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Permanent or Part-Time Residence in Mexico

Whether you retire permanently in Mexico or live here say, only during the winter months, is up to you and your lifestyle choices. This choice is usually guided by people’s social and family ties back home. It takes, on average, between 18-26 hours of traveling to get to Mexico (door-to-door) from western Europe; between 4-8 hours from Mexico to the mid/southern continental States of the USA, and up to 12 hours to travel from Mexico to Canada.

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.

In any event, modern communications have made staying in touch with friends and family easier than ever–at virtually no cost beyond the regular monthly fee for a telephone line.

Retirement Lifestyles and Living Standards in Mexico

For those who know Mexico, retirement here can be part of a dream come true. Retirees in Mexico enjoy a great climate, great food, a rich culture, and warm, friendly, people.

Some retirees move into local Mexican communities and integrate there; this can make the whole living experience in Mexico much more worthwhile and fulfilling.

For those with hobbies, the hobby or interest can almost always be pursued in Mexico. Communications via the Internet can keep you up-to-date with the latest news and information and sports scores if you want to keep abreast of what’s happening back home. If you enjoy participating in sports, Mexico offers the climate, the groups and amenities for you to participate actively.

Many people continue their passion for, or turn to, pastimes like art, photography and writing—using Mexico as their landscape and inspiration. Some find that their work can be sold inside or outside Mexico, supplementing their income.

Other people get involved in social work: helping deprived communities to build new infrastructure, getting involved in charity work, sharing their extensive knowledge and experience of life with others and making a significant and positive contribution to the communities where they live in a wide variety of ways.

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.

Value for Money for Mexico’s Retirees

Everything everywhere costs money and Mexico is no exception. How much you spend will depend on your living choices and 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.

Mexico offers excellent value for money for people who choose to retire here, which is a primary reason why it’s one of world’s top places for foreign retirees.

Connect to our extensive guides to Money in Mexico and also the Mexico Cost of Living Guide for practical advice about money matters and prices you can expect to pay for living in Mexico.

Income Required for a Retirement 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.

Since the immigration reforms which came into effect in November 2012, the law now sets out specific financial requirements for people who wish to reside in Mexico. As part of this, the Mexican immigration authorities require that you demonstrate a proven income in order to obtain a retirement visa in Mexico. Thresholds vary depending whether you are permanently or temporarily resident in Mexico and require either a regular monthly income  or a fixed investment sum, e.g. a pension fund. The Mexico Immigration Guide gives fully updated information about criteria, income requirements for the current year, and application procedures.

Mexperience publishes a Mexico Cost of Living Guide updated annually. The guide illustrates the costs across a comprehensive basket of goods and services in Mexico and helps you to compose a detailed budget based on your individual circumstances.

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.

Amenities Given Up by Retirees in Mexico

Food & Drink: For Europeans, most of the food and drink you enjoy in Europe can be obtained in Mexico. Exceptions include specialty foods like Marmite and Coleman’s mustard, or Heinz Baked Beans, but you can get these shipped over with friends and family when they visit. European wines are widely available now, some at reasonable prices and others at premium prices; although you’ll also find an excellent selection of Latin American wines as well as Mexican wine from Baja California which is excellent.

For Americans and Canadians, most foods you can buy in the US can now be obtained at major supermarkets or 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.

Inevitably, not all the foods you can buy back home will be available in Mexico, although you will find all of the ‘basics’ in plentiful supply in Mexico and you’ll discover ranges of new foods which you can’t get in your home country — and you’ll probably come to miss some of those when you’re living in Mexico and making visits back home.

Radio and TV: All major US TV 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.

Internet Program Streaming: Netflix, plus a range of other similar services (like Amazon Prime) are readily available in Mexico.  You can pay for your subscription using your foreign credit card, your Mexican credit card, or using vouchers you buy at local convenience stores enter the payment reference on the voucher to access the service.

Tea: Coffee is far more common than tea in Mexico. Tea is generally drunk black (often with a slice of lemon) or alternative herbal infusions, 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, Oaxaca, and Veracruz are the three principal coffee-growing states in Mexico, so there’s no need to pay a premium for imported coffees.

Healthcare for Retirees 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 or Canada, 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 offers excellent health care facilities, some in line with top US medical centers, but they are private and all medical care must be paid for at the point of delivery.

There are several health insurance companies in Mexico who sell medical insurance plans.

Some US and Canadian plans may 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’s more difficult and more expensive to get health coverages 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.

Buying or Renting Property for Retirement in Mexico

Whether you rent or buy your retirement home in Mexico will depend on your plans and aspirations with regard to retirement here, 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 you intend to move to Mexico for the long-term, or even permanently.

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—unless you already know the area you want to live in from previous visits/experience, in which case you might only rent for a short time, while you scout a property for purchase.

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. 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.

You’ll need to consider insurance for your property in Mexico, too.  Mexico is subject to hurricanes (if your property is near the sea) and earthquakes (whether you’re by the sea or inland) and it makes sense to protect your investment with an adequate insurance policy.

Banking and Finances for Retirees in Mexico

Mexico’s banking system has improved enormously over the last decade and banks in Mexico are much more customer-focused now than ever before. A genuine choice of services is beginning to emerge through banks introducing innovate products in an ever-increasingly competitive market.

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. You will need a resident permit (temporary or permanent) in order to open a local bank account in Mexico. Most foreign retirees in Mexico keep a bank account active back home, too, especially if they have have social, family, investment or business connections there.

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.

In years past, all banking in Mexico had to be done at the local branch, which made waiting lines at banks longer. However, Internet banking is now widely available in Mexico, making it possible to bank online, pay bills, and transfer money to others easily and without the need to line up at the bank. 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.

Notwithstanding the advent of internet banking, a lot of Mexicans continue to bank in person, and this means that lines at the local bank (and especially local ATMs)—on pay weeks (“quincenas)*—can be enormous as literally millions of people across the country line up to withdraw cash, cash checks, and pay credit cards and other bills.  Try to avoid banks during quincenas if you can.

You should seek professional financial advice for all matters regarding finance management and taxation if you are considering a retirement in Mexico.

Tax Affairs for Retirees in Mexico

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 is known as “Hacienda” or its full title, Secretaria de Hacienda y Credito Publico; the web site is http://www.gob.mx/hacienda.  The government department responsible for tax collection and administration matters is called SAT – Servicio de Administración Tributaria, http://www.sat.gob.mx/

Mexico’s tax system, like most countries, is involved and complex. 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 reasonable), unless you are good with Spanish and have the inclination to engage with the necessary bureaucratic procedures and paperwork.

by mxretirement