you put me in touch with someone you know who may be able to search out a property on which we could build a house or could someone you know help us find a rental property in the area so we can make this move as soon as possible. We are having to dip into this retirement account for living costs while in the United States.
“Now for the big question. How can we move our money out of the United States and into Panama without losing 30% to the U.S. government? We obtained the funds legally, as I said, through an inheritance.
“Any advice you can give me will be greatly appreciated.”
–Roy B., United States
First, yes, the amount of retirement income you and your wife are receiving qualifies you easily for Panama’s pensionado program.
Second, the best way to find the best deal on a piece of land in Volcan would be on the ground in Volcan. That is a small market, where many sales, including all those by Panamanian sellers, are going to happen word-of-mouth. You are correct to conclude, by the way, that land around Volcan (except perhaps in the Cerro Punta area) should be less expensive than anything in or near to Boquete.
As for moving your money to Panama, wire it before the end of this year, and the potential 30% withholding isn’t an issue. After Dec. 31, money wired out of United States will be subject to the 30% withholding. Remember, though, that this is a withholding, not an actual tax, and that it will come into play only if the money is wired to a non-compliant bank.
I suspect that all banks in Panama will be compliant with the FATCA rules, considering that Panama operates in the U.S. dollar and that being non-compliant would mean that none of the bank’s customers would be able to receive funds from the United States without triggering the 30% withholding.
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