What Is The Real Cost Of Living In Panama?

Street scene with Text about Cost of Living In Panama

As I’ve said, the cost of living in Panama depends in large part upon You.

Many locals can live here easily on $300 a month. I have no idea how.

Of course, other locals live on significantly more and others on much less.

Most people who come here from another country have a standard of living that they want to maintain to some extent.

Ask Yourself

  • What Lifestyle Do I Need To Be Happy?

  • Do I Need All The “Comforts Of Home”, Or Not?

  • What Income Do I Need To Have My Ideal Lifestyle in Panama?

My friends Cove and Bethany Cook kindly offered to give their perspective on the cost of living in Panama in the video below. The Cooks and their 4 children have lived in Panama for about 8 years.

Read these articles for more information on cost of living in Panama 

Budgets of Panama Residents

Don Winner of Panama-Guide.com asked expats in Panama to send in their budgets.

He explained the information he wanted to receive in the video below.   That is, what to include in the budget of what it costs them each month to live in Panama.  

I share the data he has gathered from people in various parts of Panama in the paragraphs below.  

Retiree Has High “Burn Rate” in Panama City

A 70 year old single American male has been living in Panama full time since 2000. A full time girlfriend lives with him, so these monthly expenses are for two people. He bought a new SUV in 2004 for $30,000 in cash. He bought a nice 280 square meter oceanfront condo in 2005 for $270,000 cash. He spends $4,000 per year ($333 per month) for major medical insurance. He reports spending $1,500 per month on “groceries and booze” and another $650 per month on “restaurants and fun.” He lists another $500 per month for “stuff.” His monthly condo fee is $370 per month for operations and maintenance for the building, as well as security, common water, gas, and garbage collection. For utilities he spends $120 per month on electricity, $130 per month for cable television and Internet, and $330 per month for two cell phones. So the total comes to $3,933 per month for two people, or $1,966 per person. There was a total upfront investment in cash of $300,000 dollars to buy the condo and his vehicle. So, the bottom line is – A retired man and his girlfriend live in downtown Panama City for $1,966 per person, per month.

Living On A Farm in Boquete

A single American man (lets call him Frank) lives on his farm in Boquete. He has a live-in girlfriend who spends a lot of time with him, especially on weekends, so these expenses are for two people.

Frank bought an income-producing 4 acre coffee and citrus farm upfront for $350,000 in cash.  He also bought a new car for $21,000 in cash. His property taxes are $150 per month. Utilities:  $5.35 per month for propane gas, $40 per month for electricity, $2.50 per month for water, $8.95 per month for Netflix, $25 per month for a cellphone contract with unlimited data. He spends $200 per month for fuel, $50 per month for auto insurance, $20 per month for home insurance, $300 per month for groceries, and another $300 per month on restaurants, entertainment, and dining out. There is also a $60 per month cost for a wireless Internet connection – more expensive because of the relatively remote farm location. One half-time farm worker costs $260 per month, including Social Security payments as required by law for an employee. Other costs for $50 per month were listed as “miscellaneous”. There was an up-front investment of $371,000 to buy the farm and the car.

Their total monthly expenses are only $1,471.  So, the bottom line is – A retired man and his girlfriend live on a working coffee and citrus farm in Boquete for $735 per month, per person.”

