Attention, seniors: Trump’s budget is coming for your Medicare benefits


By Michelle Singletary | Washington Post

Trump released his 2019 budget last week, and it included $266 billion in cuts to Medicare, which provides health insurance to 58 million Americans 65 and older and people with certain disabilities.

Howard Gleckman, a contributor for Forbes, breaks down the proposed changes: What Trump’s Budget Would Mean For Seniors

— Medicare drug benefit would be restructured to reduce costs for some beneficiaries but raise them for others.

“Trump has proposed eliminating cost-sharing for seniors with very high prescription drug costs, but at the same time he’d increase out-of-pocket expenses for many others, especially those who have significant costs but have not quite reached the threshold where medicine would be free ($8,418 this year).”

— A freeze on most funding under the Older Americans Act, which provides money for social and nutrition services for seniors including Meals on Wheels. While the proposal has a small increase for food programs, it would cut funding for disability programs by about 30 percent, Gleckman reports.

— Gets rid of federal block grants that states use to fund programs for seniors.

— A new six-week family leave program would be created. But it would exclude people caring for frail parents or other relatives with disabilities.

“Each time this proposal surfaces, it focuses only on parents of newborns (and sometimes adoptees) but ignores the needs of families caring for aging parents and other relatives with disabilities,” Gleckman writes. “Families are not just parents and babies. There are millions of adult children — usually daughters — who put their paid jobs at risk by taking time off to help frail parents or disabled siblings.”

— The elimination of the Senior Community Service Employment Program, which provides job training to low-income job seekers ages 55 and older.

It’s more of the same from his first budget introduced last year: In his first budget, Trump to struggling seniors: You’ll be on your own

Nancy Altman, president of Social Security Works, wrote this in response to Trump’s FY19 budget proposal: “Despite Donald Trump’s numerous promises during his presidential campaign to not cut Social Security, Medicare, or Medicaid, he proposes to cut all three in his just-released budget. And not just by a little. He proposes cuts of over $1.8 trillion to the three programs. On top of that, he proposes to slash Meals on Wheels, home heating assistance, and other programs on which seniors rely. It is noteworthy that Republicans just passed, for almost the same price tag, a huge tax giveaway to their donors. So that’s the Republican plan: save money by gutting programs for the elderly and transfer the savings to the billionaire class.”

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What Taxes Do Americans Pay In Mexico


By Christian Reeves | Escape Artist

Whenever we Americans move abroad, buy a rental property, or start an international business, we must deal with both US taxes and taxes in our new country. In this article, I’ll look at what taxes Americans pay in Mexico. This post should apply to most countries out there.

The starting point for this post is the fact that Americans pay US tax on our worldwide income, no matter where it’s earned and no matter where we live. There was hope in the industry that Trump’s tax plan would apply equally to individuals and multinationals. But, that didn’t happy and individuals are still stuck with worldwide taxation on our income. Big corporations only pay US tax on US source profits.

This also means that the best defense we expats have against the IRS is the Foreign Earned Income Exclusion. If you’re out of the US for 330 out of 365 days or a resident of a foreign country, you can exclude just over $100,000 of salary income from your US tax return. Note that the FEIE does not cover capital gains or other passive income.

With that said, let’s take a look at what taxes US persons will pay in Mexico.

Paying taxes in Mexico when you are a foreigner can be more complicated than it seems. In most cases you will require good and well paid advice to avoid paying double and to stay in compliance. Americans have to pay taxes in Mexico when they reside abroad and earn income in Mexico, or when they have a permanent established business in the country.

Americans who are residents of Mexico and receive income in there are considered taxpayers and are taxed in the same way as nationals would be. Consequently, they must comply with the obligations that correspond to the regime for which they receive said income.

Keep in mind that you will get a foreign tax credit in the United States for taxes paid in Mexico. So, you should get a dollar for dollar credit in the US for these taxes. The purpose of the foreign tax credit is to avoid double tax on the same income.

An American who lives in Mexico must understand the concept of tax residence when paying taxes. Nowadays Mexican legislation establishes that a foreign person or a company is a resident when he generates 50.1% of his income in Mexico.

Likewise, a US citizen is a tax resident of Mexico if they spend 183 days a year in the country. This 183 day standard is used throughout the world to determine tax residency.

