What are the best places in the world to retire? That would depend on a number of factors... For most people who spent their lives fighting endless winters and grew tired of scraping their windshields with an ice pick, the answer is deceptively simple: "A beach, and plenty of sunshine!" Libya has terrific beaches, and Somalia enjoys sunshine all year round, for example, and although you might be tempted to explore those and many other exotic countries, you wouldn't necessarily consider retiring there.
If you're coming from the United States or Canada, you still have five continents to choose from, barring Antarctica presumably. Australia offers a solid language advantage, but down under is a bit far away, especially if you plan to stay in touch with your relatives at home. In Asia, unless you are of Asian descent, as well as in Africa - even if you are of African descent - you would not blend in easily, because the mentalities are very different (I love Africa, where I spent my teenage years). Europe is a nice place to visit, but notoriously expensive (which is what Europeans say about New York City, invariably adding that they would not live there). That leaves South America. Taking into consideration the northward migratory tendency of México, which must hint at something, and the distance factor of countries like Argentina or Chile, which endure chilly winters (think penguins), or beautiful countries in constant political turmoil, such as Venezuela, we are left with Central America and the Caribbean. The 700 or so islands that constitute the Caribbean are very attractive, but they are not in the same league as Central America in terms of size and infrastructure. Vacationing in a picturesque location is not the same as starting a new life in a new country... Therefore, let's focus on the seven countries that make up Central America: El Salvador, Guatemala, Belize, Nicaragua, Honduras, Costa Rica and Panama.
The best places in the world to retire should satisfy a few basic requirements:
Political climate: Nicaragua is headed by former Sandinista revolutionary Daniel Ortega, a stalwart U.S. critic. At the inauguration of his third term (2012), he was hugged by close friend, the late Hugo Chavez (Venezuela) and Mahmoud Ahmadinejad (Iran). Honduras is recuperating from a serious crisis (2009) where basic constitutional rights were suspended. Belize's independence was recognized by Guatemala in 1992, but persistent territorial disputes are still unsettled. Guatemala, where the median age of the population is 20 years, held a democratic election in 2011. El Salvador's current president represents the Farabundo Marti National Liberation Front. In contrast, both Costa Rica and Panama have consistently held transparent democratic elections for many years and maintain no army.
Language: English is the official language in Belize, although Spanish and Creole are prevalent. English is widely spoken in Costa Rica and Panama, where many expats have relocated, but mostly by the educated elites. They are not bilingual countries, but conversational Spanish is not difficult to achieve. Learning a second language will do wonders for maintaining your brain fitness.
Tourism: All of Central America offers beautiful beaches and a varied geology including mountains and rainforests, with access to Indian cultures and plenty of ecotourism opportunities. Guatemala, Honduras and Belize share Mayan archeological treasures. Belize and Panama are sport fishing and diving paradises. The tropical climate is warm, without being overwhelming and you don't necessarily need to pack suits and ties. There are plenty of golf courses in Panama and plaid shorts are optional.
Accessibility and infrastructure: Panama has long been a bridge between the Americas. (It's not that hard to pinpoint it on a map... Try finding Belize!). The Panama Canal, an astounding engineering feat, connects the Atlantic and the Pacific Ocean and is doubling his capacity with the ongoing construction of a third set of locks at a cost of US$ 5.2 billion (don't miss the opportunity to visit the amazing construction site!). While driving in the capital can be challenging at first, the country is equipped with an always expanding and well-maintained highway system. Daily flights connect with the United States or Europe. A direct flight to Miami, FL takes only two and a half hours. A new international airport is under construction in the central provinces (Rio Hato) to better connect the beaches with the rest of the world and will be inaugurated in July 2013. A modern subway system (Metro) is under construction in Panama City. The aging fleet of recycled school buses, the colorful "Diablos Rojos", has been phased out and replaced by brand new air-conditioned Volvo modern buses.
