July 2013
Listen in below.
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Us: Hello, this is Betsy and Reyn, with Living in Panama,
and today we are talking with Leif Simon about the cost of living in Panama.
Hi Leif, it's Betsy and my husband Reyn.
Lief: How are you doing?
Hi Reyn.
I'm good, how are you?
Us: Leif is not only an authority on Panama, having lived in Panama City, with his wife Katherine Peddicord,and their two children for the last several years,but he is an international real estate expert.
Welcome Leif, to Living in Panama with Betsy and Reyn!
Lief: Thank you guys, I'm happy to be here.
I think one of the reasons people often think about moving to Panama, is because they hear that it has a really low cost of living.
Some people couldn't afford the lifestyle they'd like to become accustomed to in the United States or Canada,or other places, are starting to think about Panama.
Us: What are your thoughts about the cost of living in Panama?
What generally do you think you could live on, and what kind of lifestyle would that give you?
And is it true that it's more affordable?
Lief: Yeah.The cost of living conversations that we have with people that vary in the gambit.
You can live off of your social security in Panama.
Us: What does that buy you?
Lief: It can buy your a beach lifestyle,like what you guys have in Puerto Armuelles,
where you can live off maybe $1000, $1200 a month.
That's not going to be luxurious,but where in the U. S are you going to live on the beach on $1200 a month?
So, you know, people come from Iowa, say,"Oh Goodness, Panama City is so expensive!"
Well, of course it is, if you're coming from Des Moines,it's going to be more expensive.
If you're coming from the West Coast or the East Coast,or any major city in between,
Panama City is going to be likely less expensive.
And you can live inexpensively in Panama City.
We know a guy, it's been a couple years since I have spoken with him, but he was living
here on his social security, and it was less than $1000 a month.
Us: Wow.
Lief: Biggest portion went to his rent, he was renting a house in a decent neighborhood, not one of the high end neighborhoods, but a decent,local, safe neighborhood for $650 a month,and the rest of it went to food.
He didn't run his air conditioner 24 hours a day, and he didn't have a car, but he was happy.
He walked and it went around by taxi and bus, and he was living on less than $1000 in the city.
On the other hand, you can spend as much as $5000 a month in a high-rise apartment,
overlooking the ocean.
You're budget can go to the extreme the other way in the city as well.
But overall, I think most places, if you're in that $1500 to $2000 a month budget range,
you can have a great lifestyle in lots of areas in the country.
Us: It sounds like if you bought property right, you had your own house, if you had the capital to do that, then you'd have even a lot more money to spend on living expenses.
Lief: Absolutely, and that's when we talk about budgets,we try and separate housing, because housing can be whatever you want it to be.
It can be a one bedroom, small, little apartment, or it can be a five bedroom,
two million dollar house.
Take that part [housing] out of it, and then you're looking at the cost of food for example.
And food costs in Panama are goIng to be less.
Unless you're buying the processed foods that they ship in from the U. S, in which case they are going to be the same or more.
So, you have to make a bit of a shift in your expectations if you want to save a lot of money.
But you can have all the comforts at home in Panama as well.
Us: For more on the cost of living in Panama, please click the link below.
Thanks for watching!
Start here for more information on cost of living in Panama.
July 9, 2013
I was leaving for the States in a few day, so I needed to attend to it immediately.
I went to a private clinic in David Panama, the Mae Lewis Clinic. It is a more expensive option, but it is usually fast, which is what I needed.
I arrived at the clinic with no appointment. I was ushered into to see a doctor within 15 minutes. 10 minutes later I was getting my ankle x-rayed. 10 minutes after that I saw a specialist. Turns out my fears of rheumatoid arthritis or some chronic condition, were groundless.
My ankle was infected.
I had a few infected cuts on my leg, and those infections had settled into my ankle. I didn't even know a joint could get an infection that way.