When an American has a Mexican residence, he is obliged to pay taxes if he obtains income from the following:

  • Salary: money obtained from salaries and other benefits derived from an employment relationship, overtime, additional benefits, compensation, retirement, pensions, retirement insurance, bonuses, among others.
  • Fees: income earned by providing independent professional services, that is, not granted in a subordinate manner.
  • Compensations to members of councils, government administrators, curators and managers: salaries received by members of boards of directors, oversight, consultants, fees to administrators, commissioners and general managers.
  • Leasing of real estate: income for renting real estate as long as that property is located within the national territory.
  • Timeshares or tourist service contracts: for use, enjoyment, occupation or enjoyment of temporarily or definitively of one or more real estate or part of them for tourism, vacation, recreational or sporting purposes.
  • Disposal of shares: When income is obtained from the sale or disposal of shares or other securities.
  • Financial leasing: interests generated from leasing with option to purchase or with the right to participate when the good is sold to a third party.
  • Royalties, technical assistance and advertising: profits obtained through the use of patents, inventions, trade names, copyrights, by transmission of visual images, sounds or both.
  • Exempt interests: discounts for the placement of securities, payments made for the opening of credits, payments to a third party when there is an acceptance of an endorsement, profits from the sale of securities placed among the investing public, the income obtained by a resident abroad for the acquisition of a right or credit of any kind, present or future.
  • Prizes: lotteries, raffles, betting games or contests of any kind.
  • Artistic activities, sports, or public shows: profits or income obtained by residents abroad that carry out sports, artistic or public shows in Mexico.
  • Dividends and profits distributed by legal persons: When residents abroad obtain income from profits distributed by legal entities residing in Mexico.
  • Sale of real estate: when income is received from the sale of some real estate that is within the national territory.
  • Construction, installation, maintenance or assembly in real estate, inspection or supervision: those who provide construction services, installation, maintenance, or assembly in real estate within national territory.

Residents are subject to Mexico’s income tax on their world income, regardless of their nationality. The Federal Tax Code establishes that a foreigner will be considered a resident of Mexico for tax purposes when his domicile has been established in Mexico, unless he has been physically present in a foreign country for more than 183 days, consecutive or not, in a calendar year, and is able to demonstrate residency for tax purposes in that other country.

In order to work within these tax laws, most Americans set up an offshore company. They use one structure to manage investments (usually an LLC) and one to hold their business (usually a corporation). Then they bring into Mexico only the income necessary to operate there.


Also, most Americans look to set up residency in a foreign country that will not tax their income. Because they’ll be spending time in Mexico, they also need a country that doesn’t have a physical presence requirement to maintain the visa.

The best residency program without a significant physical presence requirement is Panama. You can become a legal resident with an investment of $20,000 and won’t be taxed on your income. You should spend a week or two in the country each year to keep up appearances.


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Mexican lakeside haven is affordable expat retirement hub


By Emigrate

If you’re looking for a retirement hub outside the EU, you could start by investigating these two Mexican lakeside cities already popular with US expats.

Chapala and Ajijic are both bordered by Lake Chapala, Mexico’s largest freshwater lake and are just a 45 minute drive to Guadalajara, the country’s second largest conurbation. The two cities’ surroundings are simply beautiful and have attracted an expat community of some 8,000 to date. Spanish is the official language but, for those less than proficient in languages, it’s not absolutely essential.

The expat community in the region is long-established, meaning there are plenty of organised social events and groups encouraging you to make new friends and find new things to do. Naturally, the area attracts retirees due to its affordable cost of living, with eating out costing a maximum of around $30 for two including wine, and the local vendors and regular street markets sell locally-grown fresh vegetables and fruit at great prices. There’s a variety of housing options in the region, with a choice of gated communities, condo blocks and even traditional Mexican homes dating from the colonial era. Rental prices range between around $500 a month for a two-bedroomed condominium to several thousand dollars for a luxury pool villa with views to die for.

Local fundraisers attract a strong expat following, and volunteering is a popular way to spend time helping the local Mexican community. Parades, concerts, plays and other entertainments give regular dates on which to have fun and meet new people, and the weather is great, especially for expats from more northern climes. For those wanting to use their talents to become active in the community, there are groups working with disadvantaged children, dogs and other animals as well as with the disabled. All told, it’s a huge lifestyle change, especially for expats from the UK and continental Europe, but it’s a positive alternative to staying in the home country and wishing you hadn’t!