A Retired Couple Living On The Beach

A 55 year old man and his 45 year old wife live in Ojo de Agua, which is near the Playa Venao on the Azuero Peninsula, Panama. They bought their house for $27,000 cash about six years ago and invested another $10,000 in cash to remodel the house while they both continued to work in the US, before they could retire. They bought a truck for $12,000 cash in 2009, and they both have been living here full time for the past two years. They pay $56 per month for vehicle insurance, full coverage. Utilities are $40 per month for electricity, $11 for water, $55 for Skye TV, $25 for Internet through a Cable & Wireless USB connection, $30 in cell phone cards, and $60 for life insurance. They spend about $160 per month for fuel, used to drive to Las Tablas, visit friends, or to go to the different beaches in the area. They spend $200 per month on groceries and household supplies, and another $300 per month on restaurants, dining out, and “my husband’s cerveza.” They budget about $2,000 per year for international travel to visit the United States. “Give or take an ice cream here and there our living expenses for Panama is $550 a month per person. It would be more affordable if my husband would give up the Atlas and if we stopped eating at the beach everytime we go! But it is for those things that we love it here!!” I see an initial cash investment of $49,000 for the house, remodeling, and car. Their monthly expenses are just over $1,100 total. So, the bottom line is – A retired couple lives on the beach in Panama for $550 per month, per person.

A Retired Man Lives On His Social Security Check in Downtown Panama City

A retired American male has been living in Panama City for the past five years. He bought a new two bedroom condo in El Congrejo for $150,000 dollars cash, so there’s no monthly mortgage payment. He also bought a new car for $18,500 and a motorcycle for $1,500 dollars in cash, so no monthly payments there either. His only source of income his his monthly Social Security check, so he has to “watch every dollar.” His monthly expenses are $126 in condo fees, $75 for Internet and cable television, $65 for electricity, $300 for food, $60 for gas for both the car and motorcycle, and $24 for insurance. He lists another $100 per month as “miscellaneous” monthly expenses. He said “I live very comfortably on $750 per month, and I don’t skimp.” He spends the remainder on discretionary items such as travel and partying. His total up-front cash investment was $170,000 for the apartment, car, and motorcycle. So, the bottom line is – A retired man lives alone in his apartment in Panama City for $750 per month.

Off The Grid in Bocas del Toro

A retired husband and wife live on an island in the Bocas del Toro archipelago in the Republic of Panama. They spend $100,000 to buy the property and another $150,000 to build their home. They have no monthly utility bills because they live “off grid” using solar electricity and a rainwater catchment system. They report regular monthly expenses of $100 month for transportation (truck and boat); fuel and maintenance; $450 month food costs (groceries, beer, wine & eating out); $150 month for yard, agricultural work; $100 month lawyer fees for “typical Bocas stuff”, and $20 month for propane. They had an initial up front investment of $250,000 for the property and to build the house. Their total monthly expenses are $820 per month. So, the bottom line is – A retired couple lives on an island in Bocas del Toro for $410 per person, per month.

A Family of Five in Veracruz

A young working couple and their three kids live in a house they bought in Veracruz, located just outside of Panama City. They paid $23,000 or 10% down to buy the house, and then spent an additional $60,000 on repairs, remodeling, and upgrades. They spent $24,000 cash to buy two cars, one of which is paid off and there’s still a loan on the other one. Their monthly expenses are $1,600 for the mortgage, $257 for life insurance (related to the mortgage), $90 for fire/flood/content insurance as required for mortgage, real estate taxes $165. Monthly car payment $330 which includes insurance. Insurance on the second car is $100 per month. Diesel for both cars $280 per month. Health insurance is $120 for the entire family. Private schools cost $600 for three kids. Electricity is $350 per month. Garbage pick up $12 per month. Internet is $30 per month. They spend $130 per month for Satellite TV, and subscribe to two different services. Food and household supplies $1200 per month. A maid costs $200 per month, five days a week, mornings only. And a gardener is $80 per month, only one day per week, full day. They put down $107,000 to buy the house, fix it up, and buy two cars. Their total cost of living expenses are $5,544 per month. So, the bottom line is – A working couple and their three children live in Veracruz for $1,108 per person, per month.

Analysis & Crunching The Numbers

2  factors have the greatest impact on your cost of living in Panama.

1) Capital for Investment

The first is how much money you are able to invest up front. If you can afford to buy your home and car in cash, then that eliminates a lot of monthly fees for mortgage payments and the associated insurance required when you have a bank loan. So, buy putting more down up front greatly reduces your monthly expenses. No real surprise there, but it’s interesting to see that fact reflected in the monthly spending habits being reported.