The English-speaking specialist (whose dad was from Seattle via Norway) said the infection had settled into my ankle because, as the x-ray showed, my ankle had incurred much trauma over time. I remember many of those traumas. They were inflicted by forwards trouncing on my feet and ankles during my years playing soccer as a full back.
Prescription: antibiotics, which I picked up at the clinic's pharmacy
Total time spent at clinic : 1 hour
Money spent: $30
My husband talks about 2 recent visits to the hospital in Puerto Armuelles, Panama
Learn more about health care in Panama
If you are thinking of getting health insurance, visit this post to learn about Panama's health insurance options.
Still deciding if you will be happy in Panama? Take our quiz to find out.
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Basically, it takes 5 and half months before the banana plant "gives birth" to the banana fruit.
Then it takes about 2 weeks for the bananas to fully grow.
To help them ripen and protect the bananas from insects the bananas are covered in a plastic bag, while still on the tree, for about 90 days.
Chiquita used chemicals and fertilizers on their banana plants. However, they are not necessary.
We have many banana plants in our yard and we never use chemicals or fertilizer.
In the video, you can see two ways bananas grow.
Updated: Nov. 14, 2017
This Summer Prove To SSA You Are Alive - Or Else No More SSA ChecksAnd you need to do it every 2 years.
That is how often the US government requires a Proof-of-Life" response from every social security recipient.
Otherwise they will stop your Social Security payments.
FYI, the official name of the "Proof-of-Life" requirement is the Foreign Enforcement Questionnaire.
However, the US Government will only send you this vital Proof-of-Life request if you have an "Acceptable Address".
If you live overseas, what SSA considers an acceptable address is strictly defined.
If you live in Panama, you must provide SSA with your mailing address in Panama. This is true even if your checks are direct deposited into a bank located in the US.
SSA's requirements for an acceptable address:
Note: These requirements are the same regardless of the country you live in. You must provide SSA with your mailing address in that country. In the example above, the country is Panama.
If you haven't provided SSA with an "acceptable address", you need to change your address.
Which means you need to fill out Form SSA-21. Send Form SSA-21 and your passport to the Federal Benefits Unit (FBU) of the US Embassy in San Jose, Costa Rica. For more information on changing your address, visit the US Embassy's Federal Benefits page.
The FBU will inform the SSA of your new Panama address.
You must do this if you want to receive your Proof of Life form/questionnaire.
You must return the questionnaire to SSA by December. If you don't respond in time, your Social Security benefits will be suspended.
That is, you will not receive your Social Security check starting in February or March.
Don't worry. Even if your checks are stopped, you will get all your SSA checks. Unfortunately, it may take some time to restart your checks and receive your back payments.
Go to the "Contact FBU" section below, to learn how to let the FBU know you didn't get your SSA check.
The Regional Federal Benefits Unit (FBU) of the US Embassy in San Jose, Costa Rica is now responsible for providing Federal Benefit services to US Citizens living in Caribbean, Central and South America countries.
Which means if you live in Panama, the Federal Benefits Unit of the US Embassy in San Jose, Costa Rica is your "go-to" place for questions about your Social Security benefits (as well as Veterans' benefits and more).
For more information on their services and how to contact them, please visit their webpage. Tip: the best way to contact them is by e-mail:[email protected].
For comprehensive information on SSA’s services abroad, please visit SSA’s Service Around the World.
You will receive your Proof of Life questionnaire every other year. The questionnaires are mailed out in May.
Which year you get it depends upon your social security number (SSN):
If you are 90 years old or older, you will be sent a Proof of Life request every year.
Again, the SSA sends out the questionnaire in May. If SSA does not receive your completed questionnaire by September, it will send out a follow up letter in October.
You must return your proof of life form to SSA before the end of the year.
If August comes and you still haven't received your Proof of Life questionnaire, you need to take action immediately.
You must contact the FBU (see below) ASAP. Part of the mission of the FBU is to help US Citizens receive their SSA payments.
The Federal Benefits Unit in San Jose operates on an appointment-only system.
