Mexico is hands-down the easiest retire-overseas option for North Americans.
In numbers, it also holds up as the most popular escape.
Of the (at least) 6.3 million U.S. expats overseas, 1 million are estimated to live within Mexican borders—while an estimated 300,000 Canadians live there at least part-time.
It’s easy to understand Mexico’s appeal…
Apart from its ease of access from North America… its tropical climate (no extreme weather conditions here)… its diverse living options (from colonial cities to lake regions, all sandwiched between miles of Pacific and Caribbean coast), Mexico—more so than any of our other top havens—is familiar.
One of the first things you’ll notice is how well it keeps the pace of its northerly neighbors. In Puerto Vallarta on the Pacific coast, for instance, you’ll see carbon copies of the stores you’re familiar with back home—Walmart, Starbucks, Costco—stocked with the same brands you’re used to buying every day.
But if you’d like to make a clean break from the American way, you have plenty of opportunity, too. My point here is that, in Mexico, you’re not in for quite the same force of culture shock you’d be faced with landing in other parts of Central and Latin America.
Adding to this smooth transition is Mexico’s standard of infrastructure. Thanks to a drive from President Enrique Peña Nieto, improvements continue across energy, land development, transport, communication, health, and tourism industries. You’ll likely notice little difference with your internet connection south of the border.
As for investment, the Mexican government, through its FONATUR tourism development agency, has a sound track record developing little stretches of this country’s coast. All interested investors have to do is to pay attention to where FONATUR is moving next to cash in. (We’ll talk about this path of progress on the ground in November.)
And, with the currency exchange in your favor right now, it’s the perfect time to be tapping into all the opportunities Mexico affords.
Traditionally, most expats in Mexico have settled around places like Ajijic and Lake Chapala—shooting up prices on property and day-to-day living costs but there are other lesser-known options for living and investing.
The colonial town of San Miguel de Allende, a favorite with foreigners since the 1960s (though not completely overrun with Americans) where a couple could retire for around US$1,300 a month.
The romantic resort town of Puerto Vallarta, which offers top-notch shopping, fine dining, a wealth of activities, convenient communications with the United States, plenty of English speakers for socializing, and a beautiful location on the Pacific. The cost of living for a couple in Puerto Vallarta comes to as little as US$1,386 per month.
The Riviera Maya, an area that boasts over 125 miles of Caribbean beaches, the second largest reef in the world, well-preserved Mayan sites, some world-class golf courses, and a climate that is warm and tropical year-round. Two hours south of Cancún, the town of Tulum is one of Mexico’s finest gems where a couple could live really well from US$1,319 a month (or US$890 if you cut down your entertainment budget and settle for a more modest rental).
If you’d like to experience Mexico for yourself—while it remains an open-door opportunity—then this is the year to do it.
If you’re hoping to stretch your retirement dollars further, a move abroad may be the answer. Living in a foreign land offers a chance to see more of the world and can offer a lower cost of living.
But which are the best countries for retirees? International Living’s Annual Global Retirement Index highlights the best countries for retirees each year, and 2019’s top 10 list features eight Spanish-speaking countries—seven of them in Central and South America, and Spain itself. If you’re planning a foreign retirement, it may make sense to put learning Spanish on your to-do list.
KEY TAKEAWAYS
International Living’s Annual Global Retirement Index highlights the best countries for retirees each year.
The publication uses a scoring system that measures a variety of factors including cost of renting, cost of living, healthy living, and climate.
Panama, Costa Rica, Mexico, Ecuador, and Malaysia are 2019’s top five countries for retirees.
Before going abroad, check visa and residency requirements, research political stability, determine foreign ownership rules, and visit before moving.
Best Retiree Countries in 2019
To determine which countries are the best for retirees, International Living uses a scoring system that measures a variety of factors, including:
Ease of buying and owning property and the value of property investments
Cost of renting
Benefits and discounts on things such as healthcare and entertainment
Visa and residency requirements
Cost of living
Fitting in and how easy it is to make friends
Entertainment and amenities
Healthy living
Development and infrastructure
Climate
Stability of the country’s political situation
The top 10 countries with the highest cumulative average score across all those categories are:
1. Panama
Between majestic mountains and bustling beaches, Panama offers the best of both worlds for retirees. Locals have a reputation for being welcoming and friendly, and from a cost-of-living perspective, it’s highly affordable. Virtually everything is less expensive compared to the U.S. including groceries, restaurants, and rent, which are approximately 46% lower. Expats who get a retirement visa enjoy numerous benefits, including deep discounts on entertainment, airfare, local transportation, and hotel stays, as well as a one-time duty-tax exemption for household goods up to a total of $10,000 and a 100% duty exemption on the purchase or importation of a vehicle every two years.
2. Costa Rica
Costa Rica is an ideal choice if you value a healthy, active lifestyle. It earned the highest scores in the healthcare, amenities, and healthy living categories, and there’s no shortage of things to see and do. The cost of living makes Costa Rica highly affordable, even on the smallest retirement budget. Consumer prices are 24% lower than the U.S. on average, with rent prices averaging 54% lower. If you’d prefer to buy, you can find homes as low as $50,000, with property tax rates that are a fraction of what you’d pay in the U.S.
3. Mexico
Mexico combines modern amenities with a rustic feel, and it’s well suited to retirees who prefer a balmy climate and close proximity to the U.S. It earned its highest ratings on International Living’s list for both entertainment and amenities and the ease of establishing residency. Retirees can get a temporary resident visa, which is good for up to four years, by meeting minimum monthly income or asset requirements or by owning property in Mexico. If you plan to stay long term, you can apply for a permanent resident visa, which has higher income and asset requirements. Note that five states in Mexico have been singled out for U.S. State Department travel warnings, so be careful where in Mexico you choose to relocate.
