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Retire in Mexico
Retirement from your work, need (and arguably should) not automatically translate to a retirement from your life! Mexico's retirees are far from "out to pasture" and, in fact, many people who retire in Mexico comment on how they enjoy and savor their active and enjoyable lifestyle and activities as retirees in Mexico.
In this guide, we explore some of the key considerations that you will need to reflect upon when you are planning a retirement in Mexico.
The Mexico Essentials guide also provides a wealth of background and practical information about being in Mexico.
Blog Articles: Retirement in Mexico
Americans and Canadians out-number Europeans who retire in Mexico by a significant amount. This is simply to do with geography: although some Canadians will travel just as far in terms of number of miles, there is no large body of water between the two and the psychological impact of this is greater than we realize. So if you eventually decide to retire in Mexico, and you decide to live inside one of the expatriate communities, you will most likely be sharing the company of Americans and Canadians who will all speak English with you!
People who retire to Mexico come from all walks of life. Many have had jobs either in large companies, small enterprises, or have had their own business, sold it and moved to Mexico. The reasons for moving to Mexico are as many and varied as the people who make them. It's a personal choice, and usually one made through having known Mexico before—either in passing, with later research trips, or having spent annual holidays in Mexico over several years during their working lives. This is significant: If you are going to spend important years of your life in a country other than your own, it's imperative that you get to know Mexico and experience it first hand.
See Also: Mexico Experiences
As a country, Mexico has an enormous amount to offer retirees. You have a choice of climates, ranging from spring-like weather all year-round to warm humid sea front locations and the dry heat of desert.
The infrastructure is good in developed areas, and the areas you are likely to choose from are as safe as any modern town or city in your home country (in fact, Mexico has extremely tight firearms and lethal knife laws—making it statistically safer than many cities in the USA, for example). Outside of Mexico City and away from the drug rings, violent crime is extremely rare in Mexico.
Mexico's pace of life is ideal for retirement—you can relax, and still lead an active retirement. Stress levels are insignificant here.
The food is wonderful. Fresh fruit and vegetables, meats and fish are available at the local markets, and you'll get great value for your money. There is an enormous variety of tropical fruit, which is sweeter and juicier than the kind that is shipped to colder climates. Food is also less expensive in Mexico, although prices and quality vary throughout the year, depending on the season. The variety of vegetables is also immense, including local kinds such as nopales (cactus) and chayotes. Mexico is also the home of the avocado and is the world's biggest producer of the fruit.
Good healthcare is widely available. Mexico has good doctors, dentists, hospitals and other medical specialists. There are a range of insurance services available for you to buy to safeguard you and your dependants from the cost of private medical bills.
Your retirement income can go further in Mexico. Exactly how far will depend on your lifestyle expectations. A section below on this page deals with actual living costs, but the essential point to remember is that the basic foods and drink are considerably less expensive in Mexico than they are in Europe and most places in the USA and Canada. Eating out can be less expensive too, and extremely good value for money.
Utility bills can be lower (with the exception of electricity which has risen significantly recently), property taxes and maintenance costs are very low, and you may be able to structure your finances so that your retirement income is very tax efficient for you.
If your retirement income is generated in hard currency, you will find your earnings stretch further on the basics needed for everyday living than it would in Europe, the US or Canada, for example.
Whether you retire permanently in Mexico or live here say, only during the winter months, is up to you and your lifestyle choices. This will in all likelihood depend, on the most part, upon your social and family ties back home. It takes, on average, between 16 - 18 hours of traveling to get to Mexico (door-to-door) from Europe and between 6-12 hours from Canada/USA, which means either you, or your friends and family will need to make an effort to see each other.
You may be able to own two houses and rent out whichever one you are not living in, thus providing an income and helping you to maintain both. Or you may rent in Mexico, using the proceeds of a house rented back home to pay for your rented stay in while you're in Mexico.
