Can I Retire in Mexico?

The ruins of Tulum in Mexico overlooking the Caribbean Sea in the Riviera Maya.
Can you retire in Mexico? We have answers to some of your most important questions.

If you’ve been reading up on the best retirement options in the U.S. but nothing is checking all your boxes, you might want to ask yourself: Can I retire in Mexico? An international move like this is a major decision, so you’ll need unbiased information about the logistics, safety concerns, financial considerations, and lifestyle.

Many active adults are looking at Mexico as an intriguing retirement option because of the year-round warm weather and the amazing food and drinks. Since it’s an international destination, each time you or your visitors cross the border, it’s necessary to go through customs. But once you get the hang of that, you’ll learn ways to circumvent the long lines and save time on travel. Two resources for this are Trusted Traveler Program and TSA PreCheck.

But first things first: We’re going to answer your questions and explain what you need if you plan to become a resident and buy property in Mexico.

The Is Mexico Safe for Retirees?

A 55+ woman taking a picture while having fun during her retirement in Mexico.

There are more than 1.5 million Canadians and Americans living in Mexico, even if it might have an unsavory reputation based on media coverage and movie portrayals. And while certain parts of the country could be hazardous and should be avoided, most of the country is safe. It all depends on the area you choose—tourist areas like Puerto Vallarta are better than ones right along the southern U.S. border.

Mexico does has areas with higher crime rates, but there are also dangerous cities in the U.S. This doesn’t mean that the entire country is unsafe. A few of the safest places to retire in Mexico include Lake Chapala, Merida, San Miguel de Allende, Tulum, and Oaxaca.

Here’s some more helpful information: There are also nine U.S. consulates in Mexico and a U.S. Embassy in Mexico City.

Can I Afford to Retire in Mexico?

The Basilica of Our Lady of Guadalupe and the cityscape of Mexico City.

Florida and Arizona’s warm weather makes them retirement hotspots, but the cost of living in both states continues to rise. You’ll be surprised to see how much lower the cost of living is in Mexico, but this also depends on where you live. Being near a larger, established town will cost more since you’ll be closer to more amenities.

On average, the cost of a home, food, health insurance, utilities, and other necessities averages about $30,000 per year or $2,500 a month, according to SmartAsset. This is approximately half of what it costs to live in the U.S. You’ll have to understand how the exchange rates work, and to save money, you can live like a local and patronize street vendors and family-owned businesses.

Can I Buy Property in Mexico?

View of colorful buildings along Callejon de los Sapos in Puebla, Mexico.

If you’re planning to buy property in Mexico, it’s smart to work with an English-speaking real estate agent and attorney if that’s your first language. Explore the different areas first, and try renting in one or two for about six months until you’re confident about the region. The general process of buying property in this country is similar to that in the U.S. unless the location is near the border or along the coasts.

Non-Mexican nationals looking to buy property in certain areas have to work with authorized banks and set up special trusts known as fideicomisos. With one of these, you’ll have complete ownership rights as a buyer but a bank will hold the legal title to your property as a trustee.

What Documents Do I Need to Live in Mexico?

The Mexico flag flying with a blue sky with white clouds behind it.

Even if you’ve zeroed in on a property, you may still be wondering: “How can I retire in Mexico?” You’ll need to apply for a permanent resident visa at a Mexican consulate—there are many in the U.S. The application process isn’t too complicated; they will want to see a valid U.S. passport, a color photo, and proof of your economic solvency. Examples of the latter include:

  • Documents showing that you have bank or investment accounts with a monthly balance of at least $181,968, maintained for one year, OR
  • A monthly pension or Social Security payments of at least $4,549 (after taxes) from the past six months

Once you have the documentation, you can fill out the visa application form. The fee for this is $48. The requirements can change, so it’s best to call the consulate first before beginning an application. Temporary visas are also available if you’re planning to stay for shorter amounts of time.

What Do I Need to Know About Health Care in Mexico?

A doctor holding hands with her patient.

According to AARP, The Instituto Mexicano del Seguro Social (IMSS) is Mexico’s public health insurance agency, and American retirees with legal residency qualify to sign up for this program. There are small premiums to pay, but private insurance coverage is also offered. The country also offers a free health care system from The Institute of Health for Well-being (INSABI). Mexican residents ages 60 and up can also apply for the INAPAM discount cards.

Many residents pay out-of-pocket for routine care, which isn’t expensive. Medicare doesn’t cover most of the medical care in Mexico, but if you have a serious illness or injury, you have the option of traveling to the States for treatment.

How Do Taxes Work If I Retire in Mexico?

Sunset view of the Santo Domingo Cathedral in the historic Oaxaca City in Mexico.

Sorry – U.S. residents who retire and establish residency in Mexico still must file U.S. tax returns each year. That’s because federal taxation isn’t based on your place of residence; it’s based on your citizenship.

You’ll also be paying Mexican real estate taxes on your property, but this amount averages a few hundred dollars yearly. If you rent out your property in Mexico, you’ll need to file disclosure forms if you have $200,000 or more in foreign assets and/or $10,000 more in Mexican bank accounts. The law also requires that you report any rental income.

Can I Retire in Mexico?

A happy senior couple on a beach in Mexico.

Anyone who receives a permanent resident visa for Mexico can retire in this beautiful country, but doing so successfully requires patience and careful research. The best way to approach it is to work with trusted professionals who can help you explore different areas and properties and support your international aspirations for your retirement.

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