4. Ecuador
Ecuador has something for everyone, whether you prefer the beach, the mountains, the countryside, or the city. It earned its highest score for its climate, which boasts an average annual temperature of 67 degrees. Housing is a bargain, with rental prices notching 70% lower compared to the U.S. Overall, consumer prices, excluding rent, are around 40% lower, allowing you to squeeze more value out of your retirement dollars. Like Panama, Ecuador extends a long list of money-saving benefits to expats, including discounts on your electric and water bills, discounts on entertainment and public transportation, and reductions of certain taxes.
5. Malaysia
Malaysia is one of three countries included in the top 10 that’s not in South or Central America. Aside from the beautiful landscape, expats are attracted to this Asian locale because of the low cost of living and abundance of amenities. Consumer prices, including rent, are nearly 50% lower than in the U.S., with a one-bedroom apartment renting for less than $400 a month. There are hundreds of islands to visit, and the low cost and wide variety of restaurants make it a foodie’s paradise.
The top 10 list of the best countries to retire to features eight Spanish-speaking countries, seven of which are located in Central and South America, and also includes such exotic locales as Thailand and Malaysia.
Countries Rounding Out the Top 10
The remaining countries in the top 10 all offer a combination of low costs, great amenities, and good weather. All but two are Spanish speaking, and two require a European move. In descending order, they are Colombia, Portugal, Peru, Thailand, and Spain.
More Popular Places to Retire
In addition to International Living’s list, there are lots of sources advising retirees where they should go if they decide to relocate abroad. But where are retirees actually flocking, based on where they collect their Social Security checks? The answers just might surprise you. Here, in order of popularity, are the five countries that are seeing the biggest influx of Social Security recipients who prefer retirement on foreign shores:
Canada
Japan
Mexico
Germany
United Kingdom
We’ve already discussed Mexico’s advantages. As for the others, while living in capitals like Tokyo or London can be quite pricey, housing and other fundamental aspects of the cost-of-living in smaller towns and in the countryside are often lower than in the U.S., especially when you factor in the universal healthcare many of these countries offer. Familiarity also explains the popularity of some countries; large numbers of U.S. military personnel are stationed in several of these lands, and many often have a desire to “stay on” after their active service has ended.
How to Plan Your Retirement Abroad
1. Check Visa and Residency Requirements
Immigration and residency laws vary from country to country. You can review the Department of State’s country-specific information to find out if you’ll need a visa to enter and reside in the country to which you’re hoping to move. Other useful information is listed on the website as well, including passport validity, recommended and required vaccinations, and currency restrictions for entry and exit.
2. Research Safety and Political Stability
The U.S. State Department website provides up-to-date information about how safe and stable various countries are. At times, there will be travel warnings and alerts about specific locations, or, rarely, the U.S. may restrict citizens from traveling to or within certain countries. The information is updated regularly, as needed.
As a foreign national, you may encounter travel restrictions in certain countries. Remember that while in a foreign country, you are subject to its laws.
3. Determine Rules of Foreign Ownership
Many countries have rules and regulations as to who is permitted to own property, and how the property can be used—some countries restrict foreign ownership altogether. Before you decide on moving to a country, investigate its restrictions in detail and make sure they work with your finances and plans. Your best information source is a local real estate agent. You can find such agents through the International Consortium of Real Estate Associations (ICREA).
Even if a country does not restrict who buys real estate, it may control what happens when non-citizens sell the property. Foreigners are permitted to buy property in Malaysia, for example, but if the property is sold, the proceeds have to be kept in a Malaysian bank account.
Also, be sure that your property rights are protected. In the U.S., homebuyers generally receive a clear title to the property when they buy it. Rules may be less clear in other countries. Be sure you hire a qualified real estate agent and a local attorney to ensure that you know what you’ve purchased and that all paperwork is handled according to local requirements.
4. Visit Before Moving, Rent Before Buying
Living in a country is very different from being a tourist. Try to stay in neighborhoods and areas you are considering to see what it’s like to live like a local. And visit in more than one season. In fact, try to visit once during the least-pleasant weather season of your prospective home—dry desert winds, monsoon rains, dreary winter days when there’s no sun for weeks. You won’t always be able to escape once you’re actually living there. Also, see whether there is a local American or international association or club you can join to learn more about living in that country or region.
Once you move, start the transition by renting first to make sure the locale is compatible with your vision for retirement. If it works out, let the house-hunting begin.
5. Consider an All-Cash Purchase
Locating a U.S.-based bank or another lender that will fund a mortgage for overseas property is exceedingly difficult. Some local banks abroad do make loans to foreigners, but you could be asked for a massive down payment.
Try to find a property you can afford to buy outright, for cash. You’ll have more negotiating power, a less complicated transaction and, in many cases, you may end up with a better deal.
6. Organize Your Assets (and Taxes)
You may be retiring abroad, but your assets don’t have to move with you. Stocks, bonds, annuities, IRAs and the like can remain in the U.S. where the economy and political situation are known factors.
Unless you renounce your U.S. citizenship, thereby giving up Social Security, you will be subject to the same income tax requirements as if you lived back home. You will still have to file an income tax return with the IRS and will have to declare any money withdrawn from your retirement accounts. Be sure to consult with a tax attorney or tax advisor before you move, and plan on keeping in touch while abroad to make sure you are in compliance with tax laws at home and abroad. If you decide to move your assets abroad, work with your accountant or attorney to find out if and how they will be taxed.