For some, retirement means breaking away completely and starting a new phase in their life. There are many foreigners who have made Mexico their permanent home and are living very happily there.
See Also: Visas and Immigration
For those who know Mexico, retirement there can be part of a dream come true. They enjoy a great climate, great food, a rich culture, and fabulously friendly people.
Some retirees move into Mexican communities and integrate with life there; this can make the whole experience much more worthwhile and fulfilling.
For those with hobbies, the hobby or interest can almost always be pursued in Mexico. Communications via the Internet will keep you up-to-date with the latest sports scores and coverage and home news if you need that. Name a sport, and you'll be able to play it in Mexico.
Many people continue their passion for, or turn to, art, photography and writing using Mexico as their landscape and inspiration. Some find that their work can be sold outside Mexico to news and media agencies, supplementing their income.
Other people get involved in social work: helping deprived communities to build new infrastructure, sharing their extensive knowledge, experience and understanding of life with others and making a significant and positive contribution to the communities they live in.
There's no better time to Learn Spanish. Surrounded by the language, engulfed in a country passionate about its history and culture, there is no better place to learn than in Mexico. Language classes are available everywhere.
If you view your retirement as an opportunity to improve your golf game, Mexico has no less than three of the world's top ten golf courses for you to try—and dozens more besides.
You can retire in Mexico in total seclusion if you want to, buying a property in the middle of a stunning landscape, with nothing but nature around you for miles. Or you can live in the middle of one Mexico's towns or cities surrounded by the local communities, sharing their culture and their way of life—or something in-between. Whatever you want, you'll find something to suit your tastes somewhere in Mexico.
Everything everywhere costs money and Mexico is no exception. How much you spend will depend on your lifestyle expectations.
However, you'll find that Mexico can offer good value in just about everything you'll need to buy, from land and real estate, through to furniture and DIY materials, food and drink, and entertainment.
Generally speaking, Mexico can be excellent value for money for people who choose to retire there, especially if they are earning a hard-currency based retirement income.
See Also: Banks, Banking and Credit in Mexico
The income you need to live will ultimately depend upon your lifestyle expectations. Products, services, food and drink can be purchased to suit every budget and, like everywhere else in the world, you get what you pay for.
The Mexican immigration authorities require that you demonstrate a proven fixed income in order to obtain a retirement visa in Mexico. There is no 'minimum amount' set in law, and each application is dealt with on a case-by-case basis; however, the rule of thumb is that you need to prove an income of US$1,500 per month plus US$500 for each dependent (e.g. spouse). If you own a house in Mexico, these figures are reduced, as the income requirement assumes your income will pay for rented accommodation during your stay.
Mexperience publishes a regularly updated Mexico Cost of Living Report. The index illustrates the costs across a comprehensive basket of goods and services in Mexico.
In our guide to Money in Mexico you'll find an online Currency Converter, or see the section further down this page which discusses your retirement finances.
Also remember that currencies fluctuate and you may need to allow a few percentage points either way into any figures you're working with, to allow for this.
See Also: Banks, Banking and Credit in Mexico
If you are 50 years of age or older and can prove a fixed income for yourself and each dependent (e.g. spouse, children), getting a retirement permit should be a formality.
For comprehensive information about Immigration Policy in Mexico, including permits suitable for retirees, read our guide to Immigration and Visas in Mexico, and part of our guides to Living and Working in Mexico.
Food & Drink: For Europeans, most of the food and drink you enjoy in Europe can be obtained in Mexico. Exceptions include foods like Marmite and Coleman's mustard, or Heinz Baked Beans but you can get this kind of stuff shipped over with friends and family when they visit, so why worry? European wines are widely available now, although you can expect to pay a premium for these.
For Americans and Canadians, most foods you can buy in the US can now be obtained at major supermarkets and hypermarkets in Mexico. Specialist foods which are particular to a country (e.g. Parma Ham from Italy) will be available in major towns and cities, but at a higher price than what you may be used to paying for them at home.