To tell the FBU about your "lost" SSA check, schedule an appointment, or to ask questions, contact them via their online inquiry form.
They don't promise a speedy reply.
On their webpage they state, "We normally respond to e-mail inquiries within 15-working days." By email inquiries, they mean inquiries made via their online inquiry form.
You can also send the FBU a letter or fax them. The FBU in San Jose, has both a Costa Rica and a USA mailing address. To get those addresses and their fax number, go to their webpage here.
Although the FBU does not provide a phone number, you can call the US Embassy in San Jose, Costa Rica. Their phone number is (506) 2519-2000. (506 is the country code).
There is also an office to help US citizens living overseas or planning to live overseas with their SSA benefits.
It has a very dry and bewildering name: Office of Earnings & International Operations (OEIO).
You can visit OEIO's website here.
Check out this post on whether expats need to pay into ObamaCare.
Then we dropped down to David to do some shopping before heading back home to Puerto Armuelles.
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Have you been zip lining before?
"The hardest thing in the world to understand is the income tax" - Albert Einstein
Reyn and I are not trying to hide. In fact the thought of being targeted by the IRS puts my guts into knots.
I really want to play by the rules, but of course, I don't want to pay more taxes than are absolutely necessary.
We went to Panama City on Tuesday to meet face-to-face with a couple of tax accountants who specialize in helping US citizens who live in Panama.
Okay so maybe we didn't need to meet with 2 accountants over 2 days, but we wanted more than 1 perspective on the recent changes. It was an enlightening experience.
NOTE: We met with one of the accountants near the statue of Einstein's head in Panama City (see the photo above). Even Einstein had a hard time understanding tax law, and I imagine it was alot simpler back in his time.
The difference for US citizens is that the IRS is in hot pursuit.
Most other countires might have laws saying their citizens must pay taxes even while abroad, but they aren't willing to pursue the matter.
Lots of expats in Panama want to live "under the radar". In many ways that is possible here. The cash economy thrives in Panama. Paying for things - even very large ticket items - in cash is the norm. Panamanians generally prefer it. Unlike the US where some places won't even accept cash.
Very few things are computerized here. Unpaid bills don't haunt you in Panama. They just disappear. There is no local financial tracking system, or any kind of tracking system. Well, except for immigration - but even that is limited by location.
Neither is true anymore.
The Organization for Economic Cooperation and Development (OECD) has been exerting more pressure on "grey" countries. They are increasingly saying to countries that if you want to play with the big boys in the world market you need to play by the rules.
OECD has been targeting tax havens, putting countries on black, grey, or white lists depending upon whether they exchange information with other nations for the purposes of tax reporting, regardless of domestic bank secrecy laws
In April of 2009, Panama was put on OECD's "grey" list.
These countries, and more, have now all complied with OECD's Article 26 standards regarding information exchange.
Panama was conspicuously absent from the list. This is true no longer.
Panama has enacted a number of transparency rules, including a new law that requires reporting the names of the share holders of its many corporations.
So all you folks who are "hiding" under a Panamanian corporation or private Panama foundation, beware. Of course, if you are an American, you were always required to report any "bearer" or other shares you hold in a Panama corporation or foundation to the IRS. But now, it is much easier for the IRS to discover if you participate in a Panama corporation or foundation.
Many Panama lawyers, either won't tell you this, or don't know about this new tax implication.
Do yourself a favor. Make sure you don't just talk with a lawyer, but an accountant who knows the tax implications both in Panama and in the US (or in your country-of-origin).
Okay, back to the OECD and Panama.
This means that Panama has signed information exchange agreements with at least 12 major countries.
The most far reaching agreement they signed was with the US government.
World-wide the US has become very aggressive in seeking out expats who aren't paying their taxes - no matter where they live. There really is almost no place to hide from the US tax-man anymore.
In 2011, Panama officially said "uncle" to the revenue-starved US. Panama agreed to grant bank account access to IRS agents - but only if they have a US-issued warrant in hand. This is similar to the agreement european and other countries have with the US for information exchange.
