How to Retire in Mexico

Co-authored by Jonathan DeYoe, CPWA®, AIF®

Last Updated: February 22, 2023 References

Retirement, in general, can be an exciting time in your life. Retirement to an exotic place like Mexico can be downright amazing! An increasing number of Americans, Canadians, and Europeans have decided to retire to Mexico for a variety of reasons. The housing market is reasonable, the scenery is amazing, prices for day-to-day food items are inexpensive, and the health care is excellent. But before you pack your bags and head off to spend your retirement years in Mexico, consider the following steps first.

Part 1

Part 1 of 2:

Putting All the Legal Details in Order

1
Consider if you need to hire a relocation consultant or specialist. Moving between countries can be complicated. And there’s no need to learn all the details on your own. Relocation consultants or specialists exist that can help you with all the details your personal situation requires. Do keep in mind, however, that hiring a consultant or specialist will add to your retirement expenses, but in the long-run, it may be money well spent.^{[1]
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- To find a consultant or specialist, start with a search on the internet.
- You can use sites like Google or Yelp to read reviews and ratings from previous customers to determine if a particular consultant or specialist would be recommended.
- Word of mouth referrals are also a great way to find someone. If you know other people who have retired to Mexico already, ask them to recommend a consultant or specialist that they had a good experience with.
- Some consultants offer fixed fee services where they’ll only spend a specific amount of time on your situation and complete a specific list of items. If you need more help, or have a lot of questions, the cost for a consultant may be more expensive.
2
Assess your finances. The cost to retire is different for everyone and depends on a number of individual factors such as: the type of accommodation you want to live in; whether you want to hire service companies to do housework or yard work for you; how much you want to dine out and what types of entertainment you want to enjoy; and so on. While it may seem cheaper, based on stereotypes, to retire in Mexico, that is not always the reality.^{[2]
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- Every country will have a different social infrastructure with different social costs.
- You can approach your finances from two perspectives:
  - Perspective 1: Review your retirement savings to determine how much money you have to spend on an annual basis. Then, work to find a lifestyle in Mexico that falls within this budget.
  - Perspective 2: Research how much everything will cost you to retire in Mexico (rent, utilities, food, insurance, etc.) and then determine how much money you need every year to live that lifestyle.
- If you find that your retirement savings aren't enough to meet your estimated expenses, you can either continue to work until you’ve saved enough money, or you can look for alternatives that are less expensive.
- Don’t forget to also budget for possible emergencies, especially if those emergencies will require you to travel back to your home country on short notice.
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3
Know your tax situation for living in Mexico. Depending on your financial situation, you may want to hire an accountant or tax specialist to help you prepare your taxes. One thing you need to consider is double-taxation. If you have any kind of income (including investment income) in your home country, you will need to determine if you need to pay tax in both countries, or only one.^{[4]
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- Mexico does have double-taxation agreements with countries like the United States, Canada, the United Kingdom, Ireland, and some other European countries.
- If your home country has a double-taxation agreement with Mexico, you will only have to pay tax in one country. Your tax specialist or accountant will help you determine in which country you should pay your taxes.
- Keep in mind that tax laws are constantly changing and you need to keep yourself up-to-date.
- You may also need to enlist the help of an accountant in Mexico to assist you with Mexican tax rules and regulations.
4