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The Best Places To Retire Overseas


By Lifestyle Fifty

Have you ever wondered where are the best places to retire overseas? Would you retire overseas? Or would you prefer to stay close to friends and family?

Let’s be frank though, many people are looking for the cheapest places to retire in the world because countries like Australia are considered expensive if you’re on a budget or pension.

I asked some of my friends if they would retire overseas and they came up with some interesting answers.

Some say they would miss their family too much, others say their priorities will change when they retire and they would definitely consider living in another country. Others say they would live abroad for some part of the year, others say they would like to housesit in exotic destinations for short bursts of time.

Mostly everyone I spoke to said they didn’t really see retiring as stopping altogether, but that living within your means should mean enjoying a safisfied and simple, unstressed life. “You don’t need to be a millionaire to achieve that (although it would be nice)” one person said.

Many others are looking for cheaper places to retire and wondering if they can find a better life overseas. Or looking for countries which give them more bang for their retirement buck than say countries like Australia.

In some countries where the quality of life is high but the cost of living is low, retirees on a modest budget can afford indulgences like a housekeeper, a home close to the beach, top-quality healthcare, regular meals out and more.

For those of you who are thinking of spending some of your retirement (or protirement) days living in a country which offers more value for money than your home country, here are some of the best places to retire in the world based on the judgement and experience of in-country expats interviewed for an article on International Living.


Considered amongst the best places to live in South America, Panama is so much more than its modern, cosmopolitan capital city. There are mountain towns boasting cool climates, pine-covered hills, and sweet, Swiss-style cottages framed with bright bursts of bougainvillea. And of course there are beaches galore, from the white sand gems of the Caribbean, to the many popular and easily accessible beaches of the Pacific.


Sell your winter clothes…and get ready for the adventure of a lifetime in the Land of Eternal Spring. Every cliché you’ve heard about living large on little … on even a retiree’s budget … is true in Ecuador, one of the best places to live in South America.

Ecuador lies in the northwestern corner of South America, bordered by Colombia to the north, Peru to the south and east and the Pacific Ocean to the west.

From the Andes Mountains to dense tropical rainforests, and on the west balmy Pacific beaches. In between, you’ll find more climates, cultures and natural wonders than almost any place on earth.

Ecuador also offers special benefits to residents aged 65 and older. Public transportation is half price, airfare (even when flying internationally) is significantly discounted and seniors receive a monthly refund of sales tax paid. Plus you get to go to the front of the line at the bank and grocery store!


Would you retire in Bali? Bali is a place of tradition and symbols…an island of fragrance and flower offerings. You’re surrounded by blooms. You’ll step over them on the street, find them on the beaches, outside houses and piled in the many temples.

Canggu is popular amongst expats because it’s a bit rural and off-the-beaten-track, removed from the main tourist centres.

We love Ubud – the vibe, the art and the surrounding beauty.

Although foreigners aren’t permitted to own land in Bali, many have obtained long-term land leases and built or purchased villas of their own.

According to some expats almost everything costs less in Bali  than it does back home and that Bali is becoming a dental tourism hotspot among Australians.  Some Australian expats live half of the year in Bali and half in Australia.

Here’s a helpful holiday packing list for Bali.


“English-speaking, friendly locals, welcoming expats, low-costs, top-notch cuisine, white-sand beaches, boatloads to see and do… The list goes on…and on…and the good news is Cambodia doesn’t fall short on any of them,” says Steven King who put down roots in Phnom Penh.


Mexico is full of overlooked retirement havens where you can retire in luxury without spending a fortune. The country’s lower cost of living—and of just about everything else—means a comfortable, fulfilling life here will likely cost you a fraction of what you pay back home. From real estate to groceries, entertainment to healthcare, life in Mexico simply costs less.


From the golden beaches to the fabulous food and friendly people, it’s easy to see why Thailand is known as “The Land of Smiles”.

For years, its warm climate, low cost of living and laidback lifestyle have attracted tourists and expats from around the world for both short-term and long-term stays. Some of the world’s most beautiful beaches are located in the south of the country. From the bustling seaside resorts of Koh Samui and Hua Hin  to the more tranquil islands of Phi Phi and Lanta, there is something for everyone who dreams of retirement in the tropics. Some expats prefer to live in the smaller villages that dot the coastlines on both sides of the country, where accommodation costs are much less expensive and life is slower paced.


