If you live or work in Mexico, Taking up dual citizenship might make your life easier. Here’s everything you need to know to get dual citizenship with Mexico.
Mexico has been welcoming retirees from the US, Canada and further for decades. An estimated one million citizens from the US alone call Mexico their home for some or all of the year. This leads to a thriving and cosmopolitan expat community, ready to welcome retirees from all across the globe.
Those who’ve already made the leap report that retiring in Mexico is enjoyable, welcoming and easy to navigate. If you’re considering a move, then working out how far your money will go will be a first priority. Here’s a quick overview to the cost of retiring in Mexico.
Naturally the cost of your retirement - wherever in the world you are - depends somewhat on your chosen lifestyle. Mexico is relatively cheap for everyday items, housing and entertainment - which is part of its appeal to retirees.
The good news is that a high standard of living is quite affordable in many areas of Mexico. Should you wish to retire to a comfortable property complete with maid service three times a week as well as a personal gardener, according to a calculation by Investopedia this could be achieved for a monthly cost of around $2300.
So while you can survive in Mexico for more like $500 a month, if you have a higher disposable income it will certainly go further here than elsewhere in Western Europe or North America. The key to getting the most from your money is knowing where the locals shop and go for fun. Remember, living like you’re on an extended holiday is a great way to go broke, so learning a few local hangouts and tips should help your budget!
If you’re over 60 and have a residence visa in Mexico, you’ll probably want to take advantage of the Personas Adultas Mayores benefits programme. The programme will offer you hefty discounts on anything from medical services, cultural activities, transport to even store purchases. Go to the nearest Instituto Nacional de las Personas Adultas Mayores office and request your membership card.
If you’re seriously considering retiring abroad, it’s important to know how much money you’ll need for day-to-day essentials.
When you’re researching, don’t forget that the cash you have available is impacted by fluctuations in the exchange rate. If you draw your pension or other income in a different currency, then keeping track of the mid-market rate is a good idea so that you know that you’re getting the best possible rates on your currency exchange. Use an online currency converter to know what the range of fair exchange rates looks like. Most importantly, be wary of hidden fees and charges.
Although your cost of living will vary based on your personal circumstances and preferences, this example cost of living calculation comes in at under $2000 per month for a retired couple.
| --- | --- |
| | Average price in Mexico (USD)* |
| Housing (2 bedroom rental) | $900 |
| Utilities (including Internet) | $200 |
| Groceries | $400 |
| Eating out and entertainment | $250 |
| Healthcare (2 people) | $112 |
| Total monthly cost | $1862 |
*Details from Investopedia as of December 2016
For more detail on daily costs, try a data site like Numbeo. The site provides average cost of living data which can give valuable insight into the prices of everyday essentials, entertainment and travel in different locations. Prices quoted there are an average across Mexico, and therefore the actual costs will vary by region and city.
To retire in Mexico you’ll need a residence visa which you can apply for on the basis of retirement as long as you have sufficient income or assets to support yourself. There are two options when applying for a visa - a temporary visa is issued for people who expect to be in Mexico for more than 6 months but less than 4 years; or a permanent visa for those who wish to settle there permanently. If you’ve previously applied for temporary residence you can apply for permanent residence afterwards, subject to further conditions.
If you wish to apply for a temporary residence visa, one important requirement is that you have sufficient income for your stay. At present, this is calculated as a monthly income of $1,553 (with six months of bank statements to prove it), or an annual average bank balance of $25,880. For a permanent residence permit, the financial demands are higher - monthly net income of $2,588, or an annual average of $103,523 in the bank. The equivalent amounts you’ll be required to prove for your permit will vary depending on what the current exchange rate is.
You should apply for your visa at your local consulate. Be aware that different consulates ask for different documentation, so make sure you check out the details online before submitting your application.
Health care in Mexico can be one of the larger expenses you’ll need to plan into your budget. As Mexico has no reciprocal agreements with other countries, you’ll have to pay for your healthcare even if you’re entitled to free treatment at home. A small number of private care policies sold in North America might offer some coverage for Mexico with a few extra fees, but it’s not the norm.
The provision for healthcare in Mexico is good - many hospitals are on par with those available in North America and Western Europe. Health insurance is one thing most expat retirees value - and in Mexico this can be bought from a number of local and international providers, as well as many local banks.
Whether or not you need to pay tax on your income in Mexico depends on your tax residency status and the country where your income is paid. Many countries have reciprocal tax agreements with Mexico so you may be able to choose which country you wish to be taxed. If that’s the case, then you may only have to pay tax once on any income or pension you draw.
Your first stop should be to talk to the tax authorities in your home country who can provide you with general advice. The Mexican tax authorities host information on local taxation online - but, naturally, this information is offered in Spanish. If you’re not confident with the language (and especially the ‘small print’ technical aspects), then it’s best to seek professional assistance. Even if you’re happy to immerse yourself in the technicalities of the tax system, paying for a professional could be a good choice in order to expedite the process and help ensure that you keep up-to-date with any changes to the requirements over time.
Retirement in Mexico has been a hot choice for many people - especially from North America - for decades. With the country’s relaxed pace, hospitable climate and affordability, this trend will certainly continue. If you’re thinking of Mexico as a new home, you’ll find a wealth of advice and information online to help you plan your move. Dig around, do your research, and get ready to enjoy your new lifestyle!
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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