Presented with permission from Bob Adams, of Retirement Wave
One of the questions most frequently asked is “What is the cost of living in Panama?” Well, that’s an extraordinarily difficult question to answer, because you’re different than every other person that comes down here and every other person who lives here. Your style of life, what you like, what you don’t like, everything figures into cost of living. I can give you an example or two, but I’ll talk about it in more general terms after that because that’s really the best way to focus on it.
First, let’s talk in terms of the cost of electricity. I have an apartment here where I’m sitting right at the moment. It’s about 1,500 square feet, I have a couple of bedrooms, a couple of bathrooms, I have a little tiny place that’s an office with a half bath associated with it, I have a living area that includes both dining and living space, a kitchen and a balcony (although I don’t have to worry about the balcony when it comes to the cost of electricity). We pay about $145 per month for my electricity. With a partial exoneration for age, this works out to about $120 - $125 per month.
Now, I could cut that substantially if I simply cut my air conditioning use, but I use my air conditioning a lot more than many people do down here. I have it on in the bedroom every night and during the daytime almost all the time, even though there are days when I really don’t need it. But the truth is, I sit in front of a computer in a little tiny office that has no air conditioning and I have to keep it on in the living area so that it’s cool enough for me to be comfortable when I’m working on the computer. If it weren’t for that, I would reduce my air conditioning use and therefore its cost quite substantially. You could eliminate it completely, but then you’re going to have to deal with mold in a humid climate, especially when it’s the rainy season. That’s just another concern you have to have, but its what people live with. So, considering how much I use the air conditioning, I don’t consider this to be an outrageously high price at all, in comparison to what I paid elsewhere. But for someone else with an apartment twice the size, or a freestanding home that’s twice the size or that has two or three or four people living in it, it’s obviously going to be very different. This only is an idea of what I pay so you can have something to compare against.
Gasoline is another major expense for most people. Here the prices are more or less the same as they are in US or very comparable. Most Americans come down and aren’t surprised at all; they use the American gallon, so they’re very comfortable with the pricing system and the measurement. People from other countries, in Europe for example, find that the price of gasoline in Panama is cheap, the same as they do when they go to the US.
In terms of supermarkets, we have everything under the sun. Panama has gone through a lot of economic growth over the last decade. You can go into supermarkets here, really very nice ones, as good as any I’ve been in in the US, and you will find 99% of what you want, but you’re going to pay for it. These are really nice supermarkets and the prices aren’t going to be that much different than they are in North America or Europe. They might be cheaper than in Europe for some things, but on the whole, it’s comparable.
However, nothing prevents me from simply going to a local market and purchasing fruits and vegetables for example much less expensively there than I can in the supermarket, especially when I’m out in the countryside. So people living in the countryside can buy local produce that certainly have a substantial impact on lowering their expenses.
Consider all these are factors and what it all boils down to in the final analysis is that the best estimate that most people make is that you can live here for 30% less than you did when you were back home. Well, maybe so. Again, it depends on you. If you want what you had in Europe or in North America down here, you’re going to pay for it because it has to be transported here.
One of the first things I did when I moved here was to go to the stores and buy only things that were produced either in Panama or in one of our neighboring countries, Costa Rica and Colombia predominately. Ice cream, for example, is a lot cheaper from those providers than having to buy American ice cream that has been shipped in a cold chain all the way from the US. That saves money.
Some of them I liked and some I didn’t like. I found most of the local meat and dairy products very acceptable and sometimes preferable. As far as fruits and vegetables are concerned, I’m not about to buy imported products in that category. The meat here is tougher because the cattle are grain fed and raised in the fields and the farmers are less likely to use the hormones than they are elsewhere. I can’t say that for a fact for all of them but in general there’s no question about it. The meat here tastes more like it did 30 years ago in the US. It’s got more flavor to it, but it can be tougher. It’s not that expensive. When I get beef, not all that frequently, I often get the filet, which is the most expensive cut they have and it’s very tender and it’s very good. But most of the time I’ll be eating chicken and fish and pork and these are very nice. I’m very satisfied and perfectly happy with it.
And so relative to food costs, again, it depends. If you’ve got to live like you did “back up there”, wherever “there” is, you’re going to have to pay for it. But if you’ll relax and look around and find the local places that people go to in order to purchase things less expensively, you’ll save a lot of money and you’ll find that a lot of local products and local foods are every bit as good. Certainly, the mangoes are a lot better here than they are in the supermarkets up north, I can assure you of that. And the wonderful part is that they fall off the tree down the street, so I can get them free when they’re in season.
These are all the sorts of things that are involved in determining cost of living. The real truth of the matter is you can come down here and you can spend more money than you’ve ever spent in your life, if you so desire. Those things are here to be purchased. Your lifestyle can end up costing about the same as in the US, or you can pay substantially less that you did in the US or Europe or Canada. It really depends on you. Your cost of living is not going to be determined by Panama; it will be determined by you. That’s an important factor to keep in mind.