Panama vs. Ecuador: Where Is the Best Place to Retire? (2024)

Panama vs. Ecuador: Where Is the Best Place to Retire? (1)

Cuenca, Ecuador photo by Jonathan Hood

When considering relocating to Latin America, many would-be expats quickly narrow their search down to the countries of Ecuador and Panama.
And why wouldn’t they?

Ecuador has topped out International Living’s list of best places to retire for five years running, with Panama always following closely in the second or third spot. This list is based on an index of different factors such as climate, cost of living, culture, and many more. However, much of this criteria is highly subjective. The hot, humid climate you enjoy could be someone else’s idea of misery. Likewise the Burger King on the corner might be a welcome sight to some, but for you it might evoke the very feelings that prompted you to leave behind the cookie-cutter culture of the States.We’ve outlined some of the major differences between the two countries below, but don’t take our word for it. The best decision-making tool is your own observation. Plan a trip, and check things out for yourself.

Cost of Living

In this category, the advantage goes to Ecuador. In most parts of the country, you can easily get by on about $1,200 per month, including rent. This number gets even lower the further you venture into the rural areas where monthly rent can run as low as $150 per month. Combine that with an average cost of $1.90 for a four course meal, $1.50 for a gallon of gas, and the help of a domestic servant for a mere $10 a day. While it is possible to get by on the same $1,200 in Panama, it would be with a standard of living that more closely resembled that of the locals.

Real Estate

While Ecuador wins this one for its low cost homes, Panama may have a slight edge when it comes to the ease of the entire process. New homes in Ecuador are well below the $100/square foot price. That’s half the price of comparable homes in Panama, although the construction is different. Homes in Ecuador are built of cement and red clay.

The home buying process is easier in Panama, where international banks are quick to offer financing to foreign residents. Closing costs are twice as high in Panama (around 6%). However, property owners in Panama may be exempt from property taxes for a number of years if the home is their only residence.


The infrastructure of Panama closely resembles that of the U.S., and its roads are much more well-maintained. Other than that, there’s little difference between the two countries. Ecuador offers several options for public transit, including buses and taxis, that average around $1 per hour. However, they may not be the safest options (See Safety below.) Panama offers similar modes of transportation for a slightly higher premium. Both countries offer convenient direct flights to several U.S. hubs from a few key cities.

Health Care

While health care in both countries is better than you’d expect, the quality may be slightly higher in Panama, particularly in David and Panama City. Panama boasts many private hospitals with English-trained and English-speaking doctors. In both countries the cost is lower than U.S. health care, up to 90% lower in Ecuador where doctors will even make house calls for less than $25. Both countries also offer a variety of health insurance options for foreigners.


Now here’s where personal preference really plays a big factor. While we can’t say which countries earns the most points in this category, we can tell you which one most closely resembles the culture of the U.S. It’s Panama. With a much larger and more established expat community, Panama will initially feel the most like home. It’s up to you to decide whether that’s the atmosphere you’re seeking.

Both countries use the U.S. dollar, so there’s little risks associated with currency exchange. English is widely spoken in both, although in Ecuador it’s largely confined to touristy locations and international business areas. Both are also home to many U.S.-based restaurant chains and other franchises. Modern conveniences are found in both, although internet service is reportedly much better in Panama. It’s true in both countries that communication is more accessible the closer you are to the larger cities.

Panama vs. Ecuador: Where Is the Best Place to Retire? (2)

Boquete, Panama photo by Ken Mayer


While this factor also depends greatly on your own personal taste, most will probably prefer Ecuador for its more temperate and varied climate. Panama is mostly hot and humid everywhere with large amounts of rainfall, particularly in May through December, although it’s slightly lower on the Pacific coast than the Caribbean side. The only real difference in the country’s climate is in the higher elevations where the temperatures and rainfall both decrease. Some areas may see temps in the 50’s versus the 84 degree average near the coast.