See Also: Shops and Shopping in Mexico
Radio and TV: All major US networks and other global channels (CNN, Fox, BBC World, Bloomberg, Disney, Discovery, etc) are available in Mexico via cable or satellite TV. Most cities have a local cable service provider offering different packages of channels; the Sky brand of satellite television is available universally in Mexico. DirecTV is no longer available. People with full-sized satellite dishes and sophisticated decoders may access even more channels.
Newspapers and Magazines: Generally, European newspapers, with the exception of Spain's El Pais, are not available in Mexico. Major European dailies such the FT and Le Monde can usually be found in major airports in Mexico. American editions of international magazines such as Newsweek, Time and Business Week can be bought in most main towns and cities in Mexico. Many European and American based magazines will deliver to Mexico by regular mail if you subscribe. Note, also that you can now access most journals online via the Internet, either free or via paid subscription. If you enjoy reading the paper version, you can still subscribe, although most expats get their news online these days.
See Also: The Media in Mexico
Update: 'The News', an English newspaper published in Mexico, re-launched in October 2007, after a five year break in publication. The paper is available in Mexico City and about a dozen or so provincial towns and cities, principally the colonial cities popular with expats and major beach resorts.
Tea: Coffee is far more common than tea in Mexico. Tea is generally drunk black (often with a slice of lemon) or alternative herbal teas, like chamomile, lemon or mint. Many places in Mexico are situated at altitude, and in these areas, the water boils at a lower temperature than it does at sea level. Some say this affects the taste of tea and, therefore, coffee becomes an alternative. By the way, Mexico produces some very fine coffees. Chiapas and Veracruz are the two main coffee-growing states in Mexico.
It's important to know that, if you have a health care plan in the US or Canada, most policies do not cover your health care requirements in Mexico.
Also, Mexico has no reciprocal health care agreements with other any other countries, so even if you have government-funded health-care in Europe or a health plan in Australia, for example, these will not cover you in Mexico, either.
It's essential to make arrangements for your health care when you retire in Mexico. Mexico does offer excellent health care facilities, some in line with top US medical centers, but they are private and all medical care must be paid for in full.
There are several health insurance companies in Mexico who sell medical insurance products.
Some US and Canadian plans do offer coverage in Mexico in return for an additional top-up fee, but the conditions may be strict and the time frames limited: check with your insurance company for details.
It is more difficult and more expensive to get health cover after the age of 65; this also applies in Mexico.
Specialist insurance companies do exist which provide health care in Mexico, sometimes for lower premiums than you would pay for a private health care plan back home. It's worth getting some quotes to compare as health care insurance is likely to be one of your higher retiree expenses in Mexico.
Detailed Healthcare Information: For detailed information about health matters in Mexico, connect to our Mexico Healthcare section here on Mexperience.
See Also: Safety in Mexico
Some Residency Visas (see Immigration, below) allow you to work and take part in some lucrative or paid activities, although you will need to pay Mexican tax on all your income derived from them, including any rental income you may receive from renting part or all of a house you may own in Mexico.
Work that you sell (for example, photographs, writing or art) may be exempt from Mexican taxes if it is sold outside Mexico. Also see Taxation notes, below.
Read the information on Immigration and Visas in the living and working section and also check with your local Mexican Consulate for further information as rules can change without notice.
Whether you rent or buy will depend on your plans and aspirations with regard to retirement in Mexico, your attitude towards property as an investment, and the resources available to you.
You may sell your home and buy a new home in Mexico, if your move to Mexico is a permanent one.
If you are planning to live in Mexico for only part of each year, then you may decide to rent your house in your home country (if you own one) and use the proceeds to fund the rental of your house while in Mexico; or trade down to a smaller house back home and use the remaining proceeds to buy a second home in Mexico.
