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"Retirement: Why Panama Is the New Florida: Panama's quality health care, low costs, and proximity to the states are attracting American professionals as a retirement haven."
Business Week, July 13, 2009
According to this Business Week article, Panama is the place to look at for professionals looking for a comfortable retirement on a moderate budget.

Why?

In Panama, you will never feel too far from home
When you stay for extended periods of time in another country, you want to feel away from it all, but not totally. Its important to have the familiar services and comforts of home within easy reach- no other country in the world fits that bill better than Panama. Why? Because Panama has always been a crossroads for foreigners and Panamanians have a foreigner-friendly mindset. It also, more than any other country in the region, has a modern American-style infrastructure, and business sector.

Panama is Safe
Panama has the lowest rate for crimes against tourists in the region. In Panama City, the petty street crimes that hinder tourists in other countries are uncommon. Like every big city — there are some neighborhoods to avoid, but in general with tourism activities , you can go about Panama City without worrying. This is true for the rest of the country with a few exceptions.
Many top US and international companies are now making their regional headquarters in Panama because it is safest country in the region.

An American-Style Infrastructure- By-product of an Historical Relationship
One of the best things about living in Panama is the American-style infrastructure. 50,000 Americans made their home in Panama until 1999 when Panama took control of the Panama Canal region and they left their mark. Panama also has a long history as a crossroads for Europe. Panama has a distinct, delightful Latin-Caribbean culture, but you will feel at home because American and foreign influences abound.

A Foreign Investor and Retiree-Friendly Government
Panama has the best retiree benefits plan in the world and also an investor-friendly government. Panama has always been about business. President Martinelli is one of the countries most successful businessman and is implementing important changes needed to attract investors and retirees. One of his goals is to make Panama "the best place to do business in Latin America." Helping to ease working with Panamanians, you will find many in the entrepreneurial class are US-educated and readily understand and know how to work with foreigners.

The Panamanian People are "Globalized", Peaceful, Friendly and Fun-Loving
Another reason why Panama is a great place to live is because of the Panamanian people -one of the friendliest peoples in the world. Due to Panama's position as a world business and transportation crossroads there's a long history of living and working with foreigners. Different from most countries, Panamanians actually enjoy foreigners. There's a saying that Panama was "born globalized". Historically a crossroads, Panama is home to immigrants the world over. The different communities comprised of different nationalities and races have get along amicably Like most Latin American countries most common are "mestizos" or persons who are a combination of European and Indian origin. But there is a large black population, descendents of people that originally came to help with the construction of the Canal. European, American, Chinese, Jewish, Hindu and Arabic communities also have a strong presence. And in Panama all these different peoples know how to get along.

Panamananians are also fun loving. Parties are a national pastime. They also have a predilection for beauty and elegance. This sense of beauty is visible in many ways, from the delicacy of their Indian handicrafts, to their beautifully groomed women and Panama City’s many well appointed neighborhoods.

Panama is Close
Located in Central America,Panama is easy to get to. It is just 3-5 hours by plane from the States, there are non-stop daily flights to Miami, Atlanta, Houston, Dallas, Newark, Los Angeles, New York, Washington D.C., Orlando and Fort Lauderdale served by Delta, Continental, American,Copa and Spirit Airlines. From Europe, KLM has 3 directly weekly flights. From Canada, AirTransat has a weekly Charter flight out of Toronto and Copa recently announced direct flights from Canada soon.

The Dollar as the Currency: A Great Convenience
Panama has the US dollar as its currency, a great convenience. This makes daily life much more hassle free for visitors and foreign residents. No need to constantly figure out how much things cost. The dollar as currency is also major contributing factor to the fact that Panama has the lowest inflation rate and the most stable economy in Latin America.

Dependable Travel in Panama-Roads, Highways and Public Transportation
Travel within Panama is dependable and inexpensive. Taxis in Panama City are cheap and reliable. You can go just about anywhere for less than $5. If this is your first trip we don't recommend driving in Panama City because of the lack of signage.
Outside Panama City, the highway system and the feeder roads off the main highways are excellent. If you are renting a car, the Interamerican highway that goes from the border of Costa Rica to Panama City is a four-lane highway most of the way.
If you aren't driving, for $15 or less you can travel across the country on a luxury bus from Panama City to anywhere.
Inexpensive First Class Health Services and Medical care
One of the main reasons many Americans of retirement age are deciding to live in Panama is because both health insurance and health care very inexpensive in Panama and also in general excellent.
More than any place in Latin America, you can readily find English speaking trained doctors and dentists. There are several hospitals with the latest in diagnostic testing and services. Prescription and over, the, counter medication is available at low prices. Full coverage health insurance policies are very reasonably priced for any age.

