Sharing a border with the United States, it should come as no surprise that Mexico is a popular retirement destination for westerners. In addition to being warmer and cheaper than the US or Canada, Mexico is a nation overflowing with culture.
In this article, I’m going to go over everything you need to know if you’re planning to retire in the United Mexican States.
Table of Contents
Cost of Living in Mexico
Mexico is the cheapest country in all of North America when it comes to cost of living.
A one-bedroom apartment outside the city center will cost you less than $300 per month. However, a three-bedroom apartment in Mexico City can cost around $1,500 per month so it’s clear that rent prices vary wildly across the country.
Living in the capital may be more expensive, but this drone video will show you why it’s probably worth it:
Local food in Mexico will usually cost half as much as it would in the US. That said, I’d highly recommend that you buy from Mexican chain supermarkets like Superama and Soriana instead of the more expensive outlets of Walmart or Sam’s Club.
It’s also worth noting that your grocery bill will be more expensive if you’re shopping in Mexico City or resort towns. In terms of transport, there’s no shortage of busses that can take you anywhere you need to go (but expect some traffic and overcrowding).
If you live in Mexico City then you’ll be able to reap the benefits of its robust metro system that costs around $0.25 per ticket. You can also buy rechargeable metro cards that come out cheaper than paper tickets in the long run.
There are also smaller metros in Monterrey and Guadalajara albeit to a lesser capacity than what you’d find in the capital. Overall, Mexico ticks all the boxes when it comes to cost of living — with its low rent prices, cheap groceries, and affordable public transport.
Taxes in Mexico
Mexico is an admittedly high-tax country compared to cheaper options in Latin America like Paraguay. The country has a progressive tax rate going all the up to 35%. Anyone earning more than MXN510,451 (about $26,000 in USD) will find themselves in the 30% tax bracket.
In contrast, someone earning $26,000 in the United States would only be taxed at 12%. The bar being set so low in Mexico can be a major turnoff for expats who don’t want to fall into the 30% or 35% tax brackets.
Furthermore, Mexico taxes all residents (regardless of nationality and citizenship) on worldwide income. Mexico does have a tax treaty with the United States to avoid double taxation but paying over 30% on worldwide income still feels pretty steep.
How to Become a Permanent Resident in Mexico
Getting a Permanent Residence visa in Mexico is actually quite easy. You only have to meet either of the following criteria:
- Have a bank balance or investment portfolio worth at least $107,000.
- Have proof of income (or pension) of at least $1,620 per month.
After (legally) staying in Mexico for five consecutive years, you’ll become eligible for citizenship by naturalization. In the next section, I’ll go over the travel benefits of having a Mexican passport — one of the strongest passports in the world.
Mexico Passport Visa-Free Countries
Mexican citizens are able to travel to 92 countries visa-free:
The Mexican passport has wide coverage spanning the entirety of Latin America and Europe (except Guyana, Ukraine, and Russia). You’ll also get visa-free access to popular tourist destinations in Asia like Japan, Malaysia, Singapore, and the Philippines.
Safety in Mexico
The US Department of State advises against traveling to the states of Colima, Guerrero, Michoacan, Sinaloa, Tamaulipas, and Zacatecas due to high rates of crime and kidnapping. The only two states with a normal precaution advisory are Yucatan and Campeche.
When looking at the violent crime map on the Global Peace Index, it’s clear that violence in Mexico is almost as bad as that of Central America, Venezuela, and Brazil:
If you’re looking for a safe city to travel to then I’d highly recommend the vibrant Yucatan capital of Mérida. The metropolitan area is home to over a million people and city-center three-bedroom apartments only cost $750 per month if you decide to stay permanently.
Conclusion
Mexico may not be the best option in Latin America when compared to alternatives like Paraguay. However, those who can get past the high taxes and risk of kidnapping will find that becoming a permanent resident (or even citizen) in Mexico is super easy.
It’s really just a matter of proving your income is at least $1,620 per month so you won’t have to worry about any mandatory donations or pricey citizenship by investment programs. Take note that only a tenth of the Mexican population is fluent in English so learning Spanish is a must.
I hope that this guide helped you get all the information you need to make an educated decision on where to retire. If you’re still not sure, have a look at my full guide on the best places to retire in the world!