Panama and Costa Rica: paradises for retirement?

Are Pensionado Visas in these Central American countries worth it?

Panama and Costa Rica: paradises for retirement?

Nearly three decades ago, International Living created its first Global Retirement Index featuring the most attractive retirement spots in the world. Since then, new choices have appeared but some countries still attract the greatest number of North Americans, Canadians, and Europeans. In an increasingly dangerous world, Westerners will always look for safe havens, and Panama and Costa Rica are attracting newcomers with their particular perks and appealing packages.

According to the US Social Security Administration "the number of North Americans retiring abroad grew 17 percent between 2010 and 2015". Evidently, the two Central American nations are leading the group when it comes to safe retirement havens. "Retirees most often cite the cost of living as the reason for moving elsewhere" said Olivia S. Mitchell, director of the Pension Research Council at the University of Pennsylvania’s Wharton School.

Tropical climate, beautiful beaches, and inexpensive health care options are just some of the charms of these two Central American pearls, but let’s have a closer look at the Pensionado Visa and see if it’s really worth the hype.


The article 200 of the Executive Decree No 320 dated August 8, 2008, stipulates the requirements for obtaining a retirement visa.

One of the perks of the Pensionado visa is that the applicant doesn’t have to meet the national age requirements and anyone over the age of 18 can qualify for a retirement visa as long as they can prove that they receive a lifetime compensation of minimum $1,000 USD per month. If the applicant acquires a property valued at least at $100,000 USD, the minimum monthly sum is reduced to $750 USD.

Dependents are also accepted as long as they are up to the age of 18 years old. In the case the dependents are full time college students, the age limitation goes up to 25 years. For each dependent, Panama asks an additional monthly receipt of $250 USD.

Although the primary reasons for selecting Panama as a retirement destination are the cost of living and the relatively inexpensive healthcare options, there are other perks associated with this program which should be mentioned. Panama Offshore, a law firm that offers advisory about immigration & real estate transaction services, makes reference to the following benefits for foreigners with the Pensionado Visa: 

  • One time Duty tax exemption for household goods up to a total of $10,000.
  • Duty tax exemption for importing a new car every two years.
  • 50% off entertainment anywhere in the country (movies, concerts, sports)
  • 30% off bus, boat, and train fares
  • 25% off airline tickets
  • 50% off hotel stays from Monday through Thursday
  • 30% off hotel stays from Friday through Sunday
  • 25% off at restaurants
  • 15% off at fast-food restaurants
  • 15% off hospital bills (if no insurance applies)
  • 10% off prescription medicines
  • 20% off medical consultations
  • 15% off dental and eye exams
  • 20% off professional and technical services
  • 50% reduction in closing costs for home loans
  • 25% discounts on utility bills
  • 15% off loans made in your name
  • 1% less on home mortgages for homes used for personal residence.

According to the statistics obtained from the Observatorio de Legislación y Política Migratoria, the number of approved residency permits increased from 20,542 in 2016 to 23,388 in 2017. From these, 9,559 were for permanent residency, 6,363 for provisional and 4,202 for temporal residency. From the total of 23,388 approved permits only 943 were for pensioners and retirees. The highest number of approved permits 3,941- were falling under the category of Friendly Nations Visa.

In 2009 the US State Department estimated that roughly 12,000 US citizens live in Panama, with investors and foreign workers making up the greatest percentage; however, there's also an increase in the baby boomers segment which falls under the Pensionado Visa.

Costa Rica

The country that is famous for the Pura Vida lifestyle and for its tropical weather and lush beaches, attracts each year a new wave of legal residents who decide to retire in this Central American paradise.

According to the Economic Commission for Latin America and the Caribbean (CEPAL), Costa Rica is the Latin American country with the highest percentage of registered foreign-born population. In 2011, Costa Rica had 385.000 legal immigrants, which sums up to 9% of the total population.

Having some indisputable strengths like a high living standard, political stability, excellent healthcare, and a developed service sector, Costa Rica continues to lead when it comes to attracting North American baby boomers. According to the U.S. Department of State, around 50,000 Americans reside in Costa Rica, many of them being retirees. Additionally, the number of US expatriates who collect their Social Security checks in the Central American nation has increased by 67% since 2002.

Costa Rica offers two types of visas: Pensionado and Rentista. According to the Direccion General de migracion y Extranjeria, the Pensionado Visa requires a minimum monthly income of $1000 from a qualified pension or retirement account or from Social Security. Under the Rentista Visa, the applicant needs to prove it has monthly earnings of at least $2,500 for a minimum of two years, or make a deposit of $60,000 in a Costa Rican bank.

The incentive package or in-country discounts for retiring in Costa Rica is not as impressive as the Panamanian one; however, there are certain recognitions and perks which come with it. The biggest would be Caja or the public health care system, for which retiring expatriates pay a relatively low monthly fee. The Ciudadano de Oro (Gold Citizen) offers senior citizens, older than 65 years, additional discounts for pharmacy products, private clinics, groceries, and different services. Over 1700 businesses participate in the Gold Citizen program. 


Latin American Post | Adina Achim

Copy edited by Laura Rocha Rueda

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