Panama - a land of opportunity - Part 1

This article comes from our friends at Panama Perspective. The article author, Bob Sullivan from The Red Tape Chronicles at MSNBC, puts Panama on the front line when talking about where to retire and how attractive it can be on a limited budget. A lot of people may not be interested in a $400,000 high rise condo in Panama City or a million dollar beach mansion. They seek something else. Here in Panama you can find affordable homes and a lifestyle that costs about 50% of what it does back home, plus a lot less stress!!

The following are stories from folks just like you and me.

Carol Denne and her husband Larry both worked government jobs for decades, but as they entered their late 50s, Larry’s fast-shrinking 401(k) account and Carol’s modest pension pointed to one stark reality: Retiring with dignity in their Philadelphia suburb would be impossible. In fact, Carol ran the numbers over and over and came to the conclusion that retiring anywhere in the U.S. was unrealistic.

“Either my husband was going to have to work until he died, or we were going to have to leave the country,” she said. “He’d been working since he was 15, and that was long enough. So we left.”

So four months ago, Carol and Larry departed the U.S. — leaving behind their four children and five grandchildren — and moved to a mountain village in Panama.

“We found we could live on my retirement here,” Carol said by phone from their new home outside the town of David, on the Latin America’s country’s west side. They were surprised to find a healthy number of “gringos” already living in their suburb, called Volcan. “We are seeing a growing number of ‘ex-pats’ who are in our same situation. This points to a growing number of families that are torn apart as parents and aunts and uncles are forced to move away to retire.”

They pay $500 per month to rent a four-bedroom home, enjoy dinners for $10, and now believe they’ll be able to live out their lives without worrying about running out of money.

With Larry 59 years old and Carol 57, the Dennes fit into the demographic that might actually be suffering the most during the current economic downturn. While much has been written about youth who graduate college and have few economic opportunities and families threatened with foreclosure, both groups will presumably benefit when the economy rebounds — even if the recovery is 10 years off. But for workers nearing retirement, there is no time to make up their share of the $2.7 trillion in retirement investments that vanished between 2007 and 2009, according to the Urban Institute.

As we’ve chronicled here before on Red Tape, older Americans who lose their jobs have a hard time finding new employment. Many unemployed 50-somethings believe ageism is a factor, and there is some data that might support those accusations. The unemployment rate for workers aged 55-64 has more than doubled, from 3 percent in 2006 to 7.1 percent in 2010, according to a recent report by Congress’ Government Accountability Office. Median unemployment length for the group soared from 11 weeks to 31 weeks from 2007 to 2010.

The report also found that an estimated 25 percent of adults 50 and over had exhausted their savings in response to a layoff or other recession-related event, and half in that age group say they had delayed a medical or dental procedure to make ends meet. Meanwhile, the normal safety net of home equity has been decimated by the housing bubble collapse.

Things were different for the Dennes before 2008, before the economic crash caused by the near collapse of the financial system. Larry was a manager at a local recycling company and had dutifully socked away money into his 401(k). Between her $3,000 per month pension earned as a civilian working for the Navy and his retirement savings, the couple thought they’d have options. Then, the crash swept away most of Larry’s 401(k) and reality hit.

“We’re down here for the long haul. We can’t afford to live in the States,” she said. “My sister is older, she has a good job, and she’s going to have to work 10 years before she retires. I’m shocked that that has happened. I don’t know what’s going on. Boomers are working even longer, or until they die, or are leaving country like we are. The recession has affected everybody in hard ways.”