If you do decide to buy property in Mexico, you may consider renting first to get a feel for the area(s) you're thinking about moving into, before committing to a place or neighborhood.
Historically, most property deals in Mexico have been transacted in cash, although Real Estate Financing in Mexico is being made available today through various specialized finance houses and some mainstream banks.
It may be easier and less expensive to finance your Mexican house from a bank in the USA, and some banks are now offering mortgages in the US for homes purchased in Mexico. European banks will not normally finance a house in Mexico as the market is unknown to them.
Connect to the Guide to Real Estate in Mexico here on Mexperience for the latest information and comprehensive advice about renting, buying, selling and financing property in Mexico.
Mexico's banking system has improved enormously over the last decade and banks are today much more customer-focused than ever before. A genuine choice of services is beginning to emerge through banks introducing innovate products in an ever-increasingly competitive market.
Charges and interest rates on borrowing are still higher than you may be used to at home and the conditions for keeping an account open may be stricter than you expect.
Most banking in Mexico is still done "in person", which can make waiting lines at banks longer than you would ideally like. However, Internet banking is now widely available in Mexico, and it is possible to bank online, pay bills and transfer money to others. The procedure for opening an online account can be bureaucratic but it's worth it, as it will save hours of time each year not lining up at banks to transact your business.
Most Mexicans still prefer to bank in person, and this means that lines at the local bank—especially on pay weeks ("quincenas)*—can be enormous as literally millions of people line up to cash checks and pay credit cards and other bills.
Mexico has a selection of banks to choose from, and you will need to open an account locally, for day-to-day management of your finances.
It will probably be best if you keep an account active back home, too, especially if you continue to have social, family, investment or business connections there.
You should seek professional financial advice for all matters regarding finance and taxation if you are considering a retirement in Mexico.
See Also: Read the Guide to Banks, Banking and Credit in Mexico, part of our Living and Working guides on Mexperience for further details.
*The Spanish word Quincenas, literally meaning "fifteens", translates well into the English word "fortnight".
You will need to contact the tax authorities in your home country and ask them what the current tax policy is on, for example, pension and investment income earned in your home country and paid while you are resident overseas.
In some cases, you may need to watch out for double-taxation; that is, your income being taxed in your home country (or the country where the income is generated) as well as in Mexico where you are living in retirement.
Mexico now has tax 'Double Taxation Agreements' with many countries (including the USA, Canada, the UK, Ireland, and some other European countries); in these cases, you will normally get to choose which country you wish to be taxed in and will only be taxed on your income once.
Because of the complex and changing nature of taxation and the fact that everyone's situation will have unique characteristics, it's essential that you plan for tax efficiency when you retire to Mexico.
As a first step, you could contact your local tax authorities in the country where you reside and ask for information and advice which they should give you free of charge. Thereafter, some fees spent on professional tax planning advice, from a qualified financial adviser or accountancy firm will pay dividends in the long term.
Moving to a foreign country can in some cases provide some useful opportunities to maximize your earning's tax efficiency. However, because the laws change every year, it's essential to consult a professional who is dedicated to reading the latest information and news and who understands not just Mexico's tax system, but the tax system where you reside and, if different, the one where your income(s) is(are) generated.
Mexico's Treasury department is known as "Hacienda" or its full title, Secretaria de Hacienda y Credito Publico; the web site is www.hacienda.gob.mx .The English section only deals with investor's info; tax matters and advice are in Spanish only.
Mexico's tax system, like most countries, is involved and complex in places. You will almost certainly need the help of a local accountant to help you file your return (there are plenty to choose from and the fees are very reasonable), unless you are good with Spanish and have the inclination to engage with the necessary procedures and paperwork.
Although advice and information is available online, it's best to seek professional help. Also see the Contacts page.
It's essential that you get proper advice and plan carefully in relation to your tax position before you make the decision to retire in Mexico and you should consult your accountant, qualified financial advisor or other tax specialist in this respect.