If you want to retire in Panama or relocate on a budget, Panama still offers some of the best value in Latin America in 2025. The country’s dollarized economy, residency options like the Panama retirement visa, and variety of locations (beach, interior, mountain, suburban) make it easy to match your lifestyle to your budget.
This updated guide highlights the cheapest places to live in Panama, including interior cities, commuter towns near Panama City, and lower-cost areas close to beaches or mountains. If you are still deciding between city, country, or suburban life, also see: Where to retire in Panama – city, country or suburban life.
Table of Contents
- What “cheap” really means in Panama (2025)
- Key factors to consider
- 1. Santiago de Veraguas
- 2. Colón
- 3. David (Chiriquí)
- 4. La Chorrera
- 5. Penonomé
- Other affordable beach & mountain options
- FAQ
What “cheap” really means in Panama
Because Panama uses the U.S. Dollar (Balboa) as legal tender, prices are generally stable and easy to compare to your home country. For current numbers and a full spending breakdown, see our main guide on the Panama cost of living.
Based on 2025 figures and client experience:
- Single retirees in interior or smaller towns can often live well on $1,200 – $1,500/month.
- Couples in modest housing outside Panama City can live on $1,800 – $2,400/month.
- In Panama City or higher-end beach areas, budgets of $2,000 – $3,000+ are more realistic.
“Cheap” in this context means 30–50% lower monthly expenses than many parts of the U.S. or Canada, while still maintaining comfort, safety, and access to services.
Panama Minimum Wage
For context, the minimum wage in Panama is scaled monthly and is between $500-$1,000 per month depending on the industry. A middle-income wage could be considered anywhere between $1,000-$2,000 per month, while what would be called “good pay” can go from $2,500 per month on up. It’s important to understand these distinctions when looking at the cheapest cities to live in in Panama. Cheaper cities are often cheap because of the potential earnings power and spending power of the locals. Areas, where the cost to live, is low will not typically have many jobs above the monthly $1,000 income mark. Additionally, they may not have tourists or foreign-earned income spenders that live or visit there frequently.
For the sake of this breakdown, as it is geared towards people who have recurring foreign-earned income or have investments in Panama with high yields (compared to wages), we’ll just look at the raw price of things. Keep in mind, however, that if you’re looking to work and earn an income in the cheapest cities to live in in Panama, you must scale pricing to earnings power to get the same value. Here are our picks, and a bit about each city to describe what life I like in each one.
Key factors to consider before choosing a cheap area
Price alone should not drive the decision. Consider:
- Lifestyle: Beach vs. mountain vs. suburban convenience.
- Infrastructure: Roads, internet, water, electricity, and proximity to hospitals.
- Community: Whether you prefer a local Panamanian town or an expat-heavy area.
- Transport: Distance to Panama City or David airports.
- Legal/immigration: Building your move around the right visa or pension program.
1. Santiago de Veraguas
Santiago remains one of the most affordable mid-sized cities in Panama. It sits on the Pan-American Highway and connects the interior with the Azuero Peninsula. It is a hub for ground transportation and trade in the country’s interior, and a popular connection point between David and Panama City.
- Typical costs: 1-bedroom rentals often range from $400 – $600/month, utilities can be kept low if you limit A/C, and groceries bought locally are very economical.
- Pros: Very low monthly spend, good regional connectivity, authentic Panamanian lifestyle.
- Cons: Smaller expat presence, fewer upscale services.
2. Colón
Often referred to as Panama’s “2nd city” due to its historical significance and location at the northern mouth of the Panama Canal, Colón continues to offer some of the lowest rents in the country due to mixed infrastructure and neighborhood variability.
- Typical costs: 1-bedroom apartments around $400 – $650. A single retiree can often stay around $1,000 – $1,300/month total, depending on lifestyle.
- Pros: Very inexpensive, access to the Caribbean, transport links to Panama City.
- Cons: Infrastructure and security differ by area; due diligence and local guidance are strongly recommended.