Another big health plus is that you can drink the tap water, a rarity in Latin America. Sanitation is good... the "Montezumas revenge" illnesses that tourists are prone to in other countries of Latin America are almost unheard of.

Shopping
Panama has the best shopping in Latin America. Starting with the supermarkets- Riba Smith, El Rey and Super 99 stock just about everything you would find in an American supermarket but at lower prices. There are three Price Costos in Panama City and one in David in Chiriqui. ((They're called Pricesmart here)
Panama City has four major shopping malls: Multiplaza in Punta Pacifica, Albrook Mall and Multicentro on Balboa Ave and Metro Mall near the international airport. There are large electronic, appliance, computer and furniture stores with familiar brands and prices the same or better than the USA in each mall.

High Speed Internet and Services
Panama is a so-called developing country but high speed internet access is better than in the USA. Phone service and other basic services are also reliable - unusual for Latin America.

Great Restaurants
Foreign residents really enjoy the restaurant scene. As an international crossroads, Panama City has many fine, reasonably priced restaurants with a wide variety of cuisines. It’s fun just trying to decide where you're going to dine. If you’re homesick, American restaurants and fast food joints are everywhere including TGIF, Bennigans, Wendys, Pizza Hut, KFC, Subway, McDonalds, Burger King etc.

Banking Conveniences and a Strong Financial Services Sector
ATM machines providing access to your USA bank account are located throughout Panama City and in many locations outside Panama City. Panama has a sophisticated banking sector with one hundred banks, including Scotia Bank of Canada which caters to foreigners. If you are looking for offshore activities there are specialists who can provide personal or corporate services with strong financial privacy laws and no taxes on offshore profits.

Schools
Families with children will find a number of excellent private schools to choose from. Most foreign capitals have just one American accredited school, but Panama has three: The International School of Panama, Balboa Academy and the Oxford International School.

Variety of Residential Venues to Choose From
The three most popular places for homes are Panama City, the beach areas and mountains. With the worldwide economic crisis prices are coming down especially for condos in Panama City. Prices for beach and mountain venues decline less because Panama is a small country fast becoming a regional business hub and there are only so many prime locations. On the beaches, choose from beachfront lots, homes and condos on both the Pacific Ocean and the Caribbean. Panama’s mountain areas like Boquete, Volcan, Sora and El Valle offer perfect all-year-round spring weather.

Architectural Variety
Unlike any other country in Latin America, Panama has refreshing variety of architecture styles. In the rest of Latin America, Spanish colonial dominates while in Panama there's a refreshing variety of modern, Spanish colonial, American, French and English styles.

The Best Retiree Benefit Program in the World
The Panamanian government actually encourages retirees to retire here with a program with many benefits and discounts. To qualify for a retiree visa the only requirements are a proven monthly income of $500, a health certificate, and a police report.

Some of the benefits for retirees:

• 50% off entertainment including movies, concerts, theater etc. (a regular movie ticket costs $4 - the retiree price is $2.)
• 25% off restaurants
• 50% off hotel accomodations Monday, Thursday
• 30% off bus, boat and train fares
• 25% off domestic and international airline tickets
• 10% off prescription medicines (much cheaper than US prices to begin with)
• 15% off dental and eye exams
• 50% off closing costs for home loans

Foreigners who purchase property in Panama enjoy all the same rights as Panamanians
Unlike other countries, in Panama foreigners who buy property enjoy all the same rights and protections as Panamanians.

Some Caveats About Living in Panama :
Living in Panama is not for everyone. If you are coming here because your company has set up here- you're just plain lucky- for international families, there's simply no better place to live in Latin America and the Caribbean.
If you are coming here to retire or start a business, you should consider whether you have the temperament to enjoy a foreign culture that is not yet first-world.
If you are a Type A- Panama is probably not the place for you. This is still a third world country in some ways and at times things do not go smoothly. Furthermore, you need to be able to enjoy cultural differences and be able to put up with bureaucratic hassles and third world glitches.
Also, if you are on a very low budget- say less than $2000.00 a month- Panama is not the place for you. Panama is no longer a low budget place to live. It does cost less to live here in style than in the States-but you need a minimum income- in our opinion of $2000.00 a month.
Finally, if you are not willing to learn at least some basic Spanish, think twice also about living here. Yes- educated classes generally speak English- but the majority of people speak no or little English. How will you communicate with your maid, plumber, car dealer etc. if you don't learn some Spanish?

Beware: When Buying Property Do Your Homework about the Developer,Your Realtor and Your Lawyer
When buying property, condos or homes, it is very important that you ask around about the reputation of the builder-there are some who do not have a good track record and people are unhappy with the final product. Also, Only hire a law from a recognized firm or one with impeccable recommendations from people you know well personally. Stories of people have been cheated by a "wonderful Panamanian that is opening doors for me and showing me everything" are not uncommon.