Lifestyle

How to Retire in Mexico

If you long to live somewhere where the dollar’s value goes far, with excellent, sunny weather and close proximity to international airports, you might consider retiring in Mexico. With many different beach towns and denser, more populous cities to choose from, the country is rich with culture, food, activities, as well as a thriving expat scene. If you’re eyeing Mexico for retirement, read our ultimate guide so you can properly understand visa requirements, cost of living, and other important details.

C.E Larusso

C.E Larusso

Published October 6th, 2023

Table of Contents

Key Takeaways

Many look to retire in Mexico to enjoy its low cost-of-living, excellent food, and sunny weather

Many places in Mexico have homes as inexpensive as $150,000, though the average is closer to $250,000—you’ll find that you’ll get a lot more for your money than in the US

While you’ll need to prove a certain amount of savings and income, the visa process is relatively simple

If you long to live somewhere where the dollar’s value goes far, with excellent, sunny weather and close proximity to international airports, you might consider retiring in Mexico. With many different beach towns and denser, more populous cities to choose from, the country is rich with culture, food, activities, as well as a thriving expat scene. If you’re eyeing Mexico for retirement, read our ultimate guide so you can properly understand visa requirements, cost of living, and other important details.

How to Retire in Mexico: Travel Tips & Immigration Guide

Before deciding to retire in Mexico, you should travel there and spend time in various locations to find the best place to live—each state and city is different, some offering a more dense, city feel (such as in Mexico City) while other locations are slow-paced beachside villages. There’s something for everyone, but you’ll need to find the best spot for you and your needs.

You can start with either a tourist visa, which is valid for six months, or a temporary resident visa, which allows you to stay for up to four years. Both visas require you to visit your local Mexican consulate, complete all the application forms, and confirm you can financially support yourself while you are in Mexico.

If you need a long-term rental, you might be required to have a fiador, which is a co-signer who lives and owns property in Mexico, or a Póliza Jurídica, a coverage policy that will pay for expenses in case there is a dispute with your landlord—it usually costs 35% of your first month’s rent. Many realtors and attorneys can assist you with these forms.

Why do Retirees Choose to Live in Mexico?

There are several reasons why you or other retirees might choose to live in Mexico, namely:

  • Cost of living: You can live a very luxurious lifestyle in Mexico for only a fraction of the cost that you would spend in the US for the same quality of living; if a beachfront property is out of reach in America, Mexico can make that dream a reality.
  • Natural beauty and weather: Mexico is a sunny, warm place, with stunning beaches and other natural sites.
  • Low healthcare costs: Mexico has a robust medical system, and healthcare is much cheaper there than in the US. In addition, because of its large expat and tourist population, most medical professionals speak excellent English, so there’s no language barrier to worry about.
  • Proximity to US: If you still have family in the US, or just want to travel during retirement, rest assured—Mexico has several international airports, and many flights to the US are under four hours.

Average Cost to Retire in Mexico

Average rent in Mexico: $500–$750

Average home price in Mexico: $200,000–$300,000

Average monthly grocery costs in Mexico: $200

Average cost of living in Mexico: $1,500–$2,000

The cost of living in Mexico is quite low overall, but it can vary depending on whether you choose to live in a city or a more remote location, and your particular lifestyle. Little luxuries, like eating out at restaurants, attending cultural events, golfing, and more, cost less in Mexico, but these activities do add up. That said, you can live very comfortably for a fraction of the price you would pay in the US.

Note that Mexico charges a sales tax (VAT) of 16% on manufactured goods, with the exception of food. Property tax is usually low—rarely higher than $200 a year—and might be discounted, depending on your state of residence, if you pay it early in January.

Immigration Programs for Foreigners Looking to Move to Mexico

It’s fairly simple to obtain a visa to move to Mexico, provided you have a steady income or significant savings. You can apply for temporary visas to get a feel for different places in the country—there are six month visas and four month visas available, in addition to permanent visas. There are also investment visas if you wish to invest in real estate before retirement and later move when you reach retirement age.

Applying for a Visa

The process to obtain a permanent residency visa to live and retire in Mexico is not particularly difficult. First, you’ll need to complete a visa application form with your local consulate and bring the following to your appointment:

  • A valid U.S. passport
  • A photo for your Mexican passport
  • $48 application fee
  • Proof of economic solvency: You’ll need to show that you have maintained bank accounts with a monthly balance of at least $218,000 for the past year OR that you have income from work, retirement accounts (including Social Security) that equal at least $5,460 per month over the last six months (note that some consulates require 12 months).

Most consulates can process visas very quickly—sometimes on the same day. After entering Mexico with your visa, you’ll need to visit an “Instituto Nacional De Migración” (INM) office to receive your resident ID.