To cover day-to-day expenses, you can open a local bank account to accept regular transfers from your U.S. account and pay bills.
Online banking and brokerage accounts make it easier than ever to manage money while abroad, but be aware there are restrictions on transfers to certain countries. If your Social Security check is mailed abroad, keep in mind that the local bank may hold the check for up to four weeks before it’s cleared.
Major credit cards—Visa, MasterCard, and American Express—are accepted in locations around the world and provide another option for covering daily living expenses and purchases. Contact your credit card company about an auto-pay option.
7. Settle Your Healthcare
Most U.S. health insurance policies will not cover you while living abroad. And even though Social Security will follow you as you travel, Medicare coverage does not extend outside of the U.S. Depending on your retirement destination, you may find that healthcare is so affordable that you don’t need insurance. If the country offers subsidized care for citizens, for example, make sure foreign residents have access to the same care and costs. If not, find out what coverage you will have as a visitor and plan accordingly. Depending on where you plan to live, you may find American or international companies that sell health insurance to Americans living abroad.
In some countries, healthcare may be affordable but not up to the standards you are used to. If that’s the case, your plan could include adding a certain amount of dollars to your annual budget for health-related travel and care, either back to the U.S. or to a larger city abroad than where you’re living.
If you are currently under the care of a physician at home, ask if he or she can recommend a colleague in your new destination. Having this connection can make it much easier to deal with existing medical conditions and ensure you receive the appropriate care.
8. Get an International Driver’s License
Depending on where you go, your new country may not recognize your U.S. driver’s license. Many countries will accept an International Driver’s Permit (IDP) issued by the American Automobile Association or the National Automobile Club. These permits, which usually have to be accompanied by a regular driver’s license, typically expire in a year. If you plan on driving abroad, you need to get a local driver’s license as soon as you can.
9. Think About Working During Retirement
For some, retirement doesn’t mean not working. Many retirees enjoy volunteer opportunities and part-time jobs. Others are more entrepreneurial, interested in starting a business abroad.
If you plan on working, check ahead of time to make sure the country has no restrictions that could prevent you from either finding a job or starting your own business.
10. Plan to Stay Connected
Many people, whether or not they’re retired, find the most difficult part of living abroad is missing friends and family. Have a plan in place to keep in touch with the people you care about. Modern technology like smartphones and online video-conferencing software, such as Skype, make it easy to stay in touch virtually, but having a strong, reliable connection is crucial. Having a connection where you live is preferable, but if that’s not an option, nowadays you can access the internet in most public libraries and cafés.
You also need an emergency plan: Leave your contact information and a copy of your passport with family, and carry contact information for your family back home with you when you travel. Also, know how to reach the closest U.S. embassy or consulate and give that information to your friends and family.
Citizen vs. Resident
Almost any country you would want to live in welcomes American retirees, as long as they can prove that they have a certain minimum income from some combination of Social Security, a pension, and investment income. It varies, and, reasonably enough, countries with a higher cost of living require a higher income.
Generally, there’s a three-stage process, from tourist to resident to citizen, though the wait time and red tape differ in every country. The U.S. State Department keeps track of the specifics regarding short-term visits. The website of each nation’s U.S. consulate is the best source for facts on residency and citizenship requirements.
Here’s how it works for most countries:
An American with just a passport typically can stay in a foreign country for up to 90 days. Some expats residing in Canada or Mexico stay on for years, taking a bus across the border and back again every three months to restart the clock.
Long-term stays generally require a residency visa, which may need to be renewed yearly for several years before permanent residency can be applied for and awarded.
A citizenship application, in most countries, requires a longer period of residency, varying from as little as two years to as long as 10 years. Some have fast-track programs that cut the wait for people who make a substantial investment in the country.
All of the above is relatively straightforward in most countries for retirees, assuming they don’t want to take a job and can prove they have a steady income. “Relatively” meaning that some countries make it tougher than others, with onerous requirements and plenty of paperwork.
And that raises the question of whether you want to be a permanent resident or a citizen of your adopted country. The benefits and drawbacks vary for each country. Note that citizenship in any European country gains you certain rights as a citizen of a European Union member nation.
The more common choice for a retiree expat is between permanent residency and dual citizenship. Remember that neither dual citizenship nor residency gets you out of filing a U.S. tax return every year. It is both unusual and burdensome, but Americans have to pay income taxes wherever they live, and they owe it no matter where their income was earned. You may also have to file an income tax return in your country of residence, although most deduct the amount American residents pay to the U.S.
In case you’re wondering, you can relinquish your U.S. citizenship, and with it, your U.S. tax bill, but that step is irrevocable and uncommon. In 2017, 5,133 people did so. This number is slightly lower than the all-time record of 5,411 the previous year. According to Forbes.com, some were very wealthy Americans who found they could no longer hide assets in foreign bank accounts. Since a new U.S. law requires those deposits to be reported to the IRS, the banks either do so or flatly refuse to do business with Americans. For the rest, the sheer aggravation of filing in two countries every year was a likely factor in the renunciation of their U.S. citizenship..
As an expat in Mexico, the taxes you’ll pay will depend, in part, on your situation. If you own property in Mexico, you’ll pay property taxes. If you rent out that property or own a business, have a job, or have interest-bearing bank accounts, you’ll owe income tax. Even if you have none of these, you’ll still pay sales tax (known as Value Added Tax or VAT) on most retail goods and services.