Ecuador experiences a more diverse climate across its four main regions. The mountainous Andean Sierra boasts average temperatures of 75 degrees by day and around 60 at night. With a lot of sunshine, 12-hour days, and relatively low humidity, its climate is considered by most to be nearly perfect. Ecuador’s coastal region and the Amazon rain forest more closely resemble the climate of Panama: hot and humid all year with temps ranging from 80 to 95 degrees and year-round rain. The Galapagos Islands have much milder temperatures and less rainfall.


While Ecuador and Panama both have plenty of cultural attractions, the edge here goes to Ecuador. While both countries boast many activities and forms of entertainment, those in Ecuador are often more authentic and less Americanized. With over 28 indigenous groups speaking more than 10 languages, evidence of the country’s heritage fills the marketplaces and festivals that abound in the South American nation. Panama is also a culturally rich country, but often in the form of museums and shopping districts.

Residency and Retirement Benefits

Panama wins this one, hands down. Requirements for a pensioner’s visa are similar between the two ($1000 per month income in Panama versus $800 in Ecuador). However Ecuador offers very few incentives for retirees. Panama, on the other hand, boasts a long list of discounts for those who qualify for its pensioners program. This includes savings of between 10 to 50 percent on virtually every category of goods and services including utilities, closing costs, entertainment, travel, and even health care. In addition, retirees can import up to $10,000 in household goods duty-free, as well as a personal vehicle every two years. And retirement in Panama has never been easier. Recent legislation has expanded its residency program to include individuals who may seek employment upon relocation, at least for citizens of the 47 “Specific Countries” on its list. This change was implemented to counteract the current labor shortage in the country.

Investment Potential

Buying property in both Panama and Ecuador can be a good investment. Since Ecuador generally offers more affordable options, its homes often have more potential for appreciation. However, even more advantageous than buying a home is the opportunity to invest in land in some of the more remote areas where expats are only just beginning to develop an interest. For those savvy enough to get in during the early stages, there’s much money to be made once development begins.

Investing in land won’t get you quite as far in Panama. Since expat communities there are more established, the lots are more expensive. You’d best build if you want to turn a profit. Panama does, however, have a much better rental market than Ecuador and more property management companies to provide assistance. Properties in Panama consistently experience higher occupancy and rent for a high premium.


While both countries have areas that are safer than others, Panama is definitely the safest overall. In fact it’s one of the safest in Central America, experiencing less violent crimes in a year than New York City does in a day. The country also saw the addition of the Tourism Police Force in 1992, which was specifically established to assist tourists in Panama City. Conversely, Ecuador is plagued with a murder rate of 19 people per every 100,000, four times that of the U.S. Even more alarming is the fact that much of the country’s violent crime occurs in areas heavily populated by tourists. Public transportation, especially taxis, are prime targets for criminals. It’s recommended that all taxis be radio-dispatched. Don’t just hail one on the street.


Panama wins again, with free public education that is a requirement for children ages 6 through 15. Investments are currently being made into the education system, to increase the number of educated adults in the workforce due to the labor shortage mentioned previously. Several good private schools also exist, many of which are bilingual. By stark contrast, Ecuador’s education system is in the bottom 50 world-wide. While it does have some private school options, most aren’t truly bilingual, only teaching English as a second language.

Things to Do

There is no shortage of activities in either Panama or Ecuador, and we would be hard-pressed to award this category to one country over the other. Both have options for exploring nature, such as whale or bird watching. There are also plenty of opportunities for adventure, like hiking or rafting. No matter what you’re into, you’re sure to find a place to enjoy your favorite hobby or perhaps develop a new one.

Panama vs. Ecuador: Where Is the Best Place to Retire? (2024)


Why is Panama considered one of the best countries to live after retirement? ›

The countries were ranked on the basis of factors such as cost of living, healthcare, climate, and retirement benefits. It seems Panama's pension program, Pensionado, has earned the country the first slot on the index.