Determine if you want to apply for an immigrant or non-immigrant permit. Mexico has both Immigrant and Non-Immigrant permits for foreigners. Immigrant Permits are for foreigners who wish to live long-term in Mexico. Non-Immigrant Permits are for foreigners visiting Mexico for a limited period of time. You will need to decide which permit is best for you. You may also wish to consult an immigration expert before you make a decision.^{[5]
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5
Review the qualifications for a Non-Immigrant permit. There are two types of Non-Immigrant Permits. One permit, called the Vistante, is for foreigners staying in Mexico for 6 months or less. The other permit, called the Visa de Residente Temporal, is for foreigners who want to live in Mexico for longer than 6 months but less than 4 years.^{[6]
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- The Vistante cannot be renewed and must be applied for in-person when you arrive in Mexico.
- The Visa de Residente Temporal can be renewed, but only for a maximum of 4 years. It must be applied for before you arrive in Mexico.
6
Understand the qualifications for the Immigrant permit. Immigrant permits, also known as the Visa de Residente Permanente, are intended for foreigners who want to live permanently in Mexico. In order to qualify for this type of via, you need to meet one of the following criteria:^{[7]
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- You must have close family connections in Mexico, or
- You must apply for retirement status and show you have enough money to sustain yourself in Mexico, or
- You’ve had a Temporary Resident status for 4 years already, or
- You’ve had a Temporary Resident status for at least 2 years due to marrying a Mexican citizen or permanent resident, or
- You’ve been granted residency because of humanitarian grounds or because of political asylum.
- A new points systems was introduced in 2016 that will determine your eligibility. Information about this points system will eventually be available online.
7
Know the details of your health care coverage in Mexico. If you have health or dental insurance in the United State or Canada (including government-funded health care), it is unlikely that you will be able to take advantage of it while living in Mexico. All medical facilities in Mexico are private and medical care usually needs to be paid in full at the time of service. It is important that you obtain the proper type of health insurance to cover anyone living in Mexico.^{[8]
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- Health insurance coverage may be more difficult to obtain, and more expensive, after you turn 65. However this is generally the same in most countries, not just Mexico.
- Shop around for Mexican health insurance and obtain multiple quotes before making a final decision.
- Make sure your health insurance is in place before you cross the border into Mexico. If you need medical care after you’ve entered Mexico, but before you’ve purchased insurance, an insurance plan will not cover the costs retroactively.
- Note that permanent residents of Mexico (i.e. foreigners who have the Visa de Residente Permanente) can have their healthcare subsidized by the Mexican government, which will make it much more affordable than the US.
8
Enroll in Mexico’s retirement benefits program. Mexico offers a retirement savings program for those who are 60 years of age or older and those who have a permanent resident visa (i.e. the Visa de Residente Permanente). Enrolling in this program will provide you with a number of discounts on things like: doctor and dentist visits; hospital visits; medical lab work; prescription drug; cultural activities; transportation; and hotels. If you qualify for this program, sign-up as soon as you can so you can enjoy the associated benefits.^{[11]
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9
Open a Mexican bank account. The banking system in Mexico has improved significantly over the last decade and internet banking is now widely available. It is a good idea to open a bank account in Mexico, but also to keep a bank account in your home country (if regulations allow).^{[12]
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- Note that the process to open a new bank account at a Mexican bank is quite involved and may take a while. Don’t expect to drop into a bank for a few minutes in order to open a new account.
- The majority of Mexicans still prefer to do their banking in the branch with a teller. This means that at certain times on certain days the line at the bank can be rather long.

