The World’s Top Retirement Haven

Panama Is #1…But It’s Not Always Best

We say (and we believe we’re right, based on long experience with this stuff) that Panama remains the world’s top retirement haven. That is, in this New Year 2012, Panama is the best place to think about living or retiring overseas…as it has been for the past half-dozen years at least.

However, that is not to say that Panama is the world’s best place for all things for all people. For example:

Ecuador is cheaper.

Speaking in round numbers, it’ll cost a retired couple US$2,000 per month, including rent, to live comfortably in Panama City or about US$1,100 a month, again, including rent, to live in Las Tablas (our preferred budget destination in this country).

Meantime, a retired couple could enjoy life in some parts of Ecuador on as little as, say, US$750 a month, including rent.

Also cheaper are a number of interesting, exotic choices in Asia, including the Philippines, some parts of Thailand, some parts of Malaysia, Vietnam, and China (all places we’d say are worth a look…depending what you’re looking for).

Panama is best overall, but the weather is better in Medellin, Colombia. Certainly better than in Panama City but better, too, I’d say, in Medellin than in Boquete, which is Panama’s top good-weather choice. Boquete can be drizzly, windy, and chilly.

The cost of real estate, considered on a per-square-meter basis (which is the only way to consider it when trying to draw meaningful comparisons) is lower in Medellin than in Panama City. As much as 50% lower. Property values in Medellin right now remind me of those in Panama City a dozen years ago when Lief and I first began recommending the Panamanian capital for investment.

Values in Panama City bubbled through 2008, when they settled. But they did not, have not burst, and, right now, they stand at about US$1,700 to US$2,200 per square meter (down from US$2,000 to US$3,000 per square meter 36 months ago). In Medellin you can buy in El Poblado, the best address in the city, for as little as US$1,000 per square meter (resale). In less central, more local neighborhoods, you can buy for less.

We rank Panama #1 generally, but Puerto Vallarta boasts a more developed infrastructure.

In Puerto Vallarta, you aren’t buying for someday. In Puerto Vallarta, the would-be retiree can buy into a world-class lifestyle in a region with world-class beaches and ocean views that is supported, right now, by world-class golf courses (seven of them), marinas (three of these), restaurants (dozens), and shopping. The comfortable Pacific beach lifestyle you find today in Puerto Vallarta is available only on a limited basis worldwide. It is a lifestyle that is truly (not metaphorically) comparable to the best you could enjoy in southern California (if you could afford it).

The Pacific coast lifestyle is more fully appointed in Puerto Vallarta than it is anywhere on Panama’s Pacific coast…and the Caribbean coast lifestyle is better appointed on Ambergris Caye, Belize, and Roatan, Honduras, than it is anywhere on Panama’s Caribbean coast.

Most of the comparative analysis I’m offering here is subjective on some level. This last point is nothing but bias. I don’t care for Panama’s Caribbean choices. Bocas del Toro, Panama’s most developed Caribbean option, has big infrastructure problems and bigger land title problems. And I can’t imagine most people would be happy living full-time in Colon, Panama’s less developed Caribbean choice.

But both those statements are my opinion. Some people love Bocas, and we know a handful of expats who’ve chosen Colon…and who aren’t complaining.

Panama City is the only real city in Central America, but it’s nothing compared with Buenos Aires, Argentina. That is, B.A. is a far more cosmopolitan choice if you’re looking for the best of city life.

In Belize, they speak English. It’s the official language. Many in Panama City speak English, too, as a second language, but elsewhere in Panama, you’re going to have to learn at least some Spanish, or you’re going to find life very challenging indeed.

Uruguay is probably a safer option than Panama. I’d say Uruguay is one of the safest lifestyle choices in the world. Of course, some might translate “safe” as “dull.” Not much happens in Uruguay. That can be a plus…or a minus…depending on your point of view.

And, while Panama remains the world’s top retirement haven, the overall quality of life is far superior in France. Again, my bias is showing. For me, nowhere on earth does the standard of living compete with that available in France. But, while life in France can be more affordable than you might think, this country doesn’t qualify as a budget choice.

And few places on earth are as unappealing as France from the perspective of the tax-payer and the entrepreneur.

On these fronts, Panama is tops, without peer. Specifically, Panama is the best place in the world today to launch or operate an international or Internet business, and its approach to taxation is as good as it gets for the foreign resident. It’s possible to live here, possible even to live and operate a business here, and pay zero local tax.

Kathleen Peddicord

P.S. This last point reminds me of an e-mail we received from a reader a few weeks ago. The reader was calling us out on this point, claiming that Panama is not only not the best place in the world to operate a business, but that it’s not even possible for a foreigner to run a business in this country. She referenced her son’s recent short-lived and disastrous experience as a Panama restaurateur.

We should stop misleading readers, she urged.

We clarified for her (as we do for you every time we make the point) that, when we say Panama is the best place in the world to run a business, we’re not talking retail. Retail in this country is restricted, and, right, there are a number of local, for-the-Panama-market businesses that a foreigner is prohibited from owning. A restaurant, by the way, however, is not one of them.