What is the number 1 place to retire in the world? ›

It's no wonder that Portugal has topped the charts for the best places to retire through the years. This tiny country in the southwest corner of Europe has something for everyone.

Is Panama a good retirement country? ›

Panama is one of the world's top retirement destinations. In this country, you have three dramatically different retirement lifestyle options to choose among: cosmopolitan cities, beautiful beachfront towns and cooler mountain climes.

Is Panama safer than Ecuador? ›

While both countries have areas that are safer than others, Panama is definitely the safest overall.

Is it better to retire in Belize or Panama? ›

Panama boasts one of the lowest crime rates in Central America, especially outside of the capital, Panama City. Belize has a higher overall crime rate per capita because it's much smaller than Panama, but most criminal activity is found in Belize City and we don't recommend living there.

Where is the happiest place to retire? ›

Top 10 happiest countries to retire in!
CountryHappiness Index 2020Number of sunshine hours
6 more rows
5 Nov 2021

Where is the healthiest place to retire? ›

#1. Portugal. Portugal is one of the world's healthiest places to live, with low rates of disease and an average life expectancy of 81.6 years. People in Portugal die 12% less often from cancer than people living in other European countries.

Where is the safest cheapest place to retire? ›

Below, you can review our list of the top ten cheapest countries where you can retire well.
  • Malaysia. ...
  • Spain. ...
  • Costa Rica. ...
  • Panama. Cost of Living Index: 48.25. ...
  • Peru. Cost of Living Index: 30.74. ...
  • Slovenia. Cost of Living Index: 47.30. ...
  • Austria. Cost of Living Index: 64.11. ...
  • Australia. Cost of Living Index: 72.27.
1 Oct 2022

Does Panama have free healthcare? ›

Public Healthcare in Panama

The public hospitals in Panama are funded by the Social Security System and the Ministry of Health. Services in these hospitals are almost free. However, those who can afford private healthcare may choose to do so.

How much money do I need to retire in Panama? ›

The average person lives about 20 years after the median retirement age of 65; $1,500 per month is equal to $360,000 over 20 years. This is the minimum amount you will need to retire in Panama.
Cost to Retire in Panama.
ExpensesCost per Month
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How much do you need to retire comfortably in Panama? ›

Cost of living estimates for a retirement in Panama vary, but generally you can expect to spend between $1,500 and $3,000 per month to live in Panama. Your spending level will depend somewhat on where you live.

What is the biggest problem in Panama? ›

Human trafficking for sexual exploitation and forced labor remains a serious problem despite some government efforts to combat it. Both Panamanian and migrant workers in certain sectors—including the agricultural sector, where many workers are Indigenous people—are subject to exploitative working conditions.

What should I avoid in Panama? ›

areas to avoid while visiting Panama due to higher crime rates are: The Caribbean Coast of the Darien Province (Drug Trafficking Region) The Mosquito Gulf coast region (Drug Trafficking Region) The Caribbean Port Town of Colon (Poverty Based Street Crime and Gang Activity)

What is the most stable country in South America? ›

Uruguay. According to the GPI, Uruguay is the safest country in South America, ranking 46th in the world with a score of 1.795. It's one of the most economically developed countries on the continent, with a low level of corruption, stable democracy and a high standard of living.

Is it better to live in Costa Rica or Panama? ›

So which expat destination is right for you? For those expats who require a large selection of goods at great prices, Panama will likely be a better fit. But if you value living a high-quality lifestyle in safe, peaceful, and ecologically beautiful communities, we highly recommend you choose Costa Rica.

