The first in a series of articles comparing Central America’s two leading expat and retiree destinations. Costa Rica is the more established of the two, but Panama is the upstart new kid on the block with a full head of steam and a pocket full of dollars. Who will come out on top? Read more and find out.
Click here for Round 2: Climate
Click here for Round 3: People and Culture
Click here for Round 4: Things To Do
Round 1: Retirement Benefits
There’s no debating the fact that a country’s economic benefits offered to retirees play a huge roll in their ability to attract foreigners. The decision to move from the U.S., Canada, or Europe to a far away land is a major life decision, and whoever wins the battle of the benefits will likely have a one-up on the competition. In this article the retirement benefits for foreigners offered by Panama and Costa Rica will be examined and a winner declared. Remember, these are perks offered by the government and not benefits resulting from just living in a different country, i.e. cheap housemaids or electric bills. Nor do these benefits include tax breaks on real estate available to both expats and retirees; that will come later. Round one, begin!
–Pensionados (retirees with pensions) only need to have a $600 USD pension per month to qualify for retirement Visas. These must be renewed every year and proof must be presented that $7.200 USD was changed into Costa Rican currency ($600×12 months).
–Anyone over the age of 45 can apply for retirement resisdency
–Costa Rican health care is not only affordable, but widely available to retirees from other countries
–No taxes on retirement income
–Foreigners living in CR do not have to pay taxes on money earned abroad
Unfortunately, many of the benefits that made Costa Rica such a retirement haven in the 80′s and 90′s have now been removed, such as advantageous car importation, as the country established itself as the prime destination for retirees.
–Pensionados need to prove a $1000.00 USD monthly pension to qualify for retirement residency. This Visa is indefinite but must be renewed every year.
–A wide array of public discounts, up to 50% off, including: movie theaters, sporting events, hotels, pharmacies, medical visits, restaurants, cultural events, and utility bills
–Tax exemption to import a car every 2 years
–Tax exemption to import household goods (up to $10,000 USD)
–Certain loans, both personal and commercial, will be exempted from taxes
–NO property tax if it is the retiree’s only property, foreign or domestic
–Discount on the closing costs of commision loans
Round 1 winner: Panama. Honestly not much of a contest here. Panama, being the less developed of the two in terms of retiree and expat havens, is literally throwing the kitchen sink at prospective gringos. Conversely, Costa Rica has removed some of its benefits and cannot match the discounts Panama offers in the public sphere; being retired in Panama City must be like having the world’s biggest damn coupon book in your hand. Add to that the ability to bring in your car tax free (in Costa Rica the costs are insane) and Panama takes this round handily. However, the $1,000 USD pension does make Panama lose a few points.
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