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Tax Considerations for US Immigrants Living in Mexico

If you are a US citizen or Green Card holder, you will need to file a US tax return every year, even if you live and work in Mexico. In short, as long as you retain US citizenship—you’ll need to pay Uncle Sam.

Taxable foreign income for Americans residing in Mexico includes:

  • Wages
  • Interest
  • Dividends
  • Rental property income
  • Retirement account distributions

In addition, if you have $10,000 or more held in a Mexican bank account at any time during the tax year, you will need to file a Foreign Bank Account Report (FBAR). If any of your foreign assets are valued at over $200,000, you might need to also file a FATCA Form 8938.

There are ways to avoid double taxation. The Foreign Earned Income Exclusion allows US citizens in Mexico to exclude a portion of foreign earned income, under certain requirements, and the Foreign Tax Credit allows you to claim a dollar-for-dollar credit on Mexican taxes if, again, you meet the requirements.

Finally, Mexico and the US are in agreement to be “tax treaty” countries, helping to reduce the amount you pay in taxes. We advise that you speak to a tax professional to fully understand the tax implications of retiring in Mexico, given your particular assets, income, and other factors.

Housing Options in Mexico

As with many other countries, living in a city will be more expensive than living outside of one. That said, Mexico is a very affordable country, and a one-bedroom apartment in Mexico City only costs $400–$500, on average. Luxury units in nicer areas of the city could run a little higher, somewhere in the $650–$850 range. Buying a one-bedroom condo in Mexico City will cost $85,000–$300,000, on average, depending on amenities, location, size, and other factors.

The smaller city of Campeche is less expensive, with one-bedroom rentals starting around $250. Buying a condo of similar size in Campeche will run you between $85,000–$150,000, on average.

Utilities and property taxes will set you back around $300 per month. Overall, real estate is much cheaper in Mexico than it is in the US, thanks to the dollar’s strength against the peso. To buy a home in Mexico, you should set up a “direct deed” with a local corporation or a bank trust (fideicomiso); this will allow you to safely buy property in restricted zones.

How is the Retirement Community in Mexico? Is it Easy to Fit In?

Many expats choose to live in Mexico, largely due to its low living costs and close proximity to the US. In addition, since Spanish is so widely spoken in the US, it’s likely many retirees are able to learn the language quickly, having been exposed to it for much of their life.

Many expats choose to live in the wealthier beach cities, such as Los Cabos, La Paz and Puerto Vallarta. Because they cater to tourists, these locations have plenty of amenities to keep you comfortable, like restaurants, bars, golf courses, and shopping centers.

The city of San Miguel de Allende is another popular spot for expats, with 10,000–20,000 foreign residents residing there. Given its popularity, many locals speak English, and it is centrally located: it’s just three hours from Mexico City, and 10 hours from the Texas border.

Best Places to Retire in Mexico

Choosing where to retire in Mexico means deciding on your priorities. Is it more important for you to live a laid-back lifestyle or be near lots of people and cultural activities? Do you prefer a large city or a small one? How do you want to spend your retirement days? Mexico is home to many different cities, towns, and villages, each with their own style and flavor.

Puerto Vallarta

Puerto Vallarta has become a popular tourist destination, known for its beaches that span the shores of the Pacific Ocean and pleasant year-round weather. The area has a bounty of shops, restaurants, bars, as well as festivals that celebrate everything from tacos to folklore. The city is known as one of the safest locations in Mexico, and has an international airport that makes traveling to and from the US (and beyond) easy. In addition, it’s considered very LGBTQ-friendly.

Average home price: $250,000–$350,000

Average rent: $400–$600

Estimated cost of living per month: $1,000–$1,500

Mazatlán

While Mazatlán is a resort city, it has a different vibe than others in Mexico. It has a colonial center that was recently named a Heritage of the Nation site; most of the old buildings there date back to the 1800s, and have recently undergone restoration. The city has the usual beachside attractions and activities, but isn’t as crowded as similar resort cities; in addition, every February and March, it is home to one of Mexico’s largest Carnival celebrations, drawing many people from around the world. Mazatlán is a thriving destination with a lot of activity as well as a high number of expats and tourists.

Average home price: $200,000–$300,000

Average rent: $300–$450

Estimated cost of living per month: $1,000–$1,500

Oaxaca City

Oaxaca City is another historically-significant city, with its center marked as a UNESCO World Heritage Site for the colonial architecture and indigenous cultural influence. The state has also garnered lots of recent attention for its area-specific cuisine, with dishes like mole and tlayudas—not to mention the mezcal. In addition, Oaxaca is known for its rich arts and crafts scene; visitors and locals can practice pottery, textile-making, and embroidery, as well as buy these finely-made items from local artisans.

