Cost of living in Panama
The cost of living in Panama for a household runs at about 50% of US prices, and the official minimum food basket for Panama City is $365.88 a month for a household of 3.5.
Official prices, where your money goes further, and a budget built from your own rent and insurance. Checked against official sources on Oct 7, 2026.
- Price level
- ~50% of the US Household consumption, 2025. World Bank. Checked Oct 7, 2026.
- Food basket, Panama City and San Miguelito
- $365.88/mo Official, household of 3.5, March 2026. Ministry of Economy and Finance. Checked Oct 7, 2026.
- Food basket, Rest of urban Panama
- $341.81/mo Official, household of 3.6, March 2026. Ministry of Economy and Finance. Checked Oct 7, 2026.
- Per person
- $105/mo Food basket divided by household size
- Tax on a foreign pension
- 0% A foreign pension is not taxed. PwC Tax Summaries. Checked Oct 7, 2026.
- Retiree discount
- 50% off Hotels, Monday to Thursday. Ley 6 (1987). Checked Oct 7, 2026.
Build your Panama budget
No official source tracks what expats pay in rent, and rent is the biggest line in any budget. So this starts from what is measured, the government's food basket, and adds your own numbers.
Get rent from current listings in the area you like and a written quote for health insurance at your age; the total then shows how far it sits above the $1,000 Pensionado minimum.
Your monthly budget
$0
The official food basket
Panama's Ministry of Economy and Finance prices a minimum food basket every month: the cheapest set of foods that gives a family the calories and nutrients it needs.
| Area | March 2026 |
|---|---|
| Panama City and San Miguelito | $365.88 |
| Rest of urban Panama (including David, Colón, La Chorrera, Santiago, Chitré) | $341.81 |
Ministry of Economy and Finance. Checked Oct 7, 2026.
Retiree discounts on daily spending
| Hotels, Monday to Thursday | 50% |
| Hotels, Friday to Sunday | 30% |
| Restaurant meals (individual consumption) | 25% |
| Flights on national and foreign airlines | 25% |
| Intercity buses, trains and boats | 30% |
Law 6 of 1987 gives these to all pensioners and retirees in Panama, and to residents from age 55 (women) or 60 (men). Ley 6 (1987). Checked Oct 7, 2026.
Cost of living questions
How much do I need a month to live in Panama?
It depends mostly on rent, which no official source tracks for expats. Start from the official food basket ($105 a person), add your rent and insurance quotes in the calculator above, and keep the $1,000 Pensionado minimum in mind as a floor, not a budget.
Is Panama cheaper than the US?
On average, yes: the World Bank puts household prices in Panama at about 50% of US levels (2025). Imported goods, cars and electronics can cost as much as at home or more.
Is it cheaper outside Panama City and San Miguelito?
Food is: the official food basket for Rest of urban Panama, incl. David costs $341.81 against $365.88 (March 2026).
Do retirees pay less for anything?
Yes. The Pensionado and retiree discounts in Law 6 of 1987 include 25% off restaurant meals and flights, 50% off hotels Monday to Thursday, and 20% off medical consultations.
