The Cost of Retiring in Mexico: How Far Your Dollar Goes

Are you thinking about retiring in Mexico?

Finding out how much you need to spend when retiring here is one of the most important factors in determining whether Mexico is right for you. You want to ensure that your budget, pension, or government retirement fund will be sufficient for your needs. 

As a popular retirement destination, millions of expat retirees now live in Mexico. Each of these retirees started at the same point you’re at right now.

Understanding the key differences between your home country and Mexico in terms of cost of living is essential when retiring. Housing, food, healthcare, entertainment, and everyday expenses vary from region to region, city to city, and depend on whether you prefer more conveniences like those in the USA or a laid-back lifestyle.

Many of your questions are discussed and answered in this article, which will help you decide what type of lifestyle you can expect based on your budget when you retire in Mexico.

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Understanding That One Size Does Not Fit All

First, you need to understand that the cost of retiring in Mexico—or anywhere—is NOT A ONE-SIZE-FITS-ALL MODEL. Your lifestyle is different from other retirees. You prioritize items in retirement differently, and only you know what a truly comfortable lifestyle means for you.

A single person retiring in Mexico can live a comfortable life on US$1,500, and a couple on US$2,500. However, this estimate varies from person to person based on your expectations and needs in retirement.

The average Mexican employee earns MXN$8,000 a month, or about US$400. It’s easy to see how they survive and sometimes struggle when you retire in Mexico.

Many Mexican families share the same dwelling with their grandparents, children, grandchildren, and other relatives. They are close-knit and support each other, allowing them to keep their living costs low. 

There are many factors that can significantly affect your cost of living, including:

• Rent or buy a house: Owning, renting, or even building a house can also affect your cost estimates. Dining out or eating at home and entertaining guests by going out to socialize impacts your expenses.
• Activities: The type of recreational activities you engage in, such as movies, performing arts, water sports, or watching live music at a bar, affects your costs.
• Car or public transportation: Whether you own a car or rely on public transportation impacts your retirement budget.

If you feel your lifestyle is simple and not extravagant, calculate your monthly costs based on different lifestyle choices.

Lifestyle Variability

You’ll need to plan for more disposable income if you enjoy the finer things in life. For instance, if you want specific food items in Mexico, such as imported cheeses, premium cuts of meat, and frequent dining out, you’ll need to budget more money.

Other factors affecting your budget include spending time outside of your home socializing with other expats or groups, attending concerts or performing arts, participating in numerous activities, and owning a vehicle.

If you believe your lifestyle is above average or in a popular expat area, you’ll need upwards of US$4,000–6,000 per month for two people.

Major Expenses Breakdown

There are several key aspects of your budget: housing, healthcare, and groceries. All these items play an important role in your budget and planning.

Rent and Housing

The type of housing you choose will impact your budget and expenses. Housing, whether renting or buying, is the biggest part of your budget. In larger cities, most housing options are furnished. In smaller towns or towns with fewer expats, you’ll need to furnish your apartment or house.

Here is a quick table of costs from various popular expat cities and smaller towns:

	Mexico City	Puerto Vallarta	San Miguel de Allende	Lake Chapala	San Andreas Tuxtla	Puebla
Studio	US$500	US$450	US$400	US$350	US$75	US$125
One-bedroom	US$600–750	US$500–800	US$450–600	US$550–650	US$125	US$300
Two-bedroom	US$800–1,000	US$800–1,300	US$900–1,800	US$700–1,600	US$175	US$400–500
Three-bedroom house	US$1,200–2,500	US$2,200–3,500	US$2,500–3,000	US$1,800–2,500	US$200–250	US$500–1,000

*This information was gathered from numerous expat groups on various social media platforms.

Healthcare Costs

You’ll find first-rate healthcare services in Mexico. There are affordable clinics, doctors, and specialists throughout the country. 