What is the leading cause of death in Panama? ›

In 2019, malignant tumors were the main cause of death in Panama, with over 3.3 thousand occurrences. Cerebrovascular diseases ranked second, with 1,767 deaths, closely followed by coronary artery disease, with 1,763 fatal cases.
Leading causes of death in Panama in 2019.
CharacteristicCauses of death
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11 Nov 2021

Where do Americans retire in Panama? ›

Never Bored in Boquete: Panama's Best-Known Retirement Destination. Finally, there's Boquete, home to Panama's most famous expat community…and with good reason. Located in the Chiriqui Highlands, Boquete is an hour-long flight (or about a six-hour drive) from the capital.

Is retiring to Panama a good idea? ›

Panama is in the good books of American retirees among so many other expats because of its world-renowned Pensionado program. The program is truly unparalleled when it comes to providing the best discount benefits, services, and perks to people who want to retire in Panama.

Can I collect Social Security and live in Panama? ›

Retired US citizens living in America can retire to Panama and still receive their Social Security benefits.

What is the best Central American country for expats? ›

Panama is an excellent country to live in for American expatriates. It currently has a thriving expatriate community, with over 50,000 Americans who have already taken up permanent residency within the country. One reason for this is that the real estate in Panama is reasonably priced.

Where is the cheapest warmest place to retire? ›

More often than not, retirees will find the most affordable and sunniest retirement destinations in the southernmost state of the continental U.S. — Florida. In fact, one third of the 15 U.S. cities on this list are in Florida.

Is Ecuador a good place to retire? ›

Specifically, as we've been pointing out, you could retire comfortably in this country on a budget of as little as US$800 per month… or even less. And you could qualify for residency here simply by showing a minimum income of US$1,275 per month. Bottom line, we say Ecuador is the cheapest place to retire overseas

Where is the safest place to retire in the world? ›

Iceland. Canada might be closest; but, if you sail east a little more than halfway between North America and Northern Europe, you'll hit Iceland, which has claimed the title of the safest country in the world every year since the mid-2000s.

What country has the best healthcare for seniors? ›

The Countries With the Best Elderly Care
  • Norway. With its strong sense of community, 100% pension coverage and financial security for the elderly, it's no wonder that Norway is consistently found in the number one spot. ...
  • Sweden. ...
  • Switzerland. ...
  • Germany. ...
  • Canada. ...
  • The US. ...
  • Great Britain. ...
  • Staggered care systems.
3 Dec 2021

Which country has the best healthcare for expats? ›

France. The fashion capital of the world is also known for its best healthcare for expats. The country has world-class health facilities and medical professionals. The 'Protection Universelle Maladie' or PUMA law allows anyone residing in the country access to public healthcare.

What is the healthiest climate to live in? ›

  • Portugal. #1 in Pleasant climate. #26 in Best Countries Overall. ...
  • Greece. #2 in Pleasant climate. #25 in Best Countries Overall. ...
  • Spain. #3 in Pleasant climate. ...
  • New Zealand. #4 in Pleasant climate. ...
  • Italy. #5 in Pleasant climate. ...
  • Costa Rica. #6 in Pleasant climate. ...
  • Brazil. #7 in Pleasant climate. ...
  • Argentina. #8 in Pleasant climate.

What is the safest and cheapest place to live in the world? ›

Definitely one of the cheapest and safest places to live in the world, Portugal is very popular among people leaving the US to move abroad. Transportation is very sophisticated and easy to use all over Portugal, and you can travel cheaply around the country by train or bus.

Where can you retire on $2000 a month? ›

You're planning to retire in the not-so-distant future, which means you'll be living on a fixed income.
The Best Cities To Retire on $2,000 a Month
  • North Royalton, Ohio. ...
  • San Angelo, Texas. ...
  • Longview, Texas. ...
  • Florissant, Missouri. ...
  • Des Moines, Iowa. ...
  • Parma Heights, Ohio. ...
  • Baytown, Texas.

What is the cheapest but safest place to live? ›

Augusta, a small city near Georgia's border with South Carolina, is one of the cheapest and safest places to live in the USA. It has a low crime rate and a low cost of living, making it perfect for those looking to live comfortably and save money.

