How to retire to Mexico: A complete guide

Whether you're a Brit, an American or an Australian you might be considering setting up your home overseas, to enjoy expatriate life in retirement. This way you can make your pension go further, explore somewhere new and still attain a really good standard of living.

If you’re thinking of retiring overseas, then Mexico is a very attractive destination. In fact, in 2017 it was rated the best place for expats to retire for the fifth time in a row, by International Living magazine. Based on its cost, climate and culture and other important considerations like access to amenities and healthcare, Mexico comes out consistently on top.

If you’re considering joining the large numbers of expats retiring in Mexico, you’ll need to know a bit about how to go about arranging your move. Here’s a complete guide to how to retire in Mexico as an expatriate.

What’s the money like there?

The official currency in Mexico is the Mexican Peso. You’ll often see prices written as either MEX$, or just $, although the currency code used by exchange offices is MXN. Even though Mexican Pesos is the official currency, you’ll find that many retailers in more touristy destinations are happy to accept US dollars as well. However, the exchange rates applied will never be good, so you’ll need to open a Mexican bank account and get used to using Mexican Pesos when you retire in Mexico.

Exchange rates rise and fall, so it’s worth keeping an eye on the market so you know what your money will be worth in Mexico. You can always get the most up-to-date figures by using anonline currency converter, but at the moment here are some general, rounded figures to give you a basic understanding:

• 1000 GBP (pounds) = 23,580 MXN (MEX$)
• 1000 USD (U.S. dollars) = 18,240 MXN (MEX$)
• 1000 AUD (Australian dollars) = 13,780 MXN (MEX$)

What's the cost of living?

One of Mexico’s attractions is the balance between reasonable prices, and the availability of all you might want to support a relatively luxurious and cosmopolitan lifestyle. In the cities at least you’ll be able to find imported and luxury goods, and spend your time shopping, eating and drinking as you might in any other western city. However, if you choose to cut your costs and live a more ‘local’ lifestyle, you can have a very good life on a limited budget.

The data site, Numbeo, provides average cost of living data which can give valuable insight into the prices of everyday essentials, entertainment and travel in different locations.

*These calculations are from Numbeo, which aggregates cost of living figures entered by locals. They are an average across the country. Therefore, the actual costs will vary by region and city.

It’s definitely a good idea to do your research, and take into account all the costs connected with retiring in Mexico.

One expensive pitfall for many expats is the high fees levied for international money transfers. If you need to regularly move money from a bank account at home to your Mexican bank account, then it’s good to know that your home bank might not be the cheapest option for this service. Often, banks apply high charges for international money transfers you may not be aware of. The fees might not be transparent, but hidden into poor exchange rates. A much better bet is a specialist service like Wise, where you can move your money from one country to the other using the real exchange rate, and with a low fixed fee - leaving you with more money to enjoy your retirement.

How much money do I need to retire in Mexico?

The cost of living in Mexico varies enormously based on the type of lifestyle you lead, and where you choose to live. If you’re hoping to live on a modest retirement income then the good news is that Mexico is relatively cheap for everyday items, housing and entertainment - which is part of its appeal to retirees. Mexico City ranks as 427 out of a listing of 514 world cities, for cost of living, for example.

In fact, as little as $500 a month is enough to get by, if you want to live cheaply in Mexico. This assumes you’ll eat, shop and entertain yourself like a local - and keep away from the expensive import goods. You might want to explore importing goods from the UK yourself, but that won't be cheap either due to significant costs of import duty.

However, if you want to enjoy a luxurious standard of living during retirement, then this is very possible, and quite affordable in many areas of Mexico. Should you wish to retire comfortably to a property complete with a maid service three times a week and a gardener, this could be achieved for a monthly cost of around $2300, according to this calculation by Investopedia.

Rental prices in particular can vary hugely depending on where you’re looking to live. This all adds to your daily living expenses. Of course, you might prefer to buy a property in Mexico, which could bring down your daily expenses significantly.

You can estimate the cost of living in Mexico, based on the city you're interested in and your own lifestyle online.

What’s daily life like?