If you will be doing business in Mexico or even if you will be employed by a Mexican company, it’s a good idea to meet with an international tax specialist, in your home country, before you move. He or she can advise you how to best minimize your tax obligations, especially if you have significant assets in both Mexico and your home country.
Income Tax in Mexico
You will owe income tax in Mexico if you hold a job, run a business, rent out a property you own, or hold an interest-bearing bank account or security in Mexico. In most of these cases, you will need to file a Mexican tax return.
If you are a U.S. citizen, note that the United States taxes citizens and permanent residents on their worldwide income. Canada taxes citizens on worldwide income unless they have officially moved their legal residence outside Canada. If you earn any income in Mexico it must be declared on your U.S. or Canadian tax return. You will get credit on your home-country return, however, for taxes you have already paid in Mexico.
Income tax in Mexico varies greatly. Like the U.S., your tax rate will depend on the amount of your earnings, deductions, and other factors. Mexico’s individual income tax rates range from 1.92% to 35%. Non-residents (those in Mexico on a work visa/permit) pay 15% to 30%. Mexico’s corporate tax rate is a flat 30%.
Mexican Real Estate Taxes
There are three types of tax that you’ll have for residential property over the years that you own it:
A 2% acquisition tax when you buy the property
Annual property taxes (known as predial)
Capital gains tax when you sell the property.
Many communities in Mexico commonly use a property’s “assessed” value as the basis for these taxes, and the official assessment can be much lower than the property’s market value—in some cases, as low as 30% or 40% of the actual sales price. So on a $100,000 home that has an official “assessed” value of $40,000, you’ll pay $800 in acquisition tax. Under Mexican law, using an assessed value less than the actual commercial value for tax purposes is technically illegal. But we don’t know anyone who doesn’t do it.
Property taxes (predial) in Mexico are very low. It is quite common to have annual property taxes of $100 or less, and they seldom run higher than about $300.
If you sell the property, you’ll owe capital gains tax. Capital gains tax can be figured two ways in Mexico:
You can pay 25% of the declared value of the transaction, or
You can pay 30% of the net value—the difference between the assessed values at the time you bought the property and when you sell it, taking into consideration how long the property was held, any improvements made, any commissions paid, and other allowable expenses. (If there is a significant difference between the assessed value recorded for the property when you bought it and the value you claim when you sell it, you could be in for a big tax bite.) You should calculate your capital gains tax both ways with the help of an accountant or notario and pay the lower one.
Value-Added Tax
In Mexico, a Value-Added Tax is applied to the sale of most retail goods and services. This tax is 16% in most of the country and 11% in border areas. You will see this VAT added onto the bottom of sales receipts just as would see sales tax added, north of the border.
Sobre el Turismo Médico las diferentes fuentes de información que existen tienen visiones dispares. Sin embargo, en lo que todas coinciden es que se trata de un segmento que ya acumula un gran valor de mercado, que está en constante crecimiento y que su potencial todavía es enorme.
Otro síntoma de su importancia es que, a diferencia de otros rubros de la industria turística, en los que se realizan estudios para conocer su valor muy de vez en cuando, algunos cada diez años, en el caso del Turismo Médico en los últimos años diversas empresas han efectuado investigaciones al respecto, muy probablemente para ayudar a los inversionistas en su toma de decisiones a la hora de elegir dónde arriesgar su dinero.
El más reciente lo presentó ayer la consultora Deloitte en la Ciudad de México, que no se limitó solamente a analizar el Turismo Médico, sino que también incluyó al Turismo Wellness y al Turismo de Retiro, englobando a los tres en un espectro más amplio denominado Turismo de Salud.
Y, para sacar sus conclusiones en este documento titulado: “Oportunidades de Mercado y Perspectivas del Turismo de Salud en México”, analizó y promedió la información que han proporcionado otras fuentes de investigación, dejando ver que existe muy poca uniformidad en las diferentes fuentes de información no sólo en nuestro país, sino a nivel mundial.
El estudio es largo y detallado, por lo que hoy nos enfocaremos al Turismo de Salud.
De principio, para entender el esfuerzo realizado por Deloitte, la propia empresa inicia con la siguiente nota metodológica: “La mayoría de los gobiernos no cuentan con procesos de recolección de estadísticas claras sobre el Turismo Médico, y los hospitales tampoco han publicado sus cifras verificadas sobre el tema. En este sentido, las estadísticas sobre el tamaño de la industria muestran variaciones importantes según la definición y los criterios de medición que utilice cada fuente”.
Añade que contrastaron sus estimaciones con las principales cifras macroeconómicas de México, así como la Cuenta Satélite de Turismo. Asimismo, consultaron las principales publicaciones y estudios de fuentes públicas y privadas que existen sobre la industria, encontrando diferencias importantes en metodología de medición y cobertura entre ellas.
Además, entrevistaron a los académicos que estudian el turismo y sus cifras, así como al personal clave que llevó a cabo las estimaciones para las firmas internacionales de las que obtuvieron información, y a funcionarios del sector público responsables de elaborar las estadísticas nacionales relativas a la medición del turismo y los motivos de viaje.
Finalmente, efectuaron dos sesiones de trabajo colaborativo con los principales actores e interesados del Turismo Médico en México, de quienes obtuvieron información relevante y de primera mano con respecto a la estructura y operación actual de la industria en el país.
