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The Cost of Living in Boquete Panama

So many people ask what is the cost of living in Boquete Panama that I decided to provide a working budget. This budget is going to be based upon two different scenarios, first someone who buys a home and second someone who rents. Each will have some variables because clearly not everyone lives the same lifestyle.

I want to make a few points going in to this discussion. First and most important that this entire post is nonsense because each person will have variations on either theme. The purpose of the exercise is to demonstrate a low and high end budget, but neither is real, because once again we all choose to live differently.

For the Home owner I am going to use myself as an example. I do not live in a subdivision so I have no Homeowners fees. I pay for water and electricity directly without markup. The expenses are for one person but in reality would not change much for one or three. except for health insurance.

Home Paid in Cash, no mortgage

Property Taxes  $200  (there might be property taxes in Panama, I have them)
Electricity            $ 40
Gas                        $  5
Water                    $  3
Cell phone           $ 25
Internet               $ 60   ( I do not have cable or Satellite TV) Add $40 minimum
Home Insurance $ 20
Food                     $300
Diesel  (car)         $200
Car insurance      $ 65 ( I have Maximum coverage)
Clothing               $100
Car                          $400   I paid cash but if I needed to take a loan this would be a guess
Health Insurance   $1000  (This is a US 100% Medical and Dental Policy good anyplace in the world.  Local options like                    MS Chiriqui would cost less and cover less.)
Entertainment         $300

Total:   $2718

Note: My biggest monthly expense is health insurance.

A rental solution using most of the same numbers but eliminating a car and those things normally included in rent.

Rent :  Range from $500 to $2000 You can spend $2000 or more if you wish. I will use $1000 for the total below.

Electricity            $ 40
Gas                      $  5
Water                  $  3
Internet               $ 60
cell phone           $ 25
Food                     $300
Clothing               $100
Health Insurance   Self Insured
Entertainment         $300
Transportation        $100 Assuming local taxi and bus expenses

Total:   $1933          Assuming no car and that rental has satellite or cable TV

Health insurance is the loaded gun for retirees in Panama. You have options, you can self insure for almost anything.  Self insurance will work out to be less expensive unless you have a catastrophic emergency and want to use a private hospital. Public hospitals are very inexpensive but unless you have a local person to be your advocate you might die before you see a doctor.

If you are a US Medicare recipient, Medicare will not help here, but you can return to US for non urgent care situations. There is a rumor floating about that Medicare will cover emergencies, according the website Medicare.gov, there are only three conditions that would be covered, none of which will apply for a resident in Panama. A tourist might be able to make a case for #3.

1. You’re in the U.S. when you have a medical emergency, and the foreign hospital is closer than the nearest U.S. hospital that can treat your illness or injury.

2. You’re traveling through Canada without unreasonable delay by the most direct route between Alaska and another state when a medical emergency occurs, and the Canadian hospital is closer than the nearest U.S. hospital that can treat your illness or injury. Medicare determines what qualifies as “without unreasonable delay” on a case-by-case basis.

3. You live in the U.S. and the foreign hospital is closer to your home than the nearest U.S. hospital that can treat your medical condition, regardless of whether it’s an emergency. Remember, in these situations, Medicare will pay only for the Medicare-covered services you get in a foreign hospital.

http://www.medicare.gov/Publications/Pubs/pdf/11037.pdf

If you have no pre-exisitng conditions you can buy far less expensive Panama only or even International health insurance policies. If you have pre-exisitng conditions you will find qualification for those policies difficult or impossible.

In my personal opinion life in Panama is not that much less expensive than life in the US. I will submit my utility bills are much lower here than they were in Arizona, but that is more a function of not needing heat nor air-conditioning, less a function of lower costs for electricity. Water and gas are an exception because water is far less expensive and propane can be government subsidized.

I do not live here because it is less expensive, I too bought into the myth, but I think you can buy a house for less in many places in the US now. I left before the bubble burst.