Bang-for-buck, the quality of life in Malaysia puts it among the best retirement havens in the world and makes it the number one spot in the 2018 International Living Australia Global Retirement Rankings.

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The Real Costs of Living in Mexico


By Janet Blaser | International Living

So many things are so much cheaper in Mexico it’s hard to know where to begin. Even after 12 years living in Mazatlán full-time, I still get surprised.

Case in point: pet care. Dr. Cesar, my vet, makes house calls. Actually, that’s all he does: he’s a mobile vet and shows up at your door with an over-sized tackle box full of injections, pills, and other equipment. I call him from my phone or—much easier and free—I message him via WhatsApp; he’ll come the same day if it’s an emergency or if he’s nearby; otherwise we make an appointment for the following day. The last time he came, he gave both my cats their annual inoculations and the charge was about $10.

Let’s talk about home maintenance. My plumber charges $8 for a house call, and he can usually come by on the same day I contact him. If it’s an easy repair, he does it on the spot and there’s no further cost. If he needs parts, he’ll go on his bicycle, buy them, come back with the receipt, and then I pay him at cost. An electrician, washing machine, or air conditioner repairman is the same: $8 to $10 for a basic house call and simple repair, plus parts if any are needed.

At these prices, it’s hard not to tip them, or just pay them more. But that disrupts the regular local payscale and can make for inflated “gringo prices.” I’ve come to terms in my own way by giving regular service providers a “bonus” at Christmas, which is more in line with the local culture.

What about medical care? Here in Mazatlán, a basic office visit to most doctors, even specialists, is $21 to $23, and appointments are usually available the same day or the same week. You can walk into the emergency room at any of the many private or Red Cross clinics and be seen by a doctor for $13. And it doesn’t have to be for a real emergency—if you need a prescription for flu symptoms, relief from “Montezuma’s revenge,” or think you sprained your ankle, they’ll gladly assist.

There are also big reputable laboratory chains that offer imaging, vision tests and glasses, all kinds of blood tests, and more at unbelievable prices—in spotless, professional, well-run centers with the newest equipment and highly trained personnel. For example, at Salud Digna—which has more than 50 locations throughout Mexico—I can make an appointment by phone or online for the next day or just walk in and wait in line. A “Woman’s Package” includes a mammogram with ultrasound, Pap smear, and bone density scan for less than $20. A “Complete Adult Package” checks 26 things, including cholesterols, a general urine exam, glucose, proteins, and triglycerides for the same price. You pick up the results the next day and then meet with your regular doctor to go over them.

Recently, fed up with my Dollar Store reading glasses, I went to Ver De Verdad, a popular eyeglass chain. An on-the-spot exam and a pair of stylish Prada-copy polycarbonate frames: $46.

I like to ride my bike around town, especially along the beachfront boardwalk. However, it gets dirty and the humidity makes for a lot of rust. Do I want to clean it? No. What to do? Enter Roberto, a bicycle repairman I found through a local bike rental shop. He came to my house, cleaned the entire bike, sanded, sealed and painted the rusty rims, replaced the brakes, oiled and lubricated the gears, etc., all for about $10. I have a car, too, and when it needs to be washed, I take it to Javier, for a $4 cleaning, inside and out, that’s better than I’d do myself.

Last year I moved from one side of town to the other, and I’m embarrassed to say it took five full-to-overflowing loads of a specially rigged pick-up truck to do so. That included appliances (refrigerator, stove, washer, two air conditioners), two couches, 15 big plants, patio furniture, two-bedroom sets, assorted living room pieces, and umpteen boxes of assorted “stuff.” The team of six movers carried everything up three flights of stairs (or winched things up over the balcony), placed all the items in the correct rooms, and even switched rooms for a few things. This was all done in an afternoon after the crew had come and assessed exactly what I had to move. The cost? About $265.

These are real costs from where I live in Mazatlán, and they’re a big part of the reason so many of us are deciding to move to Mexico. Although prices may vary in other parts of the country, you can rest assured your overhead here is going to be much less than in the U.S. or Canada.

