Best places to retire 2025: Panama the surprise winner in latest Retirement Index

New analysis puts Panama ahead of perennial retirement favourites France and Spain. Here's why.

Which is the best country to retire to?

No, it’s not Spain or Greece - a recent survey has found that the best place to retire to is… Panama.

That's according to the latest Annual Global Retirement Index for 2025, compiled by International Living (IL).

The magazine tracks the best options for retirees using a network of independent correspondents across the world who live and work abroad, with on-the-ground insight into the countries’ culture, healthcare systems and living costs.

Panama’s pension visa wins out

Panama topped the list because of its Pensionado Visa programme, which provides permanent residency to people retiring on a relatively affordable monthly income of £780 ($1,000) or £975 ($1,250) for couples.

A handful of sizeable discounts come with the programme, including 25% off utility bills, 20% off prescription drugs and medical consultations, 25% off restaurant meals and 50% off cinema tickets.

It’s thought that most retired couples can enjoy a comfortable lifestyle in the Central American country on a monthly income of around £1,950 to £2,340 ($2,500 to $3,000).

What’s more, the healthcare system, especially in Panama City, is also said to be good quality, with English-speaking staff and the latest medical technology available.

Each year, the index assesses and chooses 20 countries where retired individuals can get a better deal with their pension income.

The index tracks seven categories including the cost of living, visas, housing, climate, healthcare, community integration and development and governance.

Below Panama in the list came Portugal, Costa Rica, Mexico, France and Spain, closely followed by Malaysia, Greece, Italy and Thailand.

“This year’s Index showcases safe, welcoming, good-value places where retirees can live better for less - while enjoying an adventure and finding like-minded community in surrounds that suit them,” said Jennifer Stevens, executive editor at IL.

Portugal: Affordable luxury

Portugal, which came second in the list, is already a popular retirement destination for many Brits. IL’s correspondent said that it is a beautiful and affordable place to live.

“On the Silver Coast, near the walled city of Óbidos, friends who own a townhouse and dine out frequently spend around €2,500 (a month), writes Terry Coles, who says retiring in the country costs around $2,500 to $3,000 a month.

“In Porto, a single friend rents an unfurnished, river-view apartment for €1,400 ($1,500) and keeps his total monthly expenses at €2,200 ($2,388),” he adds.

“Despite Porto’s higher costs, luxury experiences can still be affordable, such as enjoying happy hour at a five-star hotel with €3 glasses of wine.”

Again, healthcare is said to be reasonable, with the choice of public or private medical options.

Top 10 places to retire

*Data from International Living Magazine

Costa Rica’s laid-back lifestyle

Meanwhile, in Costa Rica, which comes in third on the list, the living costs vary depending on your pocket, with affordable options for all.

“Your lifestyle heavily influences your spending in Costa Rica,” says IL correspondent Becka Bottone.

“Some couples live comfortably on $2,500 a month, while others spend double or triple that amount.

The lifestyle there is “laid back and relaxing”, while an outdoorsy life is popular due to the climate and healthcare is “high quality and affordable”, with many doctors speaking English.

Malaysia and Thailand also scored highly for the South East Asian climate, cheap cost of living and affordable healthcare options.

Dinner out in Malaysia can cost just $5, while it’s possible to rent an apartment for just $300 a month and, as well as delicious cuisine and welcoming communities, Kuala Lumpur’s easy travel connections and specialist care for the elderly also came highly rated.

Gym membership in Thailand costs a dollar a day, while the correspondent said their hip replacement had cost a third of the same fee for the operation in the US.