2) Your Lifestyle

The second greatest factor is how the monthly “burn rate” changes depending on how people choose to live. If you buy your groceries in the supermarket, do your cooking at home, and don’t spend too much on restaurants or dining out then you can greatly reduce the monthly cost of living in Panama. Conversely, there’s literally no limit to how much you can spend, if you want to.

How Many People And Average Cost Per Month:

In this group of 6 households, their average, per person, monthly living expenses range from a low of $410 in Bocas del Toro to a high of $1,966 for an ocean view condo in Panama City.

The average, per person, monthly cost of living for this group was $919 dollars. The first group of 7 households with a total of 17 people had a slightly higher average of $1,130 per month, per person.

The average cost of living for these 2 survey groups is $1,024 per person, per month

These 2 groups consist of thirteen families and 31 individuals.

Thank you Don Winner for gathering this information.

It is wonderful to get good information so you can make an informed decision about whether you can afford to live in Panama.

As Don says as well, in many ways, your cost of living depends upon you.

Some things are definitely cheaper here, but some things cost more.

For instance, no matter how little water we use or don’t use here, our bill is $7.10 month. I am still astounded by that.

Electricity is also cheaper. We pay between $30 to $40 a month. More in the dry season since we use more fans.

But we don’t use air-conditioning. We find that if you use air conditioning it makes it difficult to ever leave the house because, in contrast, it seems so hot outside.

If you need to buy all the same food and brand names as you did in the States, then your cost of living will be higher.

In general, we have found that an income of $1200 a month for one or two is enough to live comfortably, although not in luxury.

You need to determine what life style you desire and what it will cost to maintain it in Panama.

More Cost of Living in Panama Info – Click a link below

 – Answer 3 questions to get your budget

 – Actual budgets of 25 expats living in Panama

 – Costs in Panama City

 – Cost of towns populars with expats

 – Cost of Living in Panama with Lief Simon

To find affordable property in Panama, start your search by Clicking Here.

Please Leave Your Comments Below

  1. Barbara

    Hey Betsy,
    I really enjoy your site here – you seem to give realistic information that is up-to-date. We are in our ealy 60’s, and have 2 adopted young children, 11 and 14. We have been considering moving out of the US, but have been uncomfortable with the information we have received from various places. It’s hard to be unbiased, I guess, so the information was either wildly ‘for’ the location, or wildly’ against’ the location. However, the info you post here strikes me as probably ‘right on the money’. It has made the idea of Panama seem much more realistic. I have a question for you….do you know if Panama allows homeschooling? We homeschool, and have been appalled by some things happening to people/families who homeschool in other countries. We also have 4 dogs – do you think that will be a problem? What about vets? I spoke with a person who was living in Guatemala, and she told me their dogs were killed by the locals (no, the dogs were not aggressive, and were kept in their fenced area). I suppose that can happen anywhere, but my understanding was it was not uncommon there. Maybe it’s not true, but it is a cause for concern. Also, I understand that dengue fever is present along the coast…….Is this a cause for concern? How often do people contract the various tropical diseases that are supposed to be endemic in Panama? It must sound silly to ask such questions since you live there, but I don’t know where to get answers that are realistic. I must have confidence in you! Thanks very must for these informative posts. Keep up the good work. Suddenly, it seems as though we actually might be able to swing it! Yea!

    • Betsy

      Hi Barbara,

      Thanks, I do try to paint a realistic picture of Panama.
      I don’t think describing Panama through rose-colored glasses really
      helps anyone in the long run.

      Kudos to you and your husband for adopting just when most people are thinking
      of retiring – sans kids.

      My parents had their last 2 kids (twins) when my dad was 50.They had 7 kids, I’m the 4th one.
      They didn’t have an empty nest until my dad was almost 70.
      However, my mom was 12 years younger than my dad, which made it much easier for him.

