Panama or Nicaragua, that is the question. With the sustained growth of expat communities in Panama and the upsurge of interest in Nicaragua over the last couple of years, there is considerable interest in comparing the two. Here's a brief analysis of the pros and cons of these popular retirement and second-home destinations.

Both countries enjoy warm weather all year long and both countries have highlands which provides relief from the tropical heat. In Panama, the dry season is humid and the wet season often brings periods of overcast weather. In Nicaragua, it's common to have sunshine in the morning during the wet season and the dry season can be quite pleasant. But believe it, both are in the tropics and except for the highland regions, it is hot..period.

Health care in Panama is superior and care that meets First-World standards is easy to find. Not true in Nicaragua unless the beach development you are a part of has its own clinic. In Granada there are a few private clinics but be selective.

Nicaragua enjoys a lower cost of living than Panama and the cost of beach properties--a major attraction in both countries--is dramatically less in Nicaragua, with some properties selling for just 20% of the cost of their Panamanian counterparts. (A notable exception here is the relatively new Istana Plantations development in Panama, which is priced much like a Nicaraguan beach property...but it's also more remote than most of the competition in Panama.)

But you get what you pay for. Most Panamanian beach developments can be reached by traveling a nicely paved road at high speed, right to the property. Modern beachfront projects start just 45 minutes outside Panama City. In Nicaragua, most beach developments are at the end of a significant stretch of dirt road, sometimes requiring a 4-wheel drive in the wet season.

North Americans seem more "special" in Nicaragua and receive more attention among the community. In Panama, the presence of North Americans is routine and has been for over 100 years since the building of the Canal. Panama's expat community is much larger than Nicaragua's, whose expats are concentrated in Granada and the beach resorts. (Unlike the rest of Nicaragua, the beach developments usually have First-World amenities and the residents are mostly North Americans.)

English is widely spoken in Panama, while it is rare in much of Nicaragua.

Nicaragua is a poor country, while Panama is relatively well-off by Latin American standards. Stopping at an intersection in Panama City is much like being in any major U.S. city, while in Managua, your car will be surrounded by windshield-washers, street vendors and others looking to earn a living; you can do a good bit of shopping through your car window at the stop lights in Managua if you've a mind to.

While the politics are different in both countries, both are considered to be politically stable with respect to expat life. Both countries are encouraging retirees with long term enticements via laws and financial arrangements.

If proximity to sophisticated health care, a large expat community where English is widely spoken and First-World country-wide infrastructure are important to you and you want an easy transition from life in the States or Canada, then you should look to Panama.

If low cost of living and low cost of real estate is your primary concern, you enjoy being part of a foreign culture that's a different from your own and you have at least a smattering of Spanish, consider Nicaragua. If you like your beaches to be remote, natural and free of tall buildings and you don't mind being part of the Third World, then again - you should look to Nicaragua.