If you’re looking to stretch your retirement dollars, check out Mexico. The lower cost of living in Mexico means your money goes further there. Add in Mexico’s other attractions—including beautiful beaches, a rich and varied culture, and most of the conveniences you enjoy at home—and it can all translate into a higher quality of life. No wonder that Mexico is home to the largest U.S. and Canadian expat community in the world.
Living costs in Mexico vary depending on where you are. In resort cities like Cancún or Puerto Vallarta, for instance, you may pay as much for dinner in a nice restaurant as you would in the U.S. or Canada. On the other hand, expenses that are budget-killers in the U.S., such as medical care and property taxes, tend to be low all over Mexico—even in the big resorts.
Cost of living in Mexico: 30% less than the U.S.
Overall, I’d estimate that cost of living in Mexico runs about 30% less than the U.S., with greater or lesser savings depending on where you live. But here are a few specifics to show you where you can save money—and how to maximize those savings.
For example, living in Mexico can save you a bundle on property taxes and medical care.
Property taxes in Mexico are practically non-existent. A friend of mine pays less than $200 in taxes a year on a three-bedroom, four-bathroom house with pool that is over 5,000 square feet. Another friend pays $100 for a 2,000-square-foot home. These folks don’t live in the country, either; they’re in modern cities with amenities like cinemas, shopping malls, universities and theaters.
Health care in Mexico is also inexpensive—and there are top-notch doctors, dentists and hospitals all over the nation. If you have a residence visa—which is easy to get—you qualify to join Mexico’s national health plan, which has a top rate of about $300 a year per person. It includes medical care and medications. Membership in this plan is phased in over three years, and you may have to wait for appointments, but it’s a great health care safety net.
Prefer private health insurance? You may pay anywhere from $500 to $3,000 a year, depending on your age and any medical conditions you have. But even at the upper price range, it may cost less than you pay now.
If you pay out of pocket, expect to pay $40 to $50 to visit a specialist in Mexico, compared to $200 and up in the U.S. An overnight stay in a first-rate Mexican hospital may cost you $100.
What you save on health care and real estate costs alone can go a long way toward funding your life in Mexico. But there are other savings, too.
Save on basics like food costs
Basic food costs in Mexico are also low. At local markets you can generally fill a shopping bag full of fresh fruits and vegetables for less than $10. Supermarket prices are higher, but you’ll still see oranges for as little as 15 cents a pound in season, or mangoes for 70 cents a pound. Meat, poultry and fish also cost less than in the U.S. For instance, I get fresh fish—whole or filleted—delivered straight to my door from the local fishing dock. I generally pay 100 pesos a kilo—that’s roughly $3.64 a pound. De-boned chicken breasts go for $2.69 a pound at my upscale supermarket, and New York cut steak for $4 a pound.
Eating out is cheap, too. I’ve dined in many Mexican cities for $20 per person. And for lunch—for many Mexicans the largest meal of the day—the comida corrida is a great bargain. This set-lunch special, offered by many Mexican restaurants, can start as low as $3 for two courses and a beverage. In many cities, $5 will get you an excellent, filling lunch.
Of course, not everything in Mexico is inexpensive. Appliances, computers and other electronics have price tags similar to what you’d pay in the U.S. Imported items may often cost you more than you’d pay in the U.S. (Imported food items, from the U.S. and elsewhere, are particularly pricey.)
Electricity in Mexico also tends to be more expensive than in the U.S. Friends who live in a hot coastal area of Mexico say their electricity bill runs $250 to $300 a month—and they only use the air conditioning at night in their bedroom. If you can’t take hot weather, choose one of the many destinations with temperate, spring-like climates, where you don’t need much heating or air conditioning. Lake Chapala and Cuernavaca, both in central Mexico, are two such areas.
You can certainly live the high life in Mexico and spend a fortune if you care to. But if you’re on a budget, Mexico is a great place to live well for less.
3 Tips for Living Well for Less in Mexico
Here are some ways to get your low cost of living even lower in Mexico.
- Live in a temperate part of Mexico where your heating and air conditioning costs are low to nil.
- Sign up for Mexico’s national health insurance plan instead of private insurance.
- Eat like a local: Buy local fresh fruits and vegetables, cut down on meat, and avoid pricey processed and imported goods (except for the occasional treat). Both your health and your wallet will thank you.
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