You can receive a full blood test at a lab, with same-day results, for US$25–30. A simple visit to a doctor’s office will range from US$15–35, and hospital stays run between US$500–1,000 per day (depending on your medical condition or surgical procedure).

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In addition, you can get your teeth cleaned for US$30–50 and a simple cavity fixed for less than US$50.

You can expect to pay 30–50% less for medical insurance and procedures, including dental and vision, in Mexico.

Private insurance is available in Mexico. Pre-existing health conditions are generally excluded from policies or may result in a higher co-pay rate. There are hundreds of top-notch private hospitals throughout Mexico.

You can expect to pay around US$3,500–5,900 per year for a standard policy (depending on deductible and no pre-existing conditions). Most retired Americans keep their Medicare plans in the USA for emergencies and pay out of pocket for general doctor visits and medications.

You can get quotes on private health insurance here.

Public healthcare in Mexico is administered through the Instituto Mexicano del Seguro Social (IMSS) and is available to all temporary or permanent residents.

There are limitations with IMSS. Pre-existing conditions may not be covered, or you might be placed on a waiting list to treat specific pre-existing conditions.

The average cost varies by age. If you are between 50–59, IMSS presently costs around US$61 per person per month. You can expect to pay US$85 per month if aged 60–69, US$88 per month if you’re 70–79, and US$91 per month if you’re over 80 years old.

Almost all non-pre-existing treatments are provided without a co-pay, including medications.

You can start the IMSS application process here.

When it comes to drugstores, many pharmacies in Mexico offer discounts on medications. For example, Farmacia Similares (a nationwide chain) offers 25% off on medications and prescription drugs every Monday.

Transportation

The costs of owning a car in Mexico can impact your budget. Many larger cities prohibit foreign-plated or out-of-state cars from driving during specific hours of the day (e.g., a vehicle from Nayarit may face restrictions in Mexico City).

Secured parking is also a premium in larger cities.

You’ll need to pay for license plates and registration, which varies by municipality and state. If you’re bringing your vehicle from the U.S., check here for the application process.

Gas will cost you approximately US$1.20 per liter or US$4–5 per gallon.

Public transportation is an excellent way to get around in Mexico. Cab fares are cheap, costing around US$5 for a one-way five-kilometer trip. Most larger cities also offer Uber or Didi as cost-saving options.

Bus and metro lines are abundant, with bus tickets costing less than US$1, even in Mexico City, and metro rides around US$2 for a one-way trip.

Groceries and Dining

Budgeting for food is important. You’ll find that you’ll pay 30–50% less in Mexico for staples like milk, bread, eggs, pork, chicken, pasta, and spices.

Cleaning supplies are also reasonably priced, but you may spend more if you’re accustomed to brands commonly found in the U.S.

A good way to save money is to shop at local markets. Here, you’ll find fruits, vegetables, and meat that have been locally produced. Buying from local markets supports the community and saves you money.

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Seafood is abundant in Mexico and a good source of protein. A kilo of shrimp costs around US$8–10, while a variety of fresh fish ranges from US$5–15 per kilo.

Major supermarket chains in Mexico include Soriana, Chedraui, Mega, and Super Aki. In larger cities, you’ll also find big-box stores like Costco, Walmart, and Sam’s Club, which can help you control costs.

Dining out is inexpensive. Street food vendors offer culinary specialties such as tacos, antojitos, tamales, and roasted corn on the cob. Prices range from US$2–4 for an order of tacos or antojitos, US$1–1.50 for a tamale or roasted corn, and US$3 for a hamburger (without fries).

Dining at restaurants is slightly more expensive but still affordable. Depending on the area, a hamburger with fries might cost US$5–7, while a three-course meal with two drinks at a three-star establishment may cost US$15–25.

Food is typically the second or third most significant expense in your budget. Plan to spend around US$250 per person per month, assuming a mix of cooking at home and dining out once or twice a week.

Visa Requirements

Even though you can comfortably retire in Mexico on a budget of US$1,500–2,500, you must first decide what type of visa is right for you based on your financial situation.