Mexico is a large country with a varied geography, leading to differences in the temperatures and climate in the regions. The altitude plays a big role in the weather patterns affecting different places in Mexico, with the northwest being desert, and the low lying coastal areas experiencing more tropical weather patterns. There are hurricanes in the coastal cities during the hurricane season which runs June through November.

Because there’s a large expat community in Mexico, you won’t have any problem finding like minded people to spend time with, relaxing and exploring your new home. There are many local expat clubs and interest organisations, which you can find online. One good place to look is theAmerican Benevolent Society which is a charitable organisation tending to the financial and psychological needs of American expats in need - but who also arrange a community calendar of outings and events.

The American Society of Mexico is another active group who arrange events and meetings with a cultural bent, to help foreigners in Mexico learn more about local history, society and culture.

Of course, in the major cities you could easily fill your time quite independently, visiting museums and galleries, or simply enjoying peace in a pleasant climate. One thing to look out for when you’re out and about is the Personas Adultas Mayores programme. If you’re over 60 and a resident of Mexico, this benefit allows you to get hefty discounts from medical services, cultural activities, transport and even store purchases.

What are the best places to retire to?

Mexico is a large and varied country. The capital, Mexico City, has excellent international connections, great amenities, a vibrant cultural life and strong facilities for healthcare and other daily needs. It draws in a lot of expats to live, work and retire for this reason. However, crime can be an issue in some areas, and it’s worth doing your research if this is where you choose to retire in Mexico.

You can compare the crime rates in Mexico City with those in your hometown, online. Naturally, some areas of the city are safer than others, so your best bet is to visit and get the feel of an area before committing. Take local advice and visit at night as well, to make sure that you’re comfortable.

If Mexico city isn't your preferred location, but you want somewhere in an easy driving distance, try Queretaro. This historic colonial town is considered to have low crime rates, meaning that you can retire comfortably, in beautiful surroundings without worrying too much about safety.

If you’re coming to Mexico for life by the coast you might also want to look at Puerto Vallarta. The temperatures here can get oppressive through the height of summer, when some expats choose to travel, but you do get the benefit of truly beautiful weather for most of the year. Here you can enjoy the best of Mexico, with colonial architecture, Pacific ocean views and a modern growing city which has all the amenities you might need to enjoy you retirement.

What are the visa requirements for me?

If you’re a British citizen and want to retire in Mexico you’ll need to apply in person at your local Mexican consulate. You’ll need a Temporary Resident Visa (Residente Temporal), which will be granted to you as a ‘rentista’ (literally, a person of independent means). You can use this visa to enter the country, and then have to switch it for a Temporary Residence Card upon arrival.

You have 30 days to complete the process in Mexico, and your new card will allow you to come and go as often as you like. There are terms attached to this residence permit for retirees, and you’ll need to show you can finance your stay without working. This is done by showing you have had an income of £1245 a month over the last six months, or hold a bank balance of £62115.

The Temporary Resident Visa can not be issued once you’re in Mexico. This means that if you're in Mexico on a visitor visa, and decide to switch to a residence status, you’ll have to leave the country to arrange this.

If you’re anAmerican looking to retire in Mexico you can follow much the same process as if you’re a British citizen. You’ll have to apply at your home consulate, and it’s a good idea to confirm the application process details with the Mexican consulate nearest your home. Consulates might have different rules about making appointments, for example, so checking in advance of a visit is smart.

Australian citizens also need to get a Temporary Resident Visa before travelling to Mexico, at their local consulate. It’s good to know, that if you’re in Mexico as a visitor and decide to change your visa status, although you must leave the country you don’t necessarily have to return to your home country as long as you have all your paperwork on you. So as an Australian, you could still theoretically apply for your new visa at an American consulate for example - much easier than getting back to Australia on short notice.

The opportunity of retirement in Mexico attracts people from all over the globe. Whether you’re looking to spend time in the frenetic buzz of Mexico City, enjoy the culture of one of the colonial era towns or retire to the Mexican coast, you’ll be welcomed by a community of expats who have already made the leap.

Good luck, and enjoy planning your dream retirement in Mexico.