De esta manera, para determinar el tamaño de este mercado a nivel mundial, se encontraron con que para Azoth Analytics el valor global es de 157 mil 600 millones de dólares, cifra a 2018; para Medical Tourism Association, de 100 mil millones (2018); Patients Beyond Borders, 100 mil millones, dato a 2017; Allied Market, 82 mil 900 millones (2017-2018); Transparency Market Research, 60 mil 800 millones (2018); y para Euromonitor es de 38 mil 600 millones (2018).
En cuanto al valor de esta industria en México, las consideraciones fueron, con los mismos años ya señalados para cada una de las empresas mencionadas: Azoth Analytics, 28 mil 200 millones de dólares anuales; Allied Market, 14 mil 400 millones de dólares; Euromonitor, 3 mil 500 millones de dólares; y para la Cuenta Satélite de Turismo del Inegi, 49 mil 506 millones de pesos, dato a 2017. De las otras compañías no está disponible la información.
Del 2018 al 2023 calculan una tasa media de crecimiento anual en México de 12.27 por ciento para Azoth Analytics; en tanto que para Allied Market será de 14.5 por ciento; Euromonitor, 10.7 por ciento; e INEGI, 2.6 por ciento.
Con base en esta información, Deloitte concluye que en nuestro país el valor del Turismo Médico va de los 8 mil a los 8 mil 800 millones de dólares, de los cuales el turismo doméstico aporta entre 3 mil 900 y 4 mil 300 millones, en tanto que los extranjeros colaboran con entre 4 mil 100 y 4 mil 500 millones de dólares.
Así, tenemos que el valor de la industria del Turismo Médico en México representa alrededor del 5.6 por ciento del total a nivel mundial.
Ante estos números, no queda duda que este segmento puede ayudar mucho a la nueva visión del gobierno de enfocarse más en la captación de divisas que en la cantidad de turistas que nos visiten.
Expats are drawn to lakeside living because of its natural beauty and temperate climate—unlike the heat and humidity you sometime find in coastal areas. It can be a great option for anyone looking to avoid a busy beach lifestyle and heavy tourism. With lakeside living, you get the water and all the fun and beauty that comes with it, but without the downsides.
Here are five good-value, fresh-water destinations where retirees can enjoy lakeside living—complete with great views, fishing, and boating—for a fraction of what a comparable lifestyle would cost in the States.
Mention Italy’s Lake District and most people will think of the northern glacial lakes—Lake Maggiore, Lake Garda, and of course Lake Como. While their glitzy reputation as a playground for the rich and famous draws lots of visitors, Lake Bracciano is a lesser-known, laidback alternative.
Lake Bracciano is just an hour from Rome but is a tranquil world away. The only motors allowed are those of the ferries that connect the three lakeside towns. All other boats, including the fishermen’s boats, have to paddle. This ensures not only a peaceful ambiance but a safer environment for kayakers and stand-up paddle boarders who don’t have to contend with jet skis or motor boats.
Three towns grace the shore of Lake Bracciano. On the south side of the lake are Bracciano and Anguillara Sabazia, while on the north side is teensy Trevignano Romano.
Bracciano, with its imposing 15th-century castle, sits above the lake and has a bustling feel. Anguillara Sabazia is a stunning sight as it sits out on a promontory. Anguillara Sabazia is a stunning sight as it sits out on a promontory. And Anguillara is big enough to provide all the daily services and amusements while retaining a small-town feel and appeal with a sense of community.
Lake Bracciano doesn’t just boast proximity to Rome. It’s also less than an hour from the Mediterranean Sea, and is at the gateway to Tuscia, the ancient Etruscan land where timeless places like Sutria, Vetralla, and Viterbo (and many more) offer endless exploration opportunities.
For less than what it costs to buy a studio apartment in Rome, you can buy a townhouse with garden, garage, and roof terrace near Lake Bracciano. It has two bedrooms, a studio, and one bathroom set out on two floors, in a quiet country-like setting. Price: $221,884.
Lake Chapala is Mexico’s largest lake, and the surrounding area is also home to one of the largest concentrations of North American expats in the world. Located in west-central Mexico, about an hour south of Guadalajara, the Lake Chapala region sustains approximately 20,000 expats, most from the U.S. and Canada, and the vast majority are retired. That number roughly doubles during the cold Canadian winter months, when thousands more migrate to the area for about six months each year.
Two quaint towns, Chapala and Ajijic, support most of the expat population, with Ajijic holding the edge when it comes to numbers. Both communities are nestled along the lake’s shoreline and separated by only a few miles.
The enormous appeal of this area is easy to understand. In addition to the overall affordability, the area also boasts the second-best climate on the planet; daily temperatures are almost always 75 F to 78 F, under a bright blue sky and sunshine. Rain, when it happens, is usually at night. The areas’ elevation, at about 5,000 feet above sea level, assists with the stability of the climate.
Retiring is not the end of the line, but the beginning of a new adventure.
There are ample restaurants as well as modern theaters, garden clubs, Spanish classes, art exhibits, book clubs, dancing classes, chess clubs, and practically any kind of activity desired. Medical care is handled by local clinics and the cost is reasonable. For serious issues, and for serious shopping, you can head to the city of Guadalajara.
“My husband, Walter, and I recently relocated to Ajijic to escape Chicago winters,” says Miriam Ditchek. “Since living here, I have found that retiring is not the end of the line, but the beginning of a new adventure.
“I have become both a teacher and a student. Between taking art classes, Spanish language classes, and teaching English, I am busier now than when I was working a nine-to-five job. The difference being that I love what I am doing. Painting has become my passion along with teaching English as a second language to Mexican adults who want to advance in their chosen careers.