That makes it really easy to live a less stressful, less complicated, and generally happier life. And isn’t that what we’re really looking for?

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How To Retire In Mexico As An American


By Christian Reeves  |  Escape Artist

More and more Americans are retiring abroad to enjoy better weather, new experiences and relaxed lifestyles, as well as access to affordable health care and a lower cost of living. Mexico is the most popular destination because it offers all of this and it’s also close enough to home. In fact, about 10 times more Americans retire to Mexico than any other country.

Apart from the proximity of Mexico to the United States, there are a number of reasons to consider Mexico as a place to retire. For example, American retirees have established communities in cities across Mexico that offer affordable real estate in incredible locations. Some of the best are  Cabo San Lucas, Lago de Chapala, San Cristobal de las Casas (my favorite), Playa del Carmen, Tulum, Puerto Vallarta, San Miguel de Allende (which I think is the most beautiful), Tijuana-Rosarito (best for business and proximity to California), and Ensenada.

If you are going to retire in Mexico you will need to know about real estate in Mexico. You can see Mexico real estate information for some of the markets above below:

  • Playa del Carmen real estate
  • San Migel de Allende real estate
  • Cabo San Lucas real estate

It is possible to retire with $800 a month in Mexico if you’re willing to live modestly in a small apartment, eat simple meals at home, and give up some amenities. Alternatively, you can easily spend $10,000  a month being in a large exclusive beach community and taking full advantage of the countless fine dining and leisure opportunities. Most American retirees live on $1,500 to $3,500 a month in Mexico.

Some of the most popular places that Americans are choosing to retire are cities that share a border with the United States like Tijuana, Rosarito, and Ensenada. Tijuana is quickly becoming a favorite spot for Retirees because if its proximity to the US, its food, and growing technological and manufacturing industry. Trump might wipe out the manufacturing sector, but FinTech is coming on strong.

The problem with Tijuana is that it’s very large and the demand for American quality real estate is high. Be prepared to spend $2,500 a month for a quality 2 bedroom apartment. Better values are available in Playas de Tijuana, a coastal town 30 minutes from downtown.

Rosarito’s beaches are filled with American pensioners due to its relatively low cost coastal homes. You can buy a house with a beachside view for $83,000 dollars. Ensenada is growing more and more thanks to the popularity of its wine valley, Valle de Guadalupe which offers everything Americans go to Napa Valley for only much cheaper.

Other cities with more traditional architecture located in the heart of Mexico are retirement hot spots. For example, San Miguel de Allende and Puerto Vallarta are largely populated by American retirees. In the cost of living, San Miguel de Allende in Guanajuato are standouts for being a bargain for retirees who will spend on average between $1,200 and $1,600 a month.

Puerto Vallarta is a bit more expensive than San Miguel de Allende with a higher cost of living of $1,600 to $2,000 dollars a month. Puerto Vallarta is a Mexican beach resort city situated on the Pacific Ocean’s Bahía de Banderas near Guadalajara. It’s basically in the middle of Mexico.

In order to retire and start living in any of the aforementioned cities in Mexico it is widely advised to apply for a Retirement Visa. Getting a visa in Mexico, unlike the United States, is a short and almost always uncomplicated process. Here are the steps you must take in order to apply for a Retirement Visa:

Submit a letter from the bank or financial institution that checks investments or bank accounts with an average monthly balance equivalent to $99,350 USD during the last 12 months and the accounts corresponding to that time period. The bank’s letter must contain your full name, date of opening of the account, the balance for the last 12 months and must be signed by a bank official and the original document must be submitted.


Have a monthly income pension fee greater than $2,500 USD during the last 6 months. The Social Security letter indicating your pension and the account statements of the last six months where that amount is reflected can be presented.

You will also be required to present the following documents:

Passport or identity document and valid and current travel visa, in original and copy. With a minimum validity of 6 months. Confirm that your passport has enough blank pages to stamp the visa.

A photograph with visible face and without glasses, color, passport size, measurements should be at least 32.0 millimeters x 26 millimeters and a maximum of 39.0 millimeters x 31.0 millimeters, with white background and front.

If you’re not a US citizen, you must show proof of legal stay in the United States through an original and a copy of the US visa you have, the stamp of entry to the United States of the ESTA, approved work permit or permanent residence. A US visa generally allows you to avoid applying for a visa to enter Mexico.

