Retired military in Panama

My wife and I are also considering retirement in Panama in about 5 years. According to other ex-pats your pension is reasonable. Just make sure you pay the appropriate amount of FED taxes on the pension if you ever intend to return and live in the US or collect SS. (I under estimated the first year).  You won't have the burdens of state tax, TRICARE, life insurance or delta dental stripping away the net benefit, but medical, dental and life insurance will have to be factored into Panama living costs. Keep the survivor benefit deduction for you in place at all times.  Currently waiting for my second pension eligability, and access to wife's 401k and my Thrift Saving Plan (to young right now) We can wait a few years for Social Security payments  Refuse to give state of CA 20% of our collective retirement-that why we are leaving the homeland- live abroad together for 9 years

This is exactly what I have been looking for.

I am also in the 5 year range of retirement. Looking to get TSP, Military and Civilian retirement but not able to collect until 62 and SS at 65. Still 12 and 15 years away respectively. Does anybody know how this factors in on the Pensionado program?

El Cid, everything you said goes way over my head. I am also a current CA USAF vet. Could you elaborate the details for us?

What do you mean by

"...return and live in the US or collect SS?"

"...You won't have the burdens of state tax, TRICARE, life insurance or delta dental stripping away the net benefit, but medical, dental and life insurance will have to be factored into Panama living costs?"

"...Refuse to give state of CA 20% of our collective retirement?"

Any info would be appreciated.

Are you guys considering any other central/south American locations? I heard Ecuador is a great place for expats also.

Maybe we can all be Panamanian neighbors someday.

Ken,

You must be on the tail end of the Baby Boomers gen like me.

I have been collecting my Military pension for about 12 years. My Civil Service pension will be at 59, wife will have SS at 62 with access to her 401K at 59


You have to pay federal taxes on your Military retirement regardless of where you live oversees.  My first year no tax deductions were taken so I paid a lump sum to cover it. I currently have deductions for Tricare, Delta Dental, Survivor benefit (Spouse)and Life Insurance (significantly jumped when I turned 50). So I get about 300 a month shaved off for these expenses     

You need some types of coverage if you live abroad and you should maintain a life insurance policy until at least the traditional retirement age. Most people eventually return to the US when they get too old, frail, or if a spouse dies so make sure you pay fed taxes on pensions, 401k, TSP, and SS or they will collect it all in painful garnishments.

CA gives you no break as a retiree and raid all pensions, 401Ks TSP, interest from savings, SS etc.  If I maintain an address in the US it will be Wyoming since they take nothing from a retiree,

Thanks El Cid for the info.  Good advise.  We currently live in Oregon and pay hefty taxes as well.  I'm more than ready to get out of this cold, dreary climate that we have here!   I'm hoping to meet some other military people out there with the same plan as we all have for Panama.  Perhaps once we move,  I can come up with some sort of assistance to help other retirees/vets that want to make the transition to Panama.    We are planning a recon trip next March and can't wait!

We also just retired Army. We are in our forties and are traveling to Panama in a few weeks to start looking for property and where we want to be.

Kevin

I am only familiar with Coronado and Panama City both of which are the most expensive locations in Panama. Coronado has a sizable ex-pat community but does not offer easy access to the beach. Things are spread out and a good and durable vehicle is necessary.  Speed traps exist in and around Coronado and they love to shake down expats.   Don't rush into the purchase of a house or property. Lease until you either feel comfortable-or not.  I preferred Panama city but in the end based on an active lifestyle savings for us over the states would be marginal.