As part of that agreement, starting in 2014, Panama has to report any bank accounts over $50,000 to the US. The Panama banks are very scared of stepping out of line with this new agreement so they aren't waiting for 2014. They have already started reporting these bank accounts.
While these changes feel very much like Big Brother breathing down your neck, unless something changes with OECD or US Tax law it is a new global reality.
Compared to most other places, Panama is still an excellent choice to live, work, and invest
Panama is also a very easy place to set up a corporation.
If you have an off-shore business, for instance an on-line business, you can easily and quickly set up an off-shore corporation in Panama.
For your business to qualify, you must have:
You can have your office in Panama and do all your work in Panama, but your clients cannot be Panamanians.
An off-shore corporation gives you great tax freedom.
You not only don't pay taxes in Panama, but you can also qualify for a huge income tax exclusion in your home country.
For instance, if you are a US Citizens you can legally exclude the first $95,000 you earn "off-shore".
This is available to all US citizens if you live outside the USA for "at least 330 full days during any period of 12 consecutive months".
However, if you are a legal Panama resident and own your own home in Panama, you get the exclusion no matter how much time you spend in the USA.
To get this exclusion, you must file a 5471 form as part of your US taxes each year no matter how much or how little you earn.
Until next time,
Betsy
March 23, 2013
David Fair A Good Place To Look At Cows & RelaxThere are many many cows on display.
Awards are given for the largest cows and bulls.
With steady climb in cattle prices lately the owners of these cows are feeling very wealthy.
Not only are cattle prices increasing but the agricultural land that they graze on is also going up in price. However, the price of cattle is not the main reason for the increase in agricultural land prices.
The quest for land for palm oil plantations is fueling the price increases. Many investors are looking to make money in the soaring palm oil trade, especially now that your trees can produce oil in 2 to 3 years instead of the former 7 years of the older and taller oil producing palm trees.
Horses and equestrian events are also popular at the fair. It is a good place to be a cowboy.
There are not only displays of all the agriculture in Panama, but many vendors of all sorts of flowers and plants. It is a good place to get a wide variety of plants for your yard and vegetable garden.
The Fair is also a great place to visit for crafts of all sorts. Panama is not a place overflowing with crafts. However, you can find them at the fair. Crafts, paintings, hammocks, hand made chairs, and more are for sale at the David fair. In fact there are so many vendors this year that all the rides were consolidated across the street from the main fair.
Of course, a fair has to have rides. That is the main reason my children clamor to go to the fair. There are also rides on ponies and cows for young children . If you want to go on the rides, keep in mind that the rides don't start until late in the afternoon.
There is also a place to view a wide variety of animals and birds, not just those that live in Panama. The fair used to have 3 ostriches on display. Those have "disappeared" in the last 2 years. There are also lots of animals native to Panama on display like margays, and a variety of tropical birds.
Technically the fair is over on Sunday night. However, if you are looking to buy plants you can usually do so on Monday morning.
Oh, there is also alot of music at the fair. It is a party every night of its 10 day run. We usually leave before the partying starts but for many that is when they arrive.
It costs $2 to attend on the weekends, $1 if you are retired Admission is free if you are under 8 years old.
The David Fair is definitely worth a visit.
What Is The Deal WIth Panama's Pensionado Visa?
In particular, there is a lot of glowing prose written about Panama's Pensionado Visa or Retirement program.
In this post, I will delve into Panama's Pensionado Visa program
This retirement program offers many cost-saving benefits
Panama guarantees your Pensionado status.
Panama has pledged to grandfather in the rights of Pensionado residents. This means that even if Panama changes its laws regarding the Pensionado visa in the future, your status will never change!
In other countries, new laws have affected the status and perks of long-time ex-pat retirees.
It is obvious that Panama wants retirees to choose to live here. The country even makes it easy to bring your pet to live with you.