Cost of living: In all of Central America, housing, food and services are generally affordable, including household help and medical services. Heating bills are rarely a concern and air conditioning is mostly reserved to bedroom usage, while many are content with a ceiling fan. Predictably, the cost of living is higher in metropolitan and touristic areas, while smaller towns offer cheaper opportunities and a more relaxed environment.
Safety: Even in former revolutionary hot spots like El Salvador or Nicaragua, the level of safety has generally improved, with the exception of Honduras. Panama however enjoys a distinctive status, since an amendment to the Panama Canal Treaty provides the United States with the right to intervene - including with military power if necessary - should the safety of the Canal be endangered.
Medical facilities: Many expats have elected to reside in the affluent neighborhood of Punta Pacifica (home to Trump Ocean Club) within walking distance of the state-of-the-art Johns Hopkins affiliate Punta Pacifica Hospital, located opposite the elegant Multiplaza Mall (for those Cartier, Hermès, Vuitton, Apple and Tiffany emergencies). That top-of-the-line hospital illustrates the reason why Panama is receiving an influx of "medical tourists": world-class medical care at discounted prices. Doctors and surgeons have received their training in the best U.S. universities and clinics and speak fluent English. Retirees enjoy discounts on medical visits, procedures and prescriptions. Appointments with a specialist are usually granted the very same day!
Cultural life and entertainment: Honduras, Belize and Guatemala offer well-preserved archeological monuments - at least for the time being since a Mayan temple was recently bulldozed in Belize to make gravel for a road construction (progress comes at a price). Panama provides a vibrant nightlife with top rated musical performances and artistic venues of all kinds, not to mention nightclubs, bars and restaurants that can rival those found in Manhattan. The stunning Museum of Biodiversity, designed by renowned architect Frank Gehry, located at the entrance of the Canal, is about to open and will host countless exhibitions.
Stable economy and currency: In most Central American countries, you'll need to get acquainted with the local banknotes (and keep a calculator handy) such as the Lempira (Honduras), the Quetzal (Guatemala), the Cordoba (Nicaragua) and the Colón (Costa Rica). In El Salvador, the U.S. Dollar became legal tender alongside the Salvadoran Colón in 2001. (In spite of this, El Salvador suffers from the lowest level of foreign investment in Central America). Belize's currency is also called Dollar, but it features the portrait of the Queen of England. Panama, on the other hand, has no central bank and does not print currency. Panama's economy has been fully dollarized since its inception more than a century ago and the only banknotes in circulation bear the familiar faces of Washington, Lincoln, Jackson and Franklin. No need for foreign currency exchange tables. Even Panamanian coins have the same weight and denominations as cents, dimes and quarters. Whatever you purchase in Panama, be it a house or a drink, will be priced in U.S. Dollars, which means you won't have to wonder if the Lempira is down or the Quetzal is up. I was recently attending a real estate convention in Vegas and I was commenting on the healthy state of the economy in Panama, where per capita GDP has more than doubled over the past decade with average annual growth rates of 8.5%, when a fellow Realtor started a fascinating discussion about the merits of Costa Rica. When he was about done, I innocently asked if by any chance he was carrying Costa Rican money in his wallet. He was, and gladly passed it around. I then offered to show some Panamanian banknotes and reached to my own wallet, extracting a handful of U.S. Dollars... At that point, we switched to another topic.
Welcome level: As soon as they arrive in Panama, travelers are given a card providing FREE healthcare insurance for 30 days, courtesy of the government. Panama offers the best retirement program in the world, with substantial discounts on most everything: medical expenses, meals, entertainment, lodging, travel, etc. All this is not based on age requirements, only on the condition of receiving a pension, which may qualify you for permanent residence, the celebrated "pensionado" visa. Most importantly, and I can personally vouch for it, Panamanians are genuinely welcoming. They tend to look up to foreigners and are as eager to share their culture as they are to learn about yours. This is just one of the reasons I believe Panama is one the best places in the world to retire.
[Editor’s note: According to a press release August 1, 2014, the Panama Authority of Tourism stated that no charge tourist insurance coverage is no longer being offered.]