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In Panama, American retirees finding more paradise for less

BOQUETE, Panama -- Golf course manager John Sutton had enough of lawyers, telemarketers, and the US 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 the wave of American retirees who want to get away from it all -- far, far away. Each month, about 20 new ones turn up in this remote coffee-growing town in the mountains of western Panama, buying houses and starting new lives. It is the latest hot spot in Central America, a region that over the past decade has attracted increasing numbers of US retirees.

''Boquete gave us the opportunity to have a great, comfortable lifestyle," said Sutton, 50, who with his wife, Dinah, had put $5,000 down on their new house without seeing it.

Other US retirees are making similar 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 business. ''This is as close to paradise as you can get."

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 recent ''Best Places to Retire" lists.

''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 transplant. ''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 US 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 in Panama and throughout the region agree that the numbers are rising.

Panama, for example, granted 449 special retiree visas last year, 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 the favored Central American destination of retirees, has issued 11,000.

Under the terms of the visas, Panama's 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 as much as $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 cash into the local economy.

Consider Mike LaFoley, a Boston-area native. Since he and his wife, Annie, arrived in Panama four years ago, he has started a coffee farm and spent thousands of dollars in construction improvements on his property.

About 500 foreigners live in Boquete and its environs, but last year builders got permits to construct 2,000 more housing units in expectation of a real estate boom.

Life in this farm town of 18,000 is 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, a half-dozen subdivisions geared to Americans are 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 two years, said Judith Urriola, manager of the local branch of Banistmo Bank.

Does Boquete have any downside? Residents noted 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 in Panama last year, are working on a project to build one.

The biggest savings are in health insurance.

Sutton and his wife pay $50 per month for government health coverage that would cost $1,200 in San Diego.

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