You must start the process of obtaining your Temporary or Permanent Resident Visa from the U.S. at a Mexican Consulate.

For financial requirements, check here for Temporary Residency or check here for Permanent Residency.

When you submit your documentation at a Mexican Consulate, you’ll pay a US$53 processing fee. The fee is non-refundable if your application is declined.

Once approved, there are additional fees that must be paid to the Instituto Nacional de Migración (INM) in Mexico to obtain your official residency card. Here is a list of fees:

Additional Fees for Temporary or Permanent Residency
Issue of Immigration Document (via Canje)	Temporary Residency (1 year): US$300 Permanent Residency (one-time): US$355
Renewal of Immigration Document (Temporary Residency)	2 years: US$438 3 years: US$561 4 years: US$665
Change of Status (Temporary to Permanent Residency)	Application Cost: US$100 Document Issue: US$360

*Prices are based on an exchange rate of USD$1 = MXN$18.

You may choose to hire a facilitator to help you with the application process. A facilitator in the U.S. charges around US$1,100 to assist with documentation for the Mexican Consulate. In Mexico, a facilitator will charge you around US$300–500, depending on your location, to help you obtain your residency card from INM.

Other Expenses

There are plenty of other living expenses to consider when you retire in Mexico. 

Here is a quick table to help you understand these costs:

Cell Phone	US$20/month
Internet	US$15–35/month (depending on location and speed)
Gas (propane)	US$15/month
Water	US$10/month
Electricity	US$15–200/bi-monthly (depending on climate and A/C usage)
Cable TV	US$15/month
Fitness Club	US$25/month
Transportation (Bus, Taxi, Gasoline)	US$70/month

Urban Living vs. Small Towns

Choosing between an urban area or a small town is an important decision. Both offer unique benefits for retirees.

Urban Living

There are advantages to living in an urban area. You have access to modern amenities like libraries, museums, performing arts, box stores, and more healthcare choices, including clinics, pharmacies, and hospitals.

Other amenities like high-speed internet are readily available, and you’ll find easier modes of transportation like buses, metro lines, or Uber instead of taxis.

But these conveniences come at a higher cost and, at times, with more stress.

Small Towns

If you’re worried about your budget, have better health, and have a good understanding of Spanish, then a smaller town might be better for you.

Small towns offer a sense of community, lower costs, and a quieter lifestyle. You’ll be surprised how easy it is to make new friends, especially in a less populated area.

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One drawback in small towns is the lack of high-speed internet or nearby hospitals. You might have to travel an hour to find a hospital and be prepared for everyone to gossip about you.

Here is a quick look at the possible differences in your budget between living in an urban area vs. a small town:

Urban Living/Guadalajara	Small Town/San Andres, Veracruz
US$1,400	US$950

*The example budget is based on one person living a quiet lifestyle in a one-bedroom apartment (excluding health insurance).

The main difference is generally associated with the cost of housing. The more amenities, the higher the cost.

Expat Community vs. Integrating Locally

Living in an expat community or integrating into a local community is an individual choice. There are pros and cons to each option. Below is an example of benefits from living in either situation:

Living Among Expats

Many expat communities around Mexico offer significant benefits to retired people. Your level of speaking or understanding Spanish does not need to be advanced.

You’ll find access to specialty foods and restaurants that cater to the expat community. More than likely, you will find box stores, better support systems like English-speaking medical professionals, and volunteer opportunities with expat groups to help clean beaches, support the Red Cross, or assist with stray animals.

Most expat areas have higher costs for electricity based on usage. Cable television in expat areas can be more expensive with English-speaking channels.

Expat areas may include gated communities or private security services, which are added into the rent.

However, you might find that prices are inflated in expat communities. When living in an expat community, you might feel pressured to “keep up with the Joneses.”

There are affordable expat communities like Cozumel or Puebla.