      Technically you cannot homeschool in Panama.
      However, if anyone official asks, which is unlikely, simply cite a curriculum
      or on-line school that your children are using. I am very much an unschooler,
      so my children don’t use those. But I have never been asked.

      A friend of mine was asked just once in her 9 years of homeschooling in Panama. She simply named the curriculum they were using, and that was the end of it.

      Dogs are not going to be a problem.
      My neighbor has about 8 dogs. Luckily our houses are pretty far apart so I don’t hear them barking.
      I have never heard of anyone harming a dog that is not harming them. I wouldn’t worry about that.

      Vets are another story.
      There are good vets, but there are also terrible vets.
      I would ask a number of people, preferably expats, to recommend a vet.

      Dengue fever is a possibility, but they keep pretty good control of it.
      You hear about a case occasionally in Puerto, but not often.

      The health ministry goes through neighborhoods pretty regular to lower any risk factors.
      For instance, you will be cited if you have standing water, even if it is only coconut shells.
      There is no real problem with tropical diseases here – at least in the part of Panama where I live.
      Not that they don’t happen, but its not anything approaching an endemic.

      The biggest health concern for me is the sun.
      Keeping skin and eyes protected from the strong sun at the equator.
      But that is easily done with good sunglasses, beach gear, and clothing.
      Reminding the kids to protect themselves will be your biggest challenge.

      Thanks again for commenting and for your compliments on my site.

      I hope this was helpful. If you make it to Puerto, give us a holler.
      – Betsy

  2. Cecil

    My wife and I live a alone but want to find a nice. 3 bedroom and 2 bath so when our children and grand kids come visit

    • Betsy & Reyn

      Hi Cecil,
      I am sure you can find something like that.
      If you are asking whether we know of something like that in Puerto, please use this link to ask me

      Best wishes

  3. Excellent goods from you, man. I have understand your stuff previous to and you are just too wonderful.
    I really like what you’ve acquired here, certainly like what you are stating and the way in which you say it. You make it entertaining and you still take care of to keep it wise. I can not wait to read far more from you. This is really a tremendous web site.

  4. Nvenn DeVay

    this was the most useful information I have found so far on the cost of living in panama or costa rica.It has all the information but more importantly, explain why the numbers are what they are.

  5. Ben den Holder

    It was really nice to read what people live on in Panama. My wife was worried about this issue, now I can show her that we can easily live on the pension we will be getting in 2015.
    I did not read anything about the pensionado plan, does this mean none of these people had this?
    It would mean a significant saving, or am I wrong?

    • Betsy & Reyn

      Hi Ben,
      I’m glad the cost of living info was helpful to you.
      I am sure some people did have the pensionado visa. It does give you some savings. We don’t have a pensionado visa ourselves. As a pensionado, or anyone on a visa who is of Panamanian retirement age, you can save money on utility bills, eating out and staying at hotels, as well as medical costs.

      Please visit this link to see some posts I have done on the Pensionado visa

      However, I don’t think it adds up to significant savings unless you have alot of medical expenses and will travel in Panama frequently.

      One of the biggest items in our budget is travel costs to visit people back in the States. Of course, there are 4 of us. Whether the the 25% off plane tickets you get from a pensionado visa actually results in savings you will have to verify for yourself. Since the discount applies only to certain types of tickets, it is my understanding that the tickets you can find online are even cheaper than such “discounted” tickets.

      I hope this is helpful.

  6. Barclay

    As a percentage of what a person’s living expenses are in the US, what would you say that is in Panama? For example if it costs $4K/mo in the US could a person have the same standard of living in Panama for 50% of that, or $2K/mo?

    • Betsy & Reyn

      Hum.. I have never thought of it that way.
      As you know the cost of living in the states varies widely. $4K in Southern California doesn’t go nearly as far as it does in Oklahoma.

      I can say that a couple can easily live here on $1200 a month. I know a family of 6 that does it for $800 a month. They live in a nice house. Are careful about money, but don’t seem to be in hardship.

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