Average home price: $150,000–$250,000

Average rent: $300–$500

Estimated cost of living per month: $500–$1,000

Mérida, Yucatán

Mérida is the capital of the state of Yucatán and is a fairly large colonial city, just 22 miles off the coast. You’ll be close to a major international airport for easy access to global destination, but can enjoy the small-town vibe that Mérida offers, with quaint tree-lined streets and colorful architecture. It is culturally-rich, too, with lots of music and theater events, as well as festivals and concerts year-round. Finally, it is known to be one of the safest cities in Mexico.

Average home price: $200,000–$300,000

Average rent: $460–$600

Estimated cost of living per month: $800–$1,200

San Miguel de Allende

San Miguel de Allende has a thriving arts scene, with many galleries and studios throughout the city as well as several arts festivals every year, including one for film and one for writers. The area draws a lot of expats, so you won’t feel alone walking its charming cobblestone streets, sampling the cuisine at its many restaurants, or visiting its food markets.

Average home price: $250,000–$350,000

Average rent: $500–$750

Estimated cost of living per month: $1,000–$1,500

Cozumel

An island off the coast of Mexico's Yucatán Peninsula, retiring in Cozumel is one way to live surrounded by stunning natural beauty. Enjoy scuba diving, paddle boarding, snorkeling, and other water activities in this sunny, laid-back community with a rich Mayan and Mexican cultural tradition. There is regular ferry service to Playa del Carmen, and it’s easy to get around the island on just a bike.

Average home price: $250,000–$350,000

Average rent: $500–$700

Estimated cost of living per month: $1,500–$2,000

Frequently Asked Questions

How much money do you need to retire in Mexico?

To obtain permanent residency, you’ll need to show the Consulate that you have maintained bank accounts with a monthly balance of at least $218,000 for the past year, or that you have income from work, retirement accounts (including Social Security) that equal at least $5,460 per month over the last six months (note that some consulates require 12 months).

How much monthly income do I need to live in Mexico?

A retired couple should expect to spend roughly $2,500 to $3,500 per month in Mexico to live very comfortably. You can definitely survive on less, but budgeting for $3,000 or so will give you wiggle room to enjoy nights out, cultural events, and some local travel.

Do they speak English in Mexico?

Yes, many people speak English in Mexico, especially in dense city areas. Some less dense places that have lots of tourism—such as Puerto Vallarta—also have many English speakers. That said, knowing some Spanish before you move can be extraordinarily helpful and also be a way of showing the locals that you care about their culture, from their language to their food and history.

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C.E Larusso
C.E Larusso

A professional content writer, C.E. Larusso has written about all things home, finance, family, and wellness for a variety of publications, including Angi, HomeLight, Noodle, and Mimi. She is based in Los Angeles.

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C.E Larusso
C.E Larusso

A professional content writer, C.E. Larusso has written about all things home, finance, family, and wellness for a variety of publications, including Angi, HomeLight, Noodle, and Mimi. She is based in Los Angeles.

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To empower a confident, worry-free retirement for everyone.

Legal

Retirable, Inc. ('Retirable') is an SEC registered investment advisor. By using this website, you accept our Terms and Conditions and Privacy Policy. Retirable provides holistic retirement planning services, which are available only to residents of the United States. You must be at least 18 years of age to become a Retirable Premium user. Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities.

Investing involves risk and past performance is not indicative of future results. Increased spending increases the risk of depleting your savings and performance is not guaranteed. It is very important to do your own analysis before making any decisions based on your own personal circumstances.

For more information, see our Form ADV Part II and other disclosures.

Retirable is a financial technology company and is not a bank. Banking services provided by Thread Bank, Member FDIC. The Retirable Business Visa® Debit Card is issued Thread Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa cards are accepted. FDIC insurance is available for funds on deposit through Thread Bank, Member FDIC. Pass-through insurance coverage is subject to conditions.

Your deposits qualify up to a maximum of $3,000,000 in FDIC insurance coverage when placed at program banks in the Thread Bank deposit sweep program. Your deposits at each program bank become eligible for FDIC insurance up to $250,000, inclusive of any other deposits you may already hold at the bank in the same ownership capacity. You can access the terms and conditions of the sweep program athttps://go.thread.bank/sweepdisclosure and a list of program banks athttps://go.thread.bank/programbanks. Please contact [email protected] with questions on the sweep program.

* The interest rate on Retirable Consumer Deposit Account Tier 2 is 3.4% with Annual Percentage Yield (APY) of 3.45%. The interest rates are accurate as ofSep 19, 2024. Rate is variable and is subject to change after account opening. Fees may reduce earnings.

** Refer to the fee schedule in your Consumer Deposit Account Agreement

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