Why Panama Is the Ultimate Residency Destination for US and Canadian Retirees in 2026

Overview of Retiring in Panama

Panama has consistently been chosen as one of the favorite retirement places, and for very solid reasons. Today, we explore Panama retirement benefits with a special focus on residency and the Pensionado Visa. 

What is the Panama Pensionado Visa?

In line with its cosmopolitan environment and business-oriented essence, Panama offers a program called Pensionado through which any individual can apply by following certain parameters.

The main eligibility criteria consist of having a lifetime pension of at least $1000 a month from any source, whether from state retirement, disability, war duty, and so on. Interestingly, this visa is available for anyone who wants to retire, regardless of their age.

For US Citizens

For U.S. seniors, it is especially interesting to consider the pensionado visa in Panama for a number of reasons:

• Lower cost of living
• Wider stretching of the retirement income
• Discounts on health
• Discounts in entertainment and hotels
• Discounts in restaurants
• Possibility of importing certain goods with tax exemptions
• Opportunity to reside in a quieter and smaller place
• Excellent lifestyle
• Coastal sceneries nearby 
• Advanced infrastructure
• Cosmopolitan environment
  
  
  

Financial Requirements

As described above, the minimum pension must be $1000 for a single applicant, and it doesn't change for married couples. If both the wife and the husband have pensions, it is sufficient if they add up to $1000. All combinations apply (400/600, 500/500, 300/700) as long as the main requirement is met.

This is to be proven through a letter from the institution issuing the pension, which must be apostilled, or authorized and authenticated. 

Cost of the Panama Retirement Visa

The Panama retirement visa is one of the less costly approaches since it doesn't require an investment. That is, applicants will have to pay the corresponding government fees and legal expenses. Some Panama programs stipulate a mandatory payment as a repatriation security policy.

Processing Time and Common Refusal Reasons

As for the preparation of the application, it can be finished between 3 and 4 weeks, depending on how fast the applicant can collect documents and what their state is. Once all documents have been collected, approved and submitted, it takes approximately 3 months to obtain a permanent pensionado residency.

Important Documents Required

• Passport of the main applicant, which must have a validity of over six months
• A second ID to confirm the applicant's identity (it usually is a driver's license, but it can be any other document)
• Police criminal record (Applicant and all dependents older than 18 must prove that they don't have a criminal history)
• Birth and marriage certificates (when applying with relatives, the relationship must be proven through the corresponding certificate)
• Sworn declaration of being single and the certification stating studies at the Panama university (it applies only to dependents older than 18)

Additional Requirements for Dependents

Under the law stipulated by Panama, the pensionado visa accepts children when they are younger than 18. Other children can apply only if they're pursuing formal studies in Panama (that is, if they are studying at the university) and if they are single. For all dependents, regardless of their age, the minimum pension must be increased by 250 dollars.

Application Process

Application Submission and Approval

The first approach to pensionado residency is through careful evaluation and a compliance procedure. Once the applicant is cleared and the Mundo teams assesses his/her eligibility, they can proceed with collecting the documents and filling out the forms. This is the longest part of the process, and according to our experience, it can last from one to three weeks. 

We strongly recommend applicants to be thorough at this stage, as the following steps will highly depend on the accuracy and quality of the documents. 

Visiting Panama Before Obtaining A Residency Permit

Applicants must travel to Panama to submit the application and receive a card that grants them a temporary residency. All in all, this shouldn't take more than five business days. 

The second visit only takes place once the application is approved (usually after three months), and this is when the family obtains a permanent residency and subsequently a Panamanian Cedula. 

Applying with Spouse or Dependents

It is possible to add dependents, meeting the above-listed conditions. While spouses and children with disabilities can be older than 18, other children must be between 18 and 25 and study at the university. 

At this point, it is worth noting that children will lose the right to pensionado residency when they turn 25, no matter what. This comes with the program. They can, however, pursue other types of visas in the Republic of Panama if they are eligible. 

Benefits of the Pensionado Visa

To retire in Panama has its benefits, especially for Canadians and Americans who can really stretch their retirement money in a country with a much lower cost of living, lower costs in real estate, lower expenses, and appealing tax incentives.

Tax Advantages in Panama

One of the best benefits of living in Panama is that it's a territorial taxation country. It means that all income generated outside the country is not taxed in the Republic of Panama. 

This applies only if the individual is a tax resident and can prove it by living more than six months a year in the country, and it doesn't exempt them from paying taxes in any other place where they may be taxable. 