Yes, the benefits are good, but...
It may not be as wonderful as the over-the-top enthusiastic reviews of the program make it seem.
The list of cost-saving discounts above is not as rose-colored as it sounds.
It is a wonderful program, don't get me wrong.
For instance, pensionados here in Puerto Armuelles only pay $3.89 a month for water. Granted, without a discount your water bill is only $7.10 a month. But still, it all adds up.
I simply want to inject a dose of reality into the wonders of Panama's retirement discussion.
You don't need to be over 55 or 65 to qualify.
There is no minimum or maximum age.
It normally takes 6 months to get the fully approved visa once you submit the application with all the documentation. However, you are issued a temporary visa immediately upon submitting your application.
It usually costs from $1500 to $2000 per person to get this visa. This includes lawyer fees. You can sometimes get a discount if you submit the applications for your dependents or spouse at the same time.
You will also need a boatload of documents. All the documents will need to be certified, authenticated, translated, etc...
I will outline all those requirements in a future post.
Yes, you can.
All Panamanian retirees can enjoy the retirement perks of the Pensionado visa.
This means that if you are of retirement age—60 for men, 55 for women— you can enjoy most of these Pensionado Visa discounts. It doesn’t matter which type of residence visa you are granted.
So again. As long as you are a legal resident of Panama - and of retirement age - you can get the same discounts on services that Pensionados enjoy.
Want to know about other Panama residency visas you may qualify for? Check out this post for 3 other visa types.
Skylar woke us up to see a spectacular sunrise. The visiting horses didn't bother to look up.There is no Winter, Spring, Summer, or Fall It’s always about the same temperature. You don’t need much of a wardrobe; In fact you hardly need anything at all.
Because life is reduced to its basic elements, one quickly falls into a routine here. You might think that it would get boring. Yet, somehow there are lots of little “extras” to keep things from becoming tedious.
For instance, yesterday my eleven year-old daughter woke up and was so excited. She came running to alert the family. We had to get up and see the sunrise. The morning sunrise was the most spectacular red that any of us had ever seen before.
This morning when I awoke, I was greeted by the neighing of a small “herd” of the neighborhood horses. They looked up from their grazing to give me a little “nicker”, as if to say “good morning”. Wow!, I thought, the new foal is really getting big.
As I write, the birds are beginning to warble and chirp in the trees, and the huge flock of parakeets that swarms around the neighborhood every morning like a squadron of miniature emerald green fighter planes on patrol, is just warming up its engines.
From the forest behind our neighbor’s house, I can hear the grunts and guffaws of a family of howler monkeys. They have broken their slumber and are getting on with the day’s tasks.
As with much of life in the tropics, the monkey's “to do list” is quite easy to remember: Eat bananas, sleep; Eat papaya, sleep; Eat mangos, sleep….etc…etc…etc...
A few mornings ago, I had one of my most unusual, even frightening, adventures. It happened in the midst of a perfectly routine morning.
Most mornings, while the family is still asleep, I tip-toe downstairs, have my tea while listening to all the morning sounds. Then I drive the ten minutes to our favorite beach for a swim.
I find swimming slowly on my back, looking up at the morning sky to be the perfect meditation. Generally, there are gulls and pelicans dive bombing schools of sardines just offshore. Far, far above, practically touching the quilted tufts of clouds, can be seen isolated silhouettes of frigate birds, dense black construction paper cutouts, against a soft pastel sky of gentle white and blue.
I usually ignore the feeding birds nearer the sea, instead focusing my eye, and my mind, on the more “distant deeps and skies”.
On this particular morning, I was in my “zone” steadily stroking along the beachline, eyes fixed far overhead. The waves were quite small, so I was swimming close to shore, in water barely waist deep.
Out of the corner of my eye, I caught site of a black shape on the water, not too near. “Pelican” registered my mind. But something in me had already registered that it was definitely not a pelican. It was too sleek. It was too sinister feeling.
…. To be continued….