“The Lake Chapala Society is primarily a meeting place for expats. There is an annual registration fee of $38. For seniors over 79, the fee is discounted $30. We attend lectures, discussion groups, movies, exercise classes, and take advantage of health screening. There are also art and chess classes for children. My husband enjoys the bridge group that meets twice per week.
“There are many restaurants that cater to all tastes and are inexpensive by U.S. standards. My favorites are Cocinart, La Sima del Copal, and Tango. La Sima del Copal sits at the top of a mountain peak and offers the most beautiful view of the lake at sunset. Dinner for two, including a glass of wine and tip, will cost approximately $25. For those on a limited budget, there are less expensive restaurants that are also very good.”
About three hours northwest of Costa Rica’s capital, San José is the 33-square-mile Lake Arenal.
Although this is Costa Rica’s showpiece lake, there isn’t much boat traffic and rarely any noisy jet skis, but plenty of windsurfers and kite boarders. For those seeking a more leisurely pace, kayaking is popular too.
Year-round temperatures are moderate, although there is a healthy rainy season in Costa Rica from May to November which brings out an array of green in the trees and foliage.
Construction within 50 meters of the lakeshore is prohibited. (This is because Lake Arenal is a man-made lake created to generate hydroelectric power. Costa Rica generates close to 100% of its electricity from renewable resources.) There are no large resorts, only a few small marinas, and no big condo or hotel towers to spoil the views. It’s mostly rural; a farming community—as it has been for decades.
One drawback is the lack of major medical services, but there are clinics and doctors’ offices for basic needs. For specialist care, locals and expats travel two hours west to Liberia, the closest city, where there is also an international airport.
The main hub of activity on the lake is the small village of Nuevo Arenal; many expats also live a quick drive into town on the water on either side.
“The road from Nuevo Arenal to La Fortuna is one of the best two-lane roads in Costa Rica,” says Stephen Day. “Our house is located down this road. It’s only eight minutes from the center of town, up a steep, paved driveway, and it brings you to a vista that will take your breath away the first time you see it. From it, my wife, Christine, and I have a view of Lake Arenal, from the whirling wind turbines of Tronadora to the north, all the way south to the majestic Arenal Volcano. The lot is well worth the $60,000 we paid for it in December 2016.
“As a 71-year-old, retired from careers in education and real estate, I have always worked within a strict budget. It’s no different here. We have no expenses for heat or air conditioning, because the temperature is always between 65 F and 85 F. The electricity we use runs about $50 a month. I pay $75 a month for internet and another $50 a month for TV and cable. Our cellphones cost us $140 a month, because we do make quite a few international calls. The house is paid for, and so is the one car we share. My car insurance, for very good coverage, costs me about $75 a month. All told, I estimate that we spend another $1,200 a month for all our food, restaurants, and propane for cooking, and gasoline.”
Known as the Lake of Seven Colors, Lake Bacalar, a 26-mile-long, mile-wide body of freshwater on Mexico’s Yucatán Peninsula, mimics the Caribbean Sea in its turquoise color and crystal clarity. It offers visitors an unusual, tranquil, wave-free experience in a freshwater lake.
In the early 1700s pirates attempted to take Bacalar from the Spanish in a bloody battle. The town’s fort, Fuerte de San Felipe, built of stone in the shape of a four-pointed star and ringed by a now-dry moat, was built shortly after the pirate attack. Now it houses a museum with plaques in both English and Spanish. A public beach club, Balneario Ejidal, provides walk-in access to the lake (for about 50 cents), along with a restaurant, palapa-covered picnic tables, a craft market, and a water slide.
The main attraction here is the lake’s natural beauty. But for medical care, shopping (including Costco), government services, and other conveniences, the city of Chetumal is only 40 minutes’ drive south. The border with Belize is not too far beyond that, making weekend trips possible. There’s even a water taxi that runs from Chetumal to Ambergis Caye in Belize.
And the area’s beautiful Caribbean beaches are also close by.
As in the rest of Mexico, a couple can live quite well on about $2,000 a month, including housing, medical care, and all other expenses. To live in a place with natural beauty found nowhere else and the laidback lifestyle, it’s a bargain. You can fill up a bag bursting with fruits and veggies for less than $10. And there are other goodies on offer.
“When I visited Bacalar, we didn’t feel like cooking. So, we went to one of the many grill restaurants in town. Two pounds of grilled skirt steak, with tortillas, hot sauce, rice, and beans, cost us about $8,” says ILs Roving Latin America Editor, Jason Holland
With its wild beauty and seemingly endless, wide-open spaces, Chile’s Lake District seems like the last perfect place at the far end of the world. However, it offers one of the most First World lifestyles in Latin America.
The Lake District is one of Chile’s most popular vacation areas, with cool, freshwater lakes for summertime vacations and, in some parts, wintertime skiing, as well. In spite of the country’s reputation for seismic activity, the Lake District long had a smattering of mostly European expats. Now those from the U.S. and Canada are putting down roots in this region, too.
“When we tied the knot all those years ago, my husband, Jim, and I never dreamed that we would be celebrating our 28th anniversary under the stars of the Southern Hemisphere,” says Lori Dorchak.
“But when the financial crisis of 2007-2008 destroyed our real estate brokerage, development, and appraisal firm, we felt that we were living in front of a computer screen, working harder and harder to make less and less. What’s more, all we had to show for it was chronic heartburn, a perpetual headache, and empty pockets.
