RETIREMENT Older Americans seek solace in Panama

Escaping a fast-paced life, some retirees move to Boquete.
BOQUETE, Panama -- Golf course manager John Sutton had had enough of lawyers, telemarketers, several of his neighbors and the federal government. So the San Diegan and his wife took early retirement, sold everything they owned and moved to Panama.
The Suttons, who bought a house here last summer, exemplify a wave of American retirees who want to get away -- far, far away -- from it all. Each month, about 20 of them are turning up in this remote coffee-growing town nestled in the mountains of western Panama, buying houses and starting new lives. It's the latest hot spot in Central America, a region that over the last decade has attracted increasing numbers of U.S. retirees.
"Boquete gave us the opportunity to have a great, comfortable lifestyle," said Sutton, 50, who with wife Dinah put $5,000 down on their brand-new house without even seeing it. The subdivision is named, appropriately enough, Hidden Valley.
Loading groceries into his car in front of Romero's, the local supermarket, he said, "This isn't Albertson's, but it's close enough."
Other U.S. retirees are making similarly radical moves, attracted by Panama's favorable tax treatment of foreigners, the relatively low cost of living, the lush surroundings and the eternally mild climate.
"We got tired of the snow," said retiree Barbara Votava, who moved here from Spokane, Wash., with her husband, Bill, after he sold his photo-processing business. "This is as close to paradise as you can get."
Increasing numbers
In recent years, retired foreigners have been drawn to Costa Rica, Nicaragua and parts of Mexico. But Panama's moment seems to have arrived. Boquete has turned up on several "Best Places to Retire" lists published in recent months in U.S. newspapers and on Internet sites.
"I paid my dues, got my two boys through college and decided things have got to be better someplace else," said John Villegas, an Arizona retiree who publishes the Internet newspaper the Boquete Times. "They are."
Asked to define what Boquete retirees have in common, Villegas said: "They have strong ties to their past and recollections of better times, nuclear families, respect for the law and civility. And they have no qualms about looking outside U.S. borders to re-create those good old days."
Like most other Latin American countries, Panama does not keep statistics on the number of foreign retirees living within its borders. But immigration officials here and throughout the region agree that the numbers are rising.
Panama, for example, last year granted 449 special retiree visas, nearly double the 229 granted in 2003, according to the nation's immigration office. A total of 2,500 pensioner visas have been issued. Costa Rica, which has been retirees' favored Central American destination, has issued 11,000.
Tax incentives
Under the terms of the visas, the Panamanian government exempts foreign retirees from paying property or income tax, as long as they prove they have $500 minimum monthly income. Newcomers can bring in a car and up to $10,000 in belongings tax-free. Interest from their deposits in Panama's banks is also exempt. Retiree visa holders also receive numerous discounts, including 50 percent off most plane and bus tickets.
Panama says the special tax status is good for the country because retirees create jobs and inject more cash into the local economy.
A case in point is newcomer Mike LaFoley, a Boston-area native. Since he and his wife, Annie, arrived here four years ago, he has started a coffee farm and spent thousands of dollars in construction improvements on his property.
"My last pay period, I handed out 11 envelopes to my workers," LaFoley said. His stuccoed home, like most of those in the subdivisions popping up in and around Boquete, looks like it could have been built in an upscale U.S. suburb, replete with verdant yard, faux-tiled roof, driveway and carport.
Although only about 500 foreigners live in Boquete and its environs, builders last year took out permits to build 2,000 additional housing units in anticipation of a real estate boom.
Life in this farm town of 18,000 is tranquil and unhurried -- for now. Many fear that the population of rat-race refugees is rising so fast that paradise may soon lose its charm. In addition to Hidden Valley, half a dozen subdivisions geared to Americans are either under construction or on the drawing boards on former coffee farms and cattle ranches.
Rising demand for property has caused a tenfold increase in land values in just two years, said Judith Urriola, manager of the local branch of Banistmo Bank.
"Costa Rica got expensive, and it's going to happen here. We just hope it takes a while," said Jorge Conte, who is developing a 350-home subdivision called Hacienda los Molinos. Prices for a 2,300-square-foot house in his development average about $160,000. That's the low end of the home price scale, locals say. Most new homes sell for $200,000 and up.
The influx of moneyed foreigners has had a strong impact on this once sleepy town, Banistmo's Urriola said. It's been great for owners of coffee farms who have struck it rich, selling their 500-acre properties for $1 million and more, a king's ransom in rural Panama.
Health care
Does Boquete have any downside? Residents pointed out that there is no urgent-care hospital, the closest being a 45-minute drive away in the provincial capital, David.
But Ted and Louise Harrison, emergency-room doctors from British Columbia who bought property here last year, are working on a project to build one. They say that meanwhile, the level of regular medical care is good in Boquete and elsewhere in Panama, because many of the doctors receive their training in the United States.
Hershel Stolebarger, a retired New Mexico real estate broker, said a friend felt comfortable getting a hip replacement in Panama rather than the United States -- especially after finding out it would cost $5,000 compared with $30,000 in "El Norte."
The benefits far outweigh the disadvantages, Sutton said. His monthly living expenses average $1,500 a month, half what he and his wife spent in San Diego, he says.
The biggest savings are in health insurance. He and his wife pay $50 per month for government health coverage that would cost $1,200 in San Diego.
"I bleed red, white and blue. This was a lifestyle decision," Sutton said. "We could have worked 10 more years and gained nothing," Sutton said. "You give up the hustle and bustle, sure, and the convenience of shopping malls. But you come down here and the stress level drops immediately. My wife's blood pressure dropped 25 points the first week we were here."

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