Discounts Available for Pensionado Visa Holders

Those who retire in the country of the canal access the following discounts:

• 50% off on entertainment activities like movies, concerts, or sports events
• 50% off at hotels from Monday through Thursday
• 30% off at hotels from Friday through Sunday
• 25% off at restaurants on airline tickets
• 15% off on utility bills
• 20% off in medical consultations
• 15% off on dental and eye exams
• 10% off on prescription medicines
• Import household goods duty-free
• Import a new car duty-free (every two years)

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Residency and Family Inclusion

One of the aspects that worries retirees when obtaining a foreign visa is their proximity to family. People, especially seniors, want to spend quality time with their children and grandchildren, and they may feel that the distance is getting in the way. 

Luckily, thanks to all the benefits, travelling becomes more accessible and allows for more frequent visits. Another great perk is that Panama is close to the USA, a short flight away from Miami, New York, and the East Coast.

Travel and Quality of Life

A feature that impresses citizens from the USA is how they can get the same lifestyle then back home yet at much lower prices. The capital, Panama City, is a modern cosmopolitan metropolis where you can find people from different religions, cultures, and ethnicities cohabitating peacefully. 

The presence of hotels like Marriott, Hard Rock Café, Westin, and Hilton sets the tone of the city, adding value to the areas that are reached by best-in-class restaurants and luxury brands.

Pros and Cons of Retiring in Panama

Advantages of Living in Panama

Green spaces

Even in Panama City, you can enjoy some great green spaces, for example, Parque Omar. Nested in the San Francisco neighborhood, it was established in 1982, where there used to be a golf course. Now visitors can walk around the circuits, jog, ride their bicycles, or walk. 

Interesting nightlife

Being in Panama feels like being in a small version of New York or any other relevant city in the USA. There are plenty of trendy bars, restaurants, concerts, and theaters to enjoy nightlife. Some of the best neighborhoods for this purpose are Casco Viejo and Calle Uruguay

Proximity to the beach

Unless you live in Florida, tropical paradises are way out of the question for Americans. While the USA has incredible national parks, Panama is a coastal heaven.

From Panama City, residents are one hour from the beach in any direction (to the Caribbean or the Pacific). As they move away from the capital, they can access even more awesome beach landscapes and secluded paradises. From archipelagos like San Blas and Bocas del Toro, to islands like Coiba or Contadora, those who live in Panama can access all this within a short driving distance.

Potential Challenges to Consider

Canadians and Americans are used to European-like cities, and Panama can be challenging. For starters, there are no addresses like we're used to in other parts of the world. The first weeks are difficult to get a costume to this habit because we rely heavily on precise addresses. Soon, retirees can learn the Panamanian way. This consists of finding your way through references. 

When you climb to a cab in Panama, your directions will be something like this: “I'm going to San Francisco (the neighborhood), to Casa de la Carne (a famous supermarket that plays the role of the reference), two blocks down, and then to the right”. Although it seems unthinkable at first, you end up getting used to it.

Healthcare in Panama for US Expats

For seniors, health is a major concern, and luckily, Panama doesn't disappoint. Good clinics and hospitals can be found all across the country, with some of them really standing out for their quality and renown. The Pacifica Salud hospital is affiliated with Johns Hopkins Medicine International, offering the highest standards and state-of-the-art facilities, while other clinics don't FALL behind. The Panama clinic is another fine example, located in Punta Pacifica, and it's part of a larger complex including a hotel, an office center, and a helipad.

More information about the retirement visa

Cost of Living in Panama

With a lower cost of living, the higher your income becomes. This is particularly useful for the retirement stage in life. For this comparison, we have chosen Miami, whose cost of living is slightly higher than the rest of the USA. 

In the country of the canal, you can expect to find meals in restaurants for $5 or $6, while in most sophisticated places, you can have dinner for 15 or 16. On the other hand, in Miami, for $16.00 you don't even get a burger. To have dinner in an average place, you will be facing a bill of $60.00 per person, and 150 in fancy restaurants.

Frequently Asked Questions

Is it Safe to Retire in Panama?

Panama is a safe as it gets, especially in Latin America. There are petty thefts and minor crimes, but there's no organized crime. All in all, the city is not a particularly dangerous city. Having the basic home security equipment and watching your valuables in outdoor places should be sufficient. 

Can I Collect Social Security and Live in Panama?

In general, yes, as this income can be used for your expenses and costs in Panama. 

Does the Pensionado Visa Grant Permanent Residency?

Yes, and this is one of the main benefits of the pensionado visa. 

A Straightforward Visa For Americans And Canadians

To sum up, the pensionado visa is one of the best programs available for residency, aiming not only at seniors but also at people of all ages. The most challenging part of the process is actually having what makes you eligible, which is the lifetime pension. 

Yet, if you do, you get permanent residency in a country with plenty of benefits, excellent health care, and a supreme lifestyle. Especially for Canadians and Americans whose context allows them to have a pension higher than $1000, Panama is a solid alternative. It offers an outstanding way of living the golden years and enjoying the fruits of the retirees’ labors rather than struggling to make ends meet. 

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