“Disillusioned with the American Dream, we decided to close our business and retire to paradise. We were having a midlife crisis together. But our dream of paradise did not include palm trees and relaxing on the beach. We were only in our early 50s and felt we still had lots of living to do, besides building that homestead we’d always dreamed about and raising the children still left at home.”
The couple decided to settle in Puerto Octay, a town on the north shore of Llanquihue Lake in Los Lagos Region in the south of Chile. Lake Llanquihue is a vast, blue expanse with the snow-capped peaks of two volcanoes, Osorno and Calbuco, clearly visible on its far side. There are several villages scattered along the shores of Lake Llanquihue, all of them surrounded by forest.
“We chose here because of the spectacular scenery, year-round mild climate, and because it is just a bit off the beaten track.
“We came from South Carolina, which has a pretty low cost of living. In comparison, some things in Chile can be more expensive, like technology and imported items. On the other hand, many everyday expenses are significantly cheaper here, like rent, utilities, and locally grown food (in my opinion, these are the important things). Out in the country, we have found rents on modest family homes to be as low as $200 a month, while in the cities, a larger three-bedroom furnished apartment can run from $500 to $800.
“Our experience with the Chilean healthcare system has also been very positive. For minor illnesses like the flu, we just go to our local hospital. Before we signed up for the national insurance plan, which costs around $25 a month for our family, we were charged just $15 to see the doctor. Medicines usually cost us less than $5. If we want better quality or service, we can always go to the private hospital for a slightly higher co-pay. The quality of care here is comparable to the U.S., with more of a focus on prevention.
“The freedom we experience living in the countryside of southern Chile is marvelous.”
Janet Blaser knows a thing or two about reinvention.
Once a food and restaurant writer in Santa Cruz, Calif., the now-63-year-old struggled to find work roughly a decade ago as journalism increasingly moved online. She lost one beloved job, got her hours cut at another, and ended up working odd jobs, including one in human resources at an amusement park.
With little savings and a low salary, the single mother of three struggled — even as she watched friends buy million-dollar homes and pricey cars. “I constantly felt like I wasn’t ‘enough’ and didn’t have ‘enough,’ ” she writes in her new book, “Why We Left,” which profiles 27 expats in Mexico.
A trip to Mazatlán, Mexico — a colorful resort town on the Pacific coast — changed the course of her life. “I fell in love, I felt this heart connection somehow — there were beautiful old buildings, cobblestone streets, plazas with wrought iron and the beautiful glittering Pacific Ocean, warm and swimmable,” she tells MarketWatch. “It just felt deeply healing, friendly and welcoming.” Plus, she saw the interesting cultural, outdoors and foodie offerings of the town and its abundance of English-speaking expats and tourists, and realized that there was almost no information in English about Mazatlán’s many goings-on. It sparked an idea: that she could use her journalism experience to create an English-language magazine about Mazatlán and its cultural happenings.
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Panoramic view of the Mazatlán shoreline.
And so, though the surfing enthusiast initially considered moving to New Orleans, off to Mazatlán she went, by herself, in 2006 — her Toyota Echo packed to the gills. The trip took about four days, and it wasn’t absent self-doubt: She called each of her three children, who by that time were adults, sobbing, wondering if she was making a huge mistake. But she knew that staying in Santa Cruz would leave her scrambling for every dollar, unsure of her future, and she was ready for a new life — and a new journalistic endeavor. (Plus, she jokes, “I wanted warmer weather and a warmer [expanse of] ocean that I could swim and play in.”)
She spent the first year in Mazatlán living on what she was paid for part-time editing work she did online and some savings (Janet lives on about $1,000 a month), while she explored how to start that local arts-and-entertainment magazine. M! Magazine launched in 2007 — filled with restaurant reviews, profiles, and advice on what to do and see — and Janet owned it for nine years.
Fast-forward more than a decade — during which time Janet also started a local organic farmers market — and, though Janet misses her kids and now three grandkids in the U.S., she reports she “can’t imagine living in the U.S. again” — in part because, she says, “I couldn’t afford to live in the States again” and that “the more easygoing Mexican lifestyle agrees” with her.
“It’s a very different vibe here that’s kind of hard to explain. It’s not about being retired, because I wasn’t that until a year ago. It’s just a different understanding of what’s important in life, and a more relaxed, live-and-let-live attitude. If something doesn’t get done today — there’s always tomorrow, or the next day. What’s the big deal?” she explains. Here’s what her life in Mazatlán is like, including the costs, residency issues, health care and more.
Matt Mawson
Janet Blaser framed by lush surroundings.
Costs: Janet says she lives on about $1,000 a month, with her biggest regular expenses being rent ($210 a month, including water and electricity, for a one-bedroom apartment), gas for her car ($100 to $150 a month) and food (groceries cost her about $250 a month). While produce is cheap, specialty items like fancy cheese or high-end pasta are a bit more than they might be in the U.S., she says. She likes going out to breakfast sometimes and pays about $6, including tip, for that; a fancy dinner might cost $18 or so, she says. She also pays about $22 a month for Wi-Fi for her apartment, and $18 for phone (she uses WhatsApp a lot, which is how we talked), and adds that entertainment is very cheap in the area. You can go to a movie for under $5, for example. She even has a vet who makes house calls ($15) and a bike-repair person who does the same ($10, plus parts).
One bigger, albeit irregular, expense is travel, as flying to the U.S. is pricey, she says. One hack: You can fly out of Culiacán, which is about 220 kilometers north of Mazatlán, to Tijuana and then walk across the border, she says.
