Today was the first day of the monthly ARCR seminar for potential retirees. I always make it a point to chat with other lecturers about current trends in Costa Rica and the rest of Central America. I was talking to Charles Zeller who is an expert on moving household goods from the U.S. to Costa Rica for those who choose to retire here. Somehow we started to talk about Panama since Charles has also had a lot of experience moving people there.

The people and companies who promote Panama always make a point of talking about the incentives the country offers retirees. According to the law retirees are entitled to many discounts on a variety of services and products including some tax exonerations on certain items. However, Charles told me that “all that glitters is not gold.”

In Costa Rica a retiree’s household good and imported automobiles are taxed according to established rules and percentages. Charles point out that this process is arbitrary in Panama and a lot of retirees end up paying much more in taxes than they would have paid in Costa Rica despite all of the incentives the Panamanian offers. This came as a complete surprise to me.

After the U.S.military officially pulled out of Panama ten years ago the government began to promote tourism and retirement in order to make up for the sudden loss of revenue. So, they began to offer attractive incentives to draw Baby Boomers to the country. As you can see from the above they are not as attractive as they appear to be.