Part 2

Part 2 of 2:

Choosing Where and How to Live in Mexico

1
Be sure you have a sense of adventure. Living in Mexico will be different from living in the United States or Canada. If you aren’t ready for big changes and new adventures, relocating to Mexico might be somewhat of a culture shock. Also keep in mind that living in Mexico on a full-time basis will be much different than visiting Mexico on vacation.^{[13]
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2
Understand the costs of living in Mexico. In general the cost of living in Mexico will be less expensive than living in the United States or Canada.^{[14]
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- Groceries, especially fruits and vegetables, are less expensive and fresher than you’ll find in the US or Canada.
- Public transportation and domestic flights are less expensive, or getting less expensive.
- Some utilities, like electricity, can be more expensive than the US or Canada, unless you pay attention to your consumption.
- Water is less expensive, but not always of good quality. Most Mexicans opt to buy and use bottled water rather than use tap water. Bottled water in Mexico is much more expensive than it is in the US or Canada.
- Items like clothes, electronics, appliances, etc., are more expensive in Mexico than in the US or Canada. Depending on the regulations regarding importing these items, you may want to purchase some of these things before you move.
- Cars are more expensive in Mexico.
- Gasoline costs are regulated by the government, not by the oil market. While this means they do not fluctuate as much as in the US or Canada, they may be more expensive.
- Rent in Mexico is fairly equivalent to what you’d find in the US. Areas with more foreigners will be more expensive, areas with more locals will be less expensive.
3
Decide whether you want to live in Mexico full-time or part-time. Retirees move to Mexico on either a full-time or part-time basis. Part-time residents usually own a home in their home country and either own or rent a home in Mexico. These same part-time residents may live in their home country for the summer months and then move to Mexico for the winter months.^{[18]
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- Whether you want to move to Mexico on a part-time or a full-time basis may depend upon your family connections in your home country. You may wish to spend half the year in your home country in order to see your children or grandchildren regularly.
- If you choose to live in Mexico on a part-time basis, you may also need to decide what you want to do with any property you own when you’re not living in it. You can either keep it empty and pay minimal utilities and the associated insurance. Or you can consider renting out the property when you are not there.
- If you decide to rent one of your properties when you’re not using it, you may wish to consider hiring a property management company. Considering you will be quite far away, you may not be able to handle all the landlord-related duties personally.
4
Evaluate the safety of various regions in Mexico. When visiting Mexico on vacation and staying on resort properties, your safety is pretty much guaranteed. Venturing outside the resort areas will be a little different and not all areas of Mexico are equally safe, so you'll need to put in some extra effort deciding where to retire among those cities. Make sure you do your research regarding the safety of the different areas you want to live in, especially the safety of these areas for foreigners.^{[19]
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- A great place to start your research is on the United States Passport and International Travel website for the US Department of State. The website has details on the safety of the states and cities within Mexico for foreign travelers.
- The website can be found at http://travel.state.gov/content/passports/en/alertswarnings/mexico-travel-warning.html.
5
Determine if you want to rent or buy a property in Mexico. Both renting and owning property in Mexico is an option. Rental costs are pretty similar to those in the United States and Canada, depending on the location. And renting may give you more flexibility to move locations on shorter notice if you don’t like the house or location where you’ve rented.^{[20]
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- Buying property in Mexico is somewhat similar to buying property in the US or Canada. Costs are fairly inexpensive, although it depends on the specific area.
- If you do decide to buy property in Mexico, make sure to consider not only the location but the local infrastructure and amenities.
- Note that Mexico has restricted zones within 100 kilometres of the US border and within 50 kilometres of the coast. While foreigners are able to own property in these restricted areas, the property must be purchased through a land trust.
- You do not need to have resident status in Mexico to own property.
- Financing property in Mexico is not only more difficult than in the US and Canada, it is significantly more expensive. While it is possible to get a mortgage through a Mexican bank, you may want to consider purchasing the property without financing to avoid the extra expense and hassle.
- If you buy property in Mexico you will need to work with a Notary Public. A Notary Public in Mexico is not the same as a Notary in other countries. In Mexico, Notary Publics are appointed by the State government. They have extensive education and work experience, and are required to pass a certification exam.
6
Learn how the locals live. One of the best ways to reduce your expenses in Mexico is to find out how the locals live and where they shop. Mexico has a large tourist industry which can significantly increase the costs of average items like groceries. As someone living in Mexico on retirement savings, you want to be sure your paying the same prices for things as the locals, not the tourists.^{[23]
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Expert Q&A

Question

Is retiring in Mexico worth it?

Jonathan DeYoe, CPWA®, AIF®
Financial Advisor
Jonathan DeYoe is a Financial Advisor and the CEO of Mindful Money, a comprehensive financial planning and retirement income planning service based in Berkeley, California. With over 25 years of financial advising experience, Jonathan is a speaker and the best-selling author of "Mindful Money: Simple Practices for Reaching Your Financial Goals and Increasing Your Happiness Dividend." Jonathan holds a BA in Philosophy and Religious Studies from Montana State University-Bozeman. He studied Financial Analysis at the CFA Institute and earned his Certified Private Wealth Advisor (CPWA®) designation from The Investments & Wealth Institute. He also earned his Accredited Investment Fiduciary (AIF®) credential from Fi360. Jonathan has been featured in the New York Times, the Wall Street Journal, Money Tips, Mindful Magazine, and Business Insider among others.

Jonathan DeYoe, CPWA®, AIF®

Financial Advisor

Expert Answer

It depends! When you ask retirees what makes them happy, two things filter to the top: health and relationships. When you retire in a new country like Mexico, you're essentially starting over without a social network. Yes, you can video call with people, but it's not the same as spending physical time with someone.
Question

I was born in Mexico but am now a US citizen. Can I retire in Mexico?

Community Answer

Yes, you can. If you want to go see your family or just have a nice time in the place you grew up in, retiring there is a great option. You can live there while still a U.S. citizen, but as you must know, it would help to change citizenship.