Health care: Janet says she spends roughly $1,500 a year on health insurance through an international health-insurance company. Her deductible is $1,000, and she rarely meets that because routine health care in Mexico is inexpensive. She says she’ll spend about $30 on a doctor’s visit and can get appointments the same week and sometimes even the same day; a recent trip to get two dental crowns cost her $135 each. So far, she says she’s had a good experience with the health care in Mexico and highlights the two privately run hospitals in town as a perk.
Language hurdles: Though Janet had studied Spanish while living in the U.S., and “thought I knew what I was doing — that I’ve got this,” she quickly realized upon moving to Mexico that she wasn’t quite as close to fluent as she thought (and even today isn’t perfect). “I can carry on a conversation and make a phone call and order food to go and give directions, but I will never be completely fluent,” she says. The difference between now and then, though, is that “I’m not afraid to try. Even if I sound like a caveman, I’m not afraid — it’s a constantly humbling position,” she says, adding with a laugh that sometimes she still sounds like “a toddler.”
Janet Blaser
Sunset in town
Residency: Janet says the process to secure permanent residency status was relatively easy for her more than a decade ago but notes that is has changed and is more complicated now, though still doable.
Cons of living in Mexico: Janet fully admits that life in Mexico has some significant downsides. “There are issues in this country,” she writes in her new book. These include “extreme poverty in some parts,” she tells MarketWatch. On a more day-to-day front, Janet laments being unable to find the underwear and organic body products that she likes, and that she finds some store-bought products like kitchen utensils, towels and sheets to be of low quality.
Bottom line: “For all the challenges, I can’t imagine living in the U.S. anymore,” despite the pull of her grandkids and “the deep comfort of being around my adult children,” Janet writes in her book. “When I visit, it doesn’t feel like home anymore; I am indeed a visitor.” And, she tells MarketWatch, “I’m able to actually live a more simple life and be satisfied in a way I could never before in the U.S.”
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 a popular destination because it offers all this – plus it’s close enough to home that travel back and forth to the States to visit friends and family (and for them to visit you) is relatively easy and reasonably priced.
A primary consideration when deciding on a retirement location is what it’s going to cost. Here, we take a quick look at how much money you might need to retire comfortably in Mexico.
Lifestyle Matters
No matter where you retire – at home or abroad – how you retire greatly affects the amount of money you’ll need. It’s possible to retire in Mexico on a fraction of what one would need in the United States if you are willing to live modestly in a small apartment, eat simple meals at home, and forgo some of the comforts and conveniences you may be used to back home. Alternatively, you could easily spend $10,000-plus a month living large in an exclusive beachside community and taking full advantage of the myriad fine dining, entertainment, and travel opportunities.
Most people who retire abroad won’t fall into either extreme, seeking a comfortable lifestyle that still keeps them on a reasonable budget. To achieve this in Mexico, a retired couple might be looking at the following monthly costs. Note that this level of budget in Mexico permits renting a house with three-times-a-week maid service and a weekly gardener (rough estimates):
Housing (a two-bedroom house rental)
$900
Utilities (electric, gas, water, local phone, cable TV and internet)
$150
Household help (maid service 3X/week; gardener 1X/week)
$215
Groceries
$350
Dining out and entertainment
$250
Health care (both people on Mexican IMSS insurance, plus extra expenses)
So for roughly $2,155 a month, or about $25,860 per year, a couple could retire comfortably in Mexico. And depending on the exchange rate between the peso and the U.S. dollar, Americans might be able to stretch their retirement budget even further. The average monthly benefit for a retired couple is $2,340, according to 2018 data from the Social Security Administration. That adds up to $28,080 each year – just enough to cover this budget.
Of course, retirement costs vary from person to person, and your costs could be lower or significantly higher than these estimates depending on your situation, lifestyle choices, and any unforeseen expenses. And, keep in mind that these estimates don’t include expenses such as traveling to/from your retirement destination, moving your household, emergencies, and taxes.
Ways to Save
One way to save is through Mexico’s retirement benefits program. If you are 60 or older and have a Mexico resident visa, you are eligible for Mexico’s Instituto Nacional para las Personas Adultas Mayores (INAPAM) benefits program. This program provides discounts of 10%-50% on a variety of services, including health care (dental work, doctor visits, hospitals, lab work, medical devices, and pharmacies); cultural activities such as archeological sites, museums and the theater; transportation (including airfare, bus fare, car rentals and car purchases); and hotels.
Another important way to control costs is to find out where the locals shop and go there. Get to know the local vendors and farmers, and learn where you can buy things at the “local” rate instead of the “tourist” rate. Remember, you’re not on vacation. It might be OK to splurge while on a short vacation, but if you live like that every day, it’s easy to burn through your entire retirement budget.
The Bottom Line
Retiring in Mexico might be a good choice for those looking to enjoy new experiences and cultures, access to affordable health care, a change of scenery, and a lower cost of living. Since life outside the United States can be very different from what you may be accustomed to, it’s helpful to have an adventurous spirit and open mind to fully enjoy and appreciate the experience.
Be aware that some regions of Mexico are safer than others. It’s especially important in Mexico to research regions you’re considering before you move, use common sense, and avoid (or use extra caution) in areas with active travel alerts and warnings.
Visa and residency requirements, plus taxes (both in Mexico and U.S. tax regulations for citizens living abroad) can be complicated. It makes sense to work with a qualified attorney and/or tax specialist when making plans to retire outside the United States.
By Rebecca Lake|Investopedia
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Matt Mawson
Janet Blaser