How much does it cost to see a doctor in Panama? ›

Out-of-pocket care is still cheap in public hospitals in Panama, especially when compared to the USA, but it is becoming more expensive. Expats have quoted costs of US$20 to US$30 for a GP visit and of $US60 to US$65 to see a specialist.

What is the income requirement to live in Panama? ›

You must prove that you have a minimum of 1,000 USD monthly income for the rest of your life. Perhaps you do not have a 1,000 USD monthly income but can provide proof of a 750 USD monthly income.

Do expats pay taxes in Panama? ›

Panama Taxation: Is Foreign Income Taxed? Residents and non-residents are taxed only on their Panama-sourced income. Regardless of nationality or residency status, you are not required to report worldwide income for Panama taxation.

Is social security taxed in Panama? ›

Panama Social Security Tax

Employers and employees pay social security taxes when the employee is paid. Currently, employers pay 12.25% and the employee pays 9.75%.

Can I live in Panama for $1000 a month? ›

Another reason that many consider Panama: It's possible to live in Panama for as low as $1,000 per month. However, this is only in very specific cities. It's not a country of rock-bottom prices like living in Thailand or even the affordable costs of living in Mexico.

Is it cheaper to retire in Panama or Costa Rica? ›

If you live in the countryside, you can save vs. the high cost of property and amenities in large urban cities like Panama City. Panama's imported goods are less expensive than Costa Rica's. Both Panama and Costa Rica have a lower cost of living than the US, UK, and other regions.

Where is the safest place to live in Panama? ›

10 Safest Cities In Panama
  • Panama City, Panama.
  • Boquete, Panama.
  • Coronado, Panama.
  • Bocas del Toro, Panama.
  • El Valle de Antón, Panama.
  • Las Tablas, Panama.
  • Pedasi, Panama.
  • Santa Fé, Panamá

How much is rent in Panama? ›

Below is a Monthly Budget Breakdown for Panama City (Two-Person Household):
ExpenseU.S. $
Rent (two-bedroom apartment in a central area)$1,000 to $1,500
Transportation (taxi or fuel/maintenance on a compact car)$75 to $200
Electricity (depending on air conditioning use)$60 to $150
Water (bundled with trash pickup)$0 to $25
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Are bugs a problem in Panama? ›

Panama is a tropical country and does have its fair share of bugs. It is, however, not as bad as you might think, and with the proper amount of protection you will be fine. Sand flies (known locally as chitras), who tend to bite ankles and feet, can be a nuisance on some beaches and are worse during the rainy season.

How corrupt is Panama? ›

Corruption is Panama's biggest challenge. Panama ranked 111 out of 180 countries in the 2020 Transparency International Corruption Perceptions Index. The U.S. and other international investors have voiced concerns about corruption and inconsistent treatment of investors and businesses.

Is Panama unstable? ›

Panama is a peaceful and stable democracy. On rare occasions, large-scale protests can turn violent and disrupt commercial activity in affected areas. Mining and energy projects have been sensitive, especially those that involve development in the designated indigenous areas called Comarcas.

Can you flush toilet paper in Panama? ›

In Panama, they don't flush toilet paper down the toilet. The little trash bin they have next to every toilet is there for a reason and you should use it. Most businesses have septic systems and flushing any materials down the toilet will mean more regularly cleaning the tanks out.

Do they speak English in Panama? ›

About 14% of the Panamanian population is fluent in English, the second most common language in the country. Most professionals and business people speak English, and even rural populations have a reasonable degree of proficiency due to their interactions with tourists.

Is Panama safer than Colombia? ›

Panama is the safest country in Central America and an important trade zone due to its namesake canal. Here's what to know when traveling in the isthmian country. Panama is an incredibly beautiful country that's well worth exploring and it's notably safer than neighboring Costa Rica and Colombia.

