San José, Costa Rica, since 1956

Costa Rica faces strong competition as destination for U.S. retirees

Costa Rica and Mexico have traditionally been the region’s preferred destinations for U.S. and Canadian retirees, but according to a report from the The Wall Street Journal, Panama, Belize and Nicaragua are increasingly competing with both countries.

The report says that the number of U.S. citizens who receive pension payments in Panama increased by 65 percent from 2006-2011. In Nicaragua, the number doubled during the same period, from 595 retirees to 1,322.

“These three countries offer packages of residency and breaks on taxes and fees that imitate Costa Rica’s pensionado program, which was introduced in 1971 and helped set the groundwork for a boom in retiree emigration from North America. Nicaragua added such a law in 2009, offering foreigners with retirement incomes tax breaks on everything from cars to construction materials,” the WSJ noted.

The story also describes how last year Panama created a path to citizenship for retirement residents and introduced a new residency program for people under retirement age that has lowered requirements for investment in property, business and other ventures.

Officials from Costa Rica’s National Tourism Chamber acknowledged the efforts of these three nations to attract retirees, but insisted that Costa Rica isn’t necessarily losing ground.

The WSJ report also noted that crime and security problems are still a major concern for people interested in relocating to the region.

“Security isn’t always adequate in the region. Mexico’s well-publicized drug war and escalating violence are starting to push Americans to look at new places for retirement, […] and Costa Rica’s petty crime such as theft and smash and grab muggings have increased in the past couple of years, along with home invasions,” added the story, also citing similar problems in all the other countries.

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