Alan Wells, 73, counts himself among the Americans who’ve looked abroad for a simpler, more affordable retirement.

Wells, retired for 14 years, took up a permanent residence in Boquete, Panama, in 2015. In 2016, he bought what he described as a modest 900-square-foot house in a neighborhood about 30 miles from the Costa Rican border. After purchasing it for around $100,000, he immediately doubled the home’s size to around 2,000 square feet. 

“It’s probably worth a couple of hundred thousand dollars today,” he said. 

As many retirees debate moving abroad, Wells shared his perspective with Fortune on how the experience overseas has been for him. 

Why make the move?

Growing up in Cincinnati, Ohio, Wells had never been to a foreign country before his move to Panama, but said his experience was magical when he moved. 

His daughters’ weddings in Panama introduced him to the community, and after meeting a widow at one of the receptions, Wells began considering a move to Central America as a single retiree.

“They [my daughters] decided they preferred the U.S. to Panama; I decided I prefer Panama to the U.S. So we switched,” Wells said. “I tell them, ‘Thank you for your welfare contributions to my Social Security fund so that I can live down there.’” 

Throughout his career, Wells spent most of his time in Memphis, Tennessee, at FedEx. After moving to Panama, Wells used to spend just a week each year in Louisville, Kentucky.

But life changes—such as COVID and grandkids—turned him into a snowbird. Today, he commutes between Louisville and Boquete twice a year, spending six to nine months in Panama a year now.

Courtesy of Alan Wells

Can you afford more in Panama than in the U.S.?

That depends on the particular the part of the U.S., he said. Panama is not a great deal different spending-wise compared to Louisville. However, he said if he lived in a bigger city, such as Miami or Los Angeles, it would be different. 

Housing in Louisville is about 20% cheaper than the U.S. average, where the typical household spends $61,334 a year and roughly $1,784 a month on housing. In L.A., the cost of living is about 49% higher than the national average.

Wells said he has friends who moved to Panama from L.A. because they couldn’t afford to live there anymore, and a now living “very nicely.”

“I can afford a great deal more in Panama than I can in the U.S., but I do maintain residences in both countries,” he explained, adding that, “$500 is my cost of living, plus food, in Panama.”

The rest of his expenses in Panama are as follows:

Home insurance: $300 per year 

Car: $250 per year 

Electric bill: $40 a month 

Trash and water: $11 a month 

Internet: $70 a month (includes cable)

One important factor in his expenses in Panama is that Wells does not pay for heat or air conditioning, because “the climate is perfect.” 

Meanwhile, his U.S. expenses are three to four times higher. Annually, he pays roughly $1,000 for homeowners insurance, $1,500 in property taxes, and about $1,000 for car insurance.

How long did the process take to become a permanent resident? 

Wells said the process in total took him about seven to eight months to complete (including paperwork, background checks, income verification, and flights to Panama City for the final government appointments). 

Especially for those retiring, recent shifts in visa rules, tax policies, and local costs mean the process is more complex than you’d think, experts say. 

In order to get a residency in Panama, Wells said you have to demonstrate a minimum income of $1,000 a month. His income is split evenly between Social Security payments, investment returns, and required minimum IRA distributions. 

How did you spend your days when you moved compared to now? 

The first few years in Panama, Wells spent most of his time exploring the mountains of the country. Today, he goes to the gym, and links his computer systems (as an IT guy) from Kentucky to Panama.  

The culture in Panama reminds him of his Southern lifestyle back home. 

“Panama’s the size of Tennessee, so in the first few years you travel a lot there’s a lot to see,” he said. “It’s a very small, very narrow country, but you go from plains to mountains to coastline, it’s awesome.”

In fact, he can reach the Pacific Ocean in about an hour and the Caribbean in about three.

How do you prepare for language barriers and medical care?

Wells said medical care is cheap and sufficient for certain things, but “good and cheap is not really a thing.” 

“If something serious happened, my kids would put me on an airplane and take me back to the States,” he added.

For the language barrier, Wells said he is disappointed he hasn’t learned as much Spanish as he hoped, but “any educated Panamanian learns English as a mandatory second language, and most adults I meet speak some English.”

A successful retirement or move overseas requires careful planning, thorough research, and flexibility to navigate evolving financial, legal, and lifestyle challenges. Wells’ advice: “Don’t jump in. You really want to take a couple of sample trips before you make any decisions.”

“People come down here, take a tour, buy a house, and then realize they’re 4,200 feet up a mountain and freezing every night,” he said. 

“We stayed in a little casita just to see how things were and to look around at the real estate to find something we could actually live in.”