Living Like a Local

You’ll be surprised how much your cost of living can decrease when you decide to immerse yourself in Mexican culture.

You’ll need a greater ability to speak Spanish, but you’ll find several things easier, like communicating with healthcare professionals, dealing with local merchants, shopping at local markets, and negotiating rent.

While immersing yourself in Mexican culture, you’ll learn about traditions specific to your area, taste local foods, enjoy a quieter lifestyle, and understand the generous nature of the Mexican people.

Comparison Table of Costs
	Expat Area	Local Area
Rent (one-bedroom)	US$500	US$250
Food	US$200/week	US$100/week
Cell Phone	US$20/month	US$20/month
Internet	US$25–35/month (depending on location and internet speed)	US$15–25/month (depending on location and internet speed)
Gas (propane)	US$20/month	US$10/month
Water	US$15/month	Usually included in the rent
Electricity	US$200/bi-monthly (depending on climate and A/C usage)	US$30–50/bi-monthly (limited A/C usage)
Cable TV	US$25/month	US$20/month

Planning for the Unexpected

You should always prepare for the unexpected. A backup plan could be as simple as a credit card with a high credit limit of US$5,000–10,000 for medical emergencies or a rainy-day account like a special savings account, a cashable Certificate of Deposit, or a money market fund.

You may have a home in the USA or family members to help if you face a medical emergency.

Another option is considering a side hustle. These types of jobs don’t take up much of your time and keep your mind occupied.

A side hustle could be anything from graphic design, editing, writing, teaching English, or working occasionally for a former employer.

If you’re spending your 401(k) or Roth IRA, it’s a good idea to stay in close contact with your financial planner. They can help you plan for any type of unexpected incident.

How Much Money Do I Need to Retire in Mexico? 

Mexico is a vast country with diverse cities and states. Urban areas offer expats a plethora of amenities that you may be accustomed to back home. Other areas offer laid-back lifestyles with friendly people and fewer amenities.

Only you know the lifestyle you desire during your retirement years. Here is a quick recap of the lifestyle you can expect for a specific amount of money per month.

Lifestyle Based on a Specific Budget
US$1,500	You’ll experience a comfortable lifestyle in a small town. This includes dining out twice a week. You’ll be stretching your budget if you choose an expat community or tourist area with higher costs.
US$2,000	You’ll experience a comfortable lifestyle in most locations within Mexico, except for cities like Mexico City, San Miguel de Allende, or other areas dominated by expats and tourists, where housing is more expensive.
US$3,000	You’ll experience a pleasant lifestyle with minimal restrictions on your activities, amenities, and housing wherever you choose to live in Mexico.
US$3,500 or Above	You’ll experience an excellent lifestyle in any area you choose, without sacrificing amenities, activities, and housing.

Learning Spanish will help you with your transition to Mexico.

Stay within your budget. There will be times when you splurge on items and times when you cut back. The goal is to balance it out in the end.

Always be aware of your surroundings and enjoy your retirement in Mexico.

Extra Tips to Save Money

When you retire, staying within your budget is important. There is only so much money your pension or retirement fund can afford. 

Here are a few tips to help you manage your finances and keep costs under control:

• Limit your withdrawals from ATMs. Never accept the bank’s conversion rate when withdrawing funds from an ATM.
• Eliminate ATM fees by opening an account at one of several US institutions that don’t charge foreign fees, like Charles Schwab, Fidelity, Capital One, or Ally Bank.
• Stay aware of currency conversion rates. Foreign currencies fluctuate against the US dollar, and Mexico is no different. The Mexican peso has fluctuated 15% in the past year and 20% over the last two years.
• Use a service like Xoom, Remitly, or Wise to transfer money to Mexico. You can easily pick up money at several locations, including banks, without an account.
• Be aware of your surroundings. Don’t put your safety at risk or compromise your health until it’s too late.
• Compare prices at local stores, buy in bulk when possible, and keep your food waste to a minimum.