I live here because I like living here far more than I enjoyed life before I moved here. This is a personal decision based on my life experience and although my opinion is shared by many, it is not shared by all.

 

Comments

  1. Bjorn Sefeldt says:

    Lee , I think you assume that people will move to a retirement location different from where they live in US if not moving to Panama? locations in US will affect that outcome.
    Certainly living expences are lots higher here in Houston…electricity alone is about $400-600 / mo. for a ‘normal home’…food is also more, and if you drink at all, any liquor is more…restaurants are at least twice…..gas is a bit less..right now ‘regular’ about 3.50-3.60 /gal ..diesel a bit more ,but most cars get better mileage w diesel…BUT in Panama you drive less than around Houston.( I think)…water here is also lots more as Houston now added a surcharge for sewer too, just about doubled the water cost..and not having a rainy season , but a drought…? adds a bit…..internet just a tad higher here …food, not sure if I could get by on $300 here for myself , but a maybe… clothing? hmm…might be about same if retired…Academty has good clothes for good price….

    great to have these to compare to though….. no heatring nor cooling required is definbitely a plus though

  2. These appear to be pretty reasonable numbers, but a couple of comments;
    1. $200 per month for property tax?

    Under the rental assumption;
    1. No health care costs?
    2 .If we are comparing apples to apples, it would seem reasonable to include either car payments or rental car payments.

    Including these two costs (along with the costs for car insurance and fuel) could boost the cost of renting to as much as $3598

  3. Gordo this is not a comparison of Rental to Owning, it is showing some contrasts. Some people are self insured and many renters do not have cars. People can play with these numbers.
    The $2400 a year of property taxes is to make a point. Despite all promotion by real estate sales people there are taxes on land exceeding $30,000 in value and unless you get an exoneration on construction there are taxes on improvements. The rate can be as high as 2.1%

  4. Wayne Crawford says:

    Great article, Lee. Is Panamanian private health insurance available to ex-pat retirees? If so, is it hard to get? What do you mean by self insurance? Is it a program or just having enough cash to pay for whatever comes up?

  5. Wayne, there are several private insurance companies. Some like Bupa are international, others like ANCON and ASSA are Panama only. They all have difficult underwriting requirement which translate to if you have any prior health issues they will either say no or limit their exposure. Self insurance is paying your own way, no insurance.

  6. $ 1000.00 per month medical insurance ??

  7. Do some price shopping for International Medical insurance if you are over sixty.

  8. Wayne Crawford says:

    What is anyone else paying for health insurance? No matter where you go that’s your biggest cost? Sounds like the USA.

  9. If you look at the poll in the left column you will see most people found less expensive routes than the one I chose.

    Residents only: What type of Medical insurance do you have?

    MS Chiriqui (46%, 12 Votes) (This option is less than $100 a month)
    None, I am self insured in Panama (31%, 8 Votes)
    International Insurance like BUPA or others (23%, 6 Votes)
    Any other Panama Insurance other the MS Chiriqui (0%, 0 Votes)
    Total Voters: 26

  10. I think there are many retirement areas in the USA> It may sound exciting to retire in a foreign country. Wrong. I have lived in a third world country. The reasn it is so inexpensive, there isn’t anything to buy,,, Food. How much do you need. Enjoy your country and get a secound job if you can’t manage your needs.. Go for a visit , that should cure your excitement about moving.. LOis Roncal

  11. You are wrong, you can buy about anything you want in Panama. to call it a third world country is incorrect, it is a developing country and a cross roads for trade internationally.

    ne of the many reason I left the US was to slow down and live my life instead of working until I died. I will give thanks for my opportunity to live here.

  12. Wayne Crawford says:

    Couldn’t disagree more, Lois. We’ve lived in 4 different countries. Every place was different. But they’ve all been interesting and spiritually enriching. A second job? Not if quality of life counts.

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