3. David (Chiriquí Province)
David is attractive for retirees because it combines affordability with services, hospitals, and regional travel. It is also close to Boquete (mountains) and Pacific beaches.
- Typical costs: 2–3 bedroom homes are often available for under $1,000/month. Many retirees operate in the $1,200 – $1,800/month range in David.
- Pros: Good services, airport, regional hub, close to nature.
- Cons: Slightly higher prices than very small towns due to demand.
4. La Chorrera (Panama City metro)
Though not in Panama City proper, the city of La Chorrera is considered to be a part of the larger metro region and a popular suburb for workers in the capital. La Chorrera is a good option for people who need or want access to Panama City but prefer not to pay city-center prices.
- Typical costs: 1-bedroom units around $600 – $800; total monthly budgets of $1,500 – $2,000 are common, depending on commuting and lifestyle.
- Pros: Access to capital’s healthcare, airport, shopping, and business opportunities; family-friendly.
- Cons: Traffic at rush hour; not as cheap as deep-interior towns.
5. Penonomé
Penonomé is a smaller, cultural interior city with very low daily expenses, a relaxed pace of life and rich with folkloric history and tradition.
- Typical costs: 1-bedroom housing from $400 – $500. Many singles stay in the $900 – $1,200/month range total.
- Pros: Low crime, strong local culture, good value.
- Cons: Smaller expat community, fewer high-end services.
Other affordable beach & mountain options
Some retirees want a cheaper life and a specific environment:
- Boquete: Not the absolute cheapest, but cooler climate and services attract retirees.
- Pedasí / Coronado: Beach lifestyle with growing amenities; costs can be controlled outside of prime areas.
- Bocas del Toro (certain parts): Can be very inexpensive, but factor in remoteness and logistics.
In every case, visit first, rent before you buy, and confirm actual monthly expenses on the ground.
How do you know if living in any of the cheapest cities in Panama is right for you?
Like anything in life, one must weigh the pros and the cons before making a decision that’s as big as relocating. This is especially the case when it comes to relocating to a new country. While living in one of the cheapest cities in Panama has a huge financial appeal, it may not have a full lifestyle or comfort appeal for some expats. You really need to think hard about what you’re giving up for the price. Are you OK with living in a city without many other expats? Do you require better access to an international airport? Will you be comfortable with less developed infrastructure, and simple housing? These are all things that one must ask themselves in consideration.
Living in any of the cheapest cities in Panama can be a tremendously rewarding experience, however, if you find the right fit. The financial benefits are clear, but the lifestyle benefits that go with it can also be very pleasant for the right people. We recommend that before you make any decision to commit to these cities, you visit first. Get a first-hand look at what these cities are like. Talk with locals in these communities, and outside of them, and get their take. Look at your budget carefully and see what you can afford, what you can’t, and where the value lies in your budget.
Panama has options that range from very cheap, to very expensive, and everything in between. If living in one of the cheapest cities in Panama doesn’t seem like a good fit, there are plenty of other options all over the country that will fit perfectly. You have to do some research and some soul searching when considering your move to Panama.
FAQ
What is the cheapest monthly budget to live in Panama?
In smaller interior towns, many retirees live on $1,000 – $1,500/month. In or near Panama City, budget $2,000 – $3,000+. For detailed examples, see the cost of living in Panama page.
Is there a cheap beach town to retire in Panama?
Yes. Coastal areas outside the main resort corridors can be affordable, especially if you rent a modest home and keep utilities low. Always check infrastructure and access to services. Consider towns like Pedasi.
What visa should I use to retire in Panama?
Most retirees use the Panama retirement visa (Pensionado), but there are other residency options depending on nationality, investment, or employment. Our firm can advise on the best path for your situation.
How do I start the relocation process?
The safest path is to plan your move with a Panamanian law firm that handles immigration, real estate review, and banking introductions. Start with our overview on how to move to Panama and contact us for a consultation.