What is the freest country in South America? ›

Economic freedom, overall index (0-100), 2022 - Country rankings:
CountriesEconomic freedom, overall index, 2022Global rank
8 more rows

What is the least violent country in South America? ›

Here are the 10 safest countries in South America:
  • Uruguay - 1.795.
  • Chile - 1.84.
  • Argentina - 1.911.
  • Paraguay - 1.976.
  • Ecuador - 1.988.
  • Bolivia - 1.989.
  • Peru - 2.091.
  • Guyana - 2.14.

Which South American country is the happiest? ›

Happiness Index, 0 (unhappy) - 10 (happy), 2021 - Country rankings: The average for 2021 based on 10 countries was 5.79 points. The highest value was in Uruguay: 6.47 points and the lowest value was in Venezuela: 4.93 points.

Why is Panama Good for retirement? ›

Panama's beautiful beaches and warm climate have made it a popular location for Americans to retire in recent years. While this means you'll likely be able to find some fellow American retirees to befriend, simple economics means that the influx of American immigrants has resulted in a rise in the cost of living.

Why is Panama a good place to live? ›

The place is an all year hotspot that offers a variety of different activities for people to partake in such as arts, entertainments, fishing, and sports. In addition to these, Panama City provides people with affordable housing and a friendly environment to raise a family.

What is the best country to live after retirement? ›

Best Countries for a Comfortable Retirement
  • New Zealand.
  • Switzerland.
  • Spain.
  • Portugal.
  • Australia.
  • Canada.

What are the advantages of living in Panama? ›

Cost of Living

Besides, Panama has some of the lowest inflation rates in Latin America – under 3%, and the dollarized currency helps keep a stable banking and commerce system. Those who retire in Panama also enjoy multiple benefits such as discounts on food, airfares, prescription drugs, or hotel.

How much income do you need to retire in Panama? ›

To acquire the retiree residence status in Panama, you have to prove a monthly income or pension of $1000 for life. For each of your dependents, that figure is $250.

What are some problems in Panama? ›

However, corruption and impunity are serious challenges, affecting the justice system and the highest levels of government. Discrimination against racial minorities is common, and Indigenous groups have struggled to uphold their legal rights with respect to land and development projects.

How much is a maid in Panama? ›

Hiring a maid to do the housework is popular among capitalinos (Panamanian Panama City dwellers) and expats alike. A full-time live-in maid costs around $250 per month, whereas as-and-when visits for quick cleans or cooking meals are usually priced at around $15 apiece.

Which country has the best climate to retire? ›

1. Panama. Not for the first time, Panama tops the list of the world's best places to retire. Located away from Central America's hurricane belt, its warm tropical climate is tempered by breezes from the Pacific Ocean on one coast and the Caribbean Sea on the other.

Where is the safest and least expensive place to retire? ›

Below, you can review our list of the top ten cheapest countries where you can retire well.
  • Malaysia. ...
  • Spain. ...
  • Costa Rica. ...
  • Panama. Cost of Living Index: 48.25. ...
  • Peru. Cost of Living Index: 30.74. ...
  • Slovenia. Cost of Living Index: 47.30. ...
  • Austria. Cost of Living Index: 64.11. ...
  • Australia. Cost of Living Index: 72.27.
1 Oct 2022

Is it better to rent or buy in Panama? ›

Renting real estate in Panama is big amongst expats, and the market is hot in practically all areas of the country. In fact, even if your plan is to buy real estate, we recommend renting first to get a feel for your area and the lifestyle of living in Panama as a whole.

Do you pay US taxes if you live in Panama? ›

Americans living in Panama, or in any other country, must file US expat tax returns each year. The US also requires that you include all worldwide income on your expat tax return, including any income that is also subject to tax in Panama.

Where do most expats live in Panama? ›

Boquete, Coronado, and El Valle de Anton are the three most popular expats destinations in Panama, partly because each of these cities are easy places set up an expat lifestyle.

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