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Panama - Retiring

Workers in Panama qualify for the state pension by making contributions from their salary to the social security fund. Contributions are not taxed and the amount that they can expect to receive when they retire is between 60 and 70% of their average monthly salary. The amount that is paid out will depend on the amount that has been paid in. Workers need to have made a minimum number of payments. Company pension schemes are not common, and there is no compulsory requirement for workers to have access to a company scheme. International companies that are based in Panama may offer this service though.

Those who want to retire to Panama will be able to claim their state pension from the UK although you may not qualify for the yearly increases. If you claim your pension in Panama then return to the UK you will then have your pension restored to the level currently being paid in the UK. At this time it is not possible for a payment to be made directly into a Panama bank account, but you can have the monies paid into a UK bank account so that you can arrange transfers yourself or have the money sent by cheque so that you can choose which account it is paid into.

You may be required to pay tax in the UK on your state pension but this will depend on your tax status. If you are classed as a non-resident you may have to pay tax in Panama depending upon the status of taxation agreements with the UK. It is a good idea to clarify your tax position in advance as you may find that you are expected to pay tax in both countries otherwise.

Workers who are in Panama but want to continue making contributions to the state pension in their home country may be able to do so. This will depend upon the arrangements between Panama and your home country and it is worth making enquiries about this, particularly if you will not qualify for the state pension in Panama.

Retirement age in Panama is normally 62 for men and 57 for women, but there is no compulsory retirement at this age and there is nothing to stop people working beyond this age if they choose to.

Panama is very attractive to retirees and has often been voted one of the best countries in the world to retire to. It is becoming one of the leading tourist destinations in Central America as there is so much to see and do. Those retirees who are active individuals will enjoy the range of sporting activities and leisure pursuits that are available to them. In addition there are a number of other advantages to moving to Panama. These include the fact that the country uses the US dollar as its currency, foreign nationals have the same rights as Panamanian citizens with regard to buying property and there is an attractive package of benefits for retired expats. The wide use of English in the country is also attractive to those who are English speaking. The country has an infrastructure which is similar to that of the US with up to date telecommunications systems and healthcare facilities.

The Pensionado programme offers retirees a number of financial benefits. Those who want to import their own household furniture from their home country will not pay any import duty and will also have the right to import a new car every two years with no import duty payable. You will qualify for a 25% discount on all utility bills and the same discount on airline tickets. You will also qualify for a 1% discount on mortgage rates provided the property in question is for your personal use. If you do not have medical insurance you will qualify for a 20% rate reduction for doctor’s bills and a 15% reduction on hospital bills. There is also a 15% reduction on dental and opticians fees and a 10% reduction on prescriptions. Retirees will also be entitled to a 50% reduction on theatres and cinemas as well as other cultural and sporting events. This is not an exhaustive list and once you have received your pensionado visa you will automatically be entitled to these benefits.

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