Search Baja California

Cost of Living in Mexico

by Jacqueline Bodnar

Just How Far Will Your Money Take You, Living in Mexico?

A lot farther than it will in the States. Every area in which someone would need to spend money for cost-of-living expenses is far cheaper south of the border than it is in the United States. Because of this, as well as other factors mixed in that make it even more appealing, many Americans are choosing to retire to Mexico. According to the U.S. Department of State, there are somewhere between half a million and a million Americans that now live in Mexico, at least on a part-time basis. Additionally, there are 18,000 U.S. investments in Mexico, helping to make it a more familiar place for many of the expatriates that decide to move there.

Familiarity and Beyond

One of the many reasons that so many Americans are retiring to Mexico is that there is a lot of familiarity with the setting, especially if those individuals are coming from a western state, and there are many Americanized businesses, such as Walmart, that help to make it seem more like home. Additionally, the country has a desirable climate, including warm desert areas and exotic beach communities that provide daily postcard-worthy scenery. These high tourist areas are safe, clean and affordable, leaving one to wonder why anyone wouldn’t want to retire there.

The affordability factor of living in Mexico is one of the most attractive pieces of this appealing package. No matter how much money someone has saved up for their retirement, making the move down to Mexico is going to make that money go a lot farther. For many people, it can quite literally mean the difference between barely getting by and living a relaxed, worry-free lifestyle.

Cost of Living

The old adage is that you can get by, living in Mexico, for about $400 per month. And for many people that holds true. Even for those who have a few more desires that add to expenses, it doesn’t end up going that much over that figure. The bottom line is that living in Mexico versus the United States is going to cut your monthly expenses at least in half. That’s a lot of extra money to save, invest, or use on traveling, shopping, or taking up a new hobby.

In comparing the two countries, it’s a good idea to look at minimum wages to help put things into perspective. The minimum wage in America varies from state to state, and ranges anywhere from $5.15 per hour in Georgia to $8.00 per hour in California. In Mexico, the average daily wage works out to about $4.60. That’s per day, not per hour.

When it comes to how the cost of living expenses will be distributed, there are some key areas to keep in mind as part of this comparison, including such things as medical expenses, taxes, housing and food prices.

A Healthy Analysis

No matter what country you are in, health care and medical expenses top the list of concerns. This is likely one of the most important questions on every retiree’s mind when they consider retiring in Mexico. And well it should be, because it is an extremely important issue. The good news is that, for those Americans who choose to live in Mexico, there is an Instituto Mexicano del Seguro Social (IMSS) program, similar to America’s Medicare program, that costs about $300 per year and can be renewed for the entire time the person is living there. Moreover, additional health insurance can be purchased at very low rates. The overall cost of health care will most likely end up being less than half of what it is in America.

Another important issue is the quality of health care. Many Americans have it in their heads that the quality of care received south of the border is inferior to that received north of it. Yet that doesn’t seem to hold true, according to many who have experienced using it on both sides. This isn’t altogether surprising since many of the doctors in Mexico have been trained in the United States and are bilingual. Of course, this depends on how rural an area you move to, or your proximity to larger metropolitan cities.

A Taxing Question

In America, tax issues are a serious consideration that brings about debate and attempts at reform every couple of years. Americans pay a lot of money in taxes, and it is not simply in the form of income taxes. Not by a long shot. They pay taxes every time they turn around, even though most are not really aware of it. There are taxes on licenses, property, pets, fuel, liquor, toll booths, schools, telephones, cable television and sales tax. Adding up the amount of money each month that actually goes to taxes would make one feel a little queasy. Taxes make their way onto just about every sales receipt, utility bill and service that is used.

Property taxes alone are a big issue and can be an economic burden to any retiree. Even if the person owns their home with no additional payments to make, they could end up paying hundreds of dollars per month in property taxes alone. Depending on where one lives in America, the property tax rate varies, but usually the nicer or more desirable the area is, the higher the tax rate.

In Mexico, owning a home valued at $300,000 will generate a tax rate of about $300 per year. That’s a small fraction of what an American would pay for owning such a home, especially if it were located in California, New York, Florida or any other state that has high property tax rates. The property tax rates in Mexico are far more affordable than those in America.

Housing prices themselves are an important issue in both America and Mexico. Skyrocketing home prices in America over the last few years have sent the average home out of reach for many. Even with falling prices due to the current economic trouble, home prices are still largely inflated in many areas, keeping prices out of reach for buyers. Typically, housing in Mexico will cost about half of what it does in America. Of course, the prices are going to be influenced a lot by where someone chooses to purchase. Homes on or very near the beach or resort areas will cost more, but may still be little more than a fourth of what they would cost in such a setting in California.


Utility costs are another rising concern in America. The prices of heating and cooling a home and using basic electricity have been steadily climbing. In Mexico, the heating and cooling prices typically run about $30-$50 per month, depending on how much the air conditioning is used.

Additional Expenses

Food prices are also a fraction of what they are in America. A couple dining out in Mexico and going “all out” with drinks, an appetizer and choice dishes will rarely top a bill of $25. Other expenses such as alcohol and telephone will vary, but are still considered much cheaper than in America.

One of the biggest expenses that an American could face living in Mexico is trips back home to America. Depending on where they would be going, it could be costly to book travel there. However, living in Mexico is a great reason to convince others to come there to visit them, rather than always being the ones to fly back to America for visits. That way, the costs are not all put onto one person, and visitors get to see the beauty of Mexico. Besides, some of those visitors may also decide to move there, once they travel there and see how nice and affordable it is.


Planning Where to Go

After learning the cost benefits of retiring to Mexico, there is just one more thing that people will need to do: figure out which location they would like to move to. There are many expatriate communities from which to choose from, made up mostly of Americans who are speaking English. There are also resort areas that double as tourist destinations. Beach communities are very popular retirement destinations as well. The climate varies throughout the country, so it depends on individual preferences.


Some of the most popular destinations for Americans to retire include: Mexico City, Los Cabos, Puerto Vallarta, Mazatlan, Guadalajara and San Miguel. If you're from the western States then Rosarito Beach, Ensenada, San Felipe and Puerto Peñasco are the popluar destinations. The first step to take, when planning, is to determine the climate that one desires. Then narrow down which area is of most interest. Only then is it time to start shopping around to see what accommodations you can get for your money.

It is easy to see that the prices of goods in America keep rising. And they’re doing so at a much faster pace than many people can keep up with. When people were planning their retirement years ago, they did not know that the country would fall on such hard economic times, leading to spikes in prices and losses in investments. Because of such factors, retiring in Mexico has been looking more and more appetizing each year for many individuals. How wonderful to have, as our southern neighbor, a country that provides beautiful scenery, affordable living and such a welcoming attitude.

No comments:

Post a Comment