Why This Tiny Country Is Always the Winner of “Best Place to Retire” Rankings

It just topped International Living's annual Global Retirement Index for the 11th time

Panoramic high angle view of Panama City, high buildings against blue sky, in front blue sea. Panama just topped International Living's Best Places to Retire 2022 list.
A panoramic high angle view of Panama City, Panama.
David Shvartsman / Getty Images

Great weather. Strong economy. Excellent healthcare.

Oh, and special benefits and savings if you’re 55 (for women) and 60 (for men).

That’s why Panama has once again topped InternationalLiving.com’s The World’s Best Places to Retire, now on its 31st edition. The 2022 list puts the Central American country on top for the 11th time.

Aimed at North American expats, the annual rankings are crafted via a network of on-the-ground editors and global correspondents, who utilize their own experiences and a series of statistics to compile the list. Cost of living, housing, healthcare, retiree benefits and climate are all taken into account. These stats are then used to profile 25 “safe, good-value destinations beyond the U.S. or Canada,” with a focus on places where a retired couple can live a comfortable life on as little as $2,000 a month.

And yes, the ongoing pandemic has changed the list a bit, but also changed the perception of retirement. “Three million baby boomers retired early in the pandemic,” notes Jennifer Stevens, International Living’s Executive Editor. “Some of whom have enough to retire comfortably and so took that early retirement voluntarily. But others of whom weren’t prepared to stop working so soon and now are worried about their nest eggs holding out. [Plus] millions more people lost their jobs or were furloughed. And then you bring the ‘Great Resignation’ into the mix. The upshot is that people—in huge numbers—are finding themselves at a crossroads.”

International Living Global Retirement Index 2022
International Living Global Retirement Index 2022
International Living

A deeper look at this year’s list:

Panama came in first. “[It] offers you a modern, First World environment with all the comforts of home,” as the publication writes. Some other benefits you might not be aware of outside of climate and safety: No taxes on foreign-earned income, low property taxes and a pension program (even for foreigners, and starting at the age of 55 for women and 60 for men) that offers generous benefits on travel, dining and healthcare. It also finished above 80 points (out of 100) in all 10 categories that International Living uses to help create its annual list — the only country to do so. Plus, you don’t have to wait for retirement; invest over $200,000 in real estate, and you’ll automatically get a “Friendly Nations” visa.

Last year’s winner Costa Rica slipped to second, but it topped the rankings for healthcare. The country tops the world for life expectancy and the national healthcare system (“the Caja”) is considered one of the 20 best in the world. Plus, there are several other private options that are significantly cheaper than in the U.S. (even simply paying out of pocket is as little as one-fifth the cost as it is in the U.S.).

Top regional picks? It’s obviously Panama for Latin America, while Thailand tops the list for Asia and Portugal for Europe.

If one category is more important than another to you, you may want to consider Vietnam (cost of living), Portugal (climate) or Mexico (ease of fitting in for North American ex-pats). Mexico and Panama were also highlighted for places to invest.

That said, you may want to avoid Vietnam unless you meet some recently and suddenly revised resident criteria. “In May 2021, the government suddenly announced that people who had business visas but did not have verifiable Vietnamese business sponsors would need to leave the country immediately,” as International Living notes. “As a result, tens of thousands of long-time retirees and others living in Vietnam who were not working directly for Vietnamese employers suddenly found themselves facing deportation.”

Not making the list but up and coming? Greece, the Czech Republic, Albania and, in particular, El Salvador (“Less than three hours from the U.S., with unspoiled landscapes, tropical weather, and low, low costs.”)

Finally, what about staying in the United States? Certainly a possibility, but you’re not getting your money’s worth. As the magazine asks, “Is it possible to live in the U.S. on a budget of, say, $24,000 a year? Yes — it is, just, possible. But you won’t be living a stone’s throw from the beach. You won’t have funds to eat out two or three times a week. You won’t have money left over to travel. You might have a roof over your head, and enough to eat. But you’ll be living a pretty bare-bones lifestyle.”

Which really isn’t how we want to retire.

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