After you obtain the Retirement Visa you can apply for Permanent Resident Visa after 4 years. The steps that an American retiree needs to take in order to become a legal resident of Mexico are simple.

If you’re older than 50 years of age and provide proof that you can maintain and take care of your family and each one of your dependents you qualify for permanent residency. You will also have to prove that you are still retired, a letter from the US Social Security Office will do just fine. Almost all of this process can be completed at a Mexican Consulate in the United States.

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8 Reasons to Pursue Early Retirement

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By Craig Stephens | U.S. News

Most people retire during their 60s. To retire earlier than that requires planning, discipline and paying close attention to your savings and investments. But the sacrifices and extra effort are worth the trouble. Early retirement planning makes you rethink what brings you happiness and life satisfaction outside of your career and improves your financial footing. Here are eight reasons to pursue early retirement:

Address the future today. Many Americans are unprepared for retirement and may need to continue working during their 60s and beyond. A primary reason for being unprepared is a lack of planning and saving in their younger years. By setting a goal to retire early, you begin to analyze your finances and design and implement a plan to get there. The sooner you begin planning and making serious efforts to secure your retirement future, the greater your chances of achieving it. Analyzing your current financial situation and creating a plan is good at any stage of your life, but preparing for retirement gets more difficult the longer you wait to start saving.

Increase income. Once you decide on an early retirement goal, you’ll quickly realize there’s a good chance you won’t be able to do it without spending sacrifices or extra income. Sacrifices are hard to adjust to, so many people prefer to accelerate their retirement savings. Planning for early retirement motivates workers to excel at their current job to receive promotions and raises. Some savers also seek out ways to earn money beyond their primary source of income. Extra income ideas can include a second job, side business or real estate investing.

Circumstances may require you to retire early. Not everybody retires in their desired fashion. At some point, you may not be able to work. However, when you prepare your life and finances to be able to retire early, you’ll also be better off in the case that you are forced to retire early. For example, during the recession in 2008, some older workers retired due to job loss and difficulty finding work in a pool of younger workers. Health ailments can also sideline a career, especially for workers in professions that require physical activity. Pursuing early retirement can reduce the hardship if your working years are cut short for reasons outside of your control.

Improve your relationships. Early retirees have more opportunities to spend time with people they care about. By achieving early retirement status, social activities can become priorities in your life instead of a slice of your calendar. Your spouse and family will also benefit from the added time you have to enjoy each other’s company. That’s not to say you can’t have strong relationships while you work full-time, but early retirement gives you more time to dedicate to family members. Another benefit is the ability to be available to friends and family who need help. Freedom from work requirements allows you to serve others in need, which is far more gratifying than writing status reports.

Travel. Vacations from work are rarely long enough. Travel is best when it’s unrestricted by time. Early retirement allows for extended travel, which is difficult to schedule when you’re employed full-time. It also helps to prevent age from being a limiting factor in your travel decisions. Plan a month or two in an intriguing city, volunteer in a recent disaster region or travel by land through multiple countries. When your time allotments are less restricted, the opportunities to explore are more abundant. Extended visits will make you appreciate each destination more thoroughly than a quick tour stop.

Prioritize your health. Commuting, work travel and firm time commitments are consequences of a full-time career. When you’re working full-time, exercise tends to be secondary to the rest of your daily responsibilities. Sitting most of the day in a chair is inherently unhealthy, while the constant temptation of office treats is a detriment to healthy eating decisions. Good health is perhaps our most important asset. When you retire early, you can prioritize your health while you’re still relatively young, allowing you to improve your overall well-being and potentially extend your longevity.

Lower consumption and spending. One of the most effective strategies for retiring early is lowering your annual cost of living. A lower cost of living requires a smaller retirement nest egg, enabling you to stop full-time work earlier. A secondary benefit of reducing your costs is becoming more conscious of your consumption and spending decisions. Smarter consumption habits are better for your pocketbook and reduce your global footprint.

Failure isn’t a bad outcome. Even if you fail to reach an accelerated early retirement goal, you’ll be better off than if you didn’t attempt to pursue it at all. Setting an early retirement goal will motivate you to spend more intentionally, earn more, invest more, consume less and pay closer attention to your finances. These are all good habits whether you can leave the workforce early or not.

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