I don’t know about you, but sometimes the Canadian winters bring me down. The cold and snow make me dream about living in a warmer place, maybe close to the beach.
Many Canadians and Americans agree with me. A recent survey found that over 54% of respondents are very likely to move to Mexico, especially as a retirement destination. That figure is up over 5% from previous years.
But before jetting off and enjoying a pina colada, there are factors to consider and steps to take when making such a life-altering decision.
Here are the three steps on how to retire in Mexico from Canada:
- Consider the cost of living.
- Decide where to live.
- Figure out your visa requirements.
If you’re dreaming of warmer days, stunning architecture, and great food, consider Mexico the perfect place to retire. Before leaving for your new home, here’s what you’ll need to make your move stress-free.
- Documents. Without a doubt, you’ll need to have plenty of paperwork handy before and after you move. Whether you’re dealing with visa applications, rental properties, or moving companies, the paperwork could be overwhelming if you lack organizational skills. I suggest coming up with a system that’s easy for you to manage and stick to. That could be as easy as a file folder or as high-tech as scanning each document and saving it on your computer and phone.
- Real estate agent. Whether you’re renting or buying, a knowledgeable real estate agent that’s familiar with your new area will make everything easier. They know where the local ex-pats live and understand their needs. In addition, they know the properties available that are within your budget and can negotiate a good deal. Plus, if you’re looking to move permanently and are selling or renting your existing home in Canada, a real estate agent can help you with that while you tend to your extensive to-do list.
In addition, if you’re planning on living in Mexico only part-time, a qualified real estate agent can put you in touch with a good management company that can oversee your property when you’re gone.
- Time to research. Even though you’re probably thrilled to retire and start your new life, give yourself time to research potential areas and the pros and cons of each. This includes housing, nightlife, safety, existing ex-pat communities, and more. Rushing into a move could mean disaster and wasted money down the road if you don’t fully know what you’re getting into.
Source: Live and Invest Overseas
No matter where you’re moving, one of the first things on your mind should be if you can afford it. How much per month do I need for housing, food, and entertainment?
Luckily, retiring to Mexico means you’ll pay significantly less than living in Canada. How much less will depend on the area – more luxurious communities closer to the beach will cost more but are still affordable.
According to International Living, Canadian retirees can expect to spend around $2,500 per month on housing, transportation, and even housekeeping services. That’s much less than the typical Canadian is used to.
Other amenities like groceries, clothing and entertainment are all much cheaper. Overall, Mexico’s cost of living is 52% lower than Canada’s. With all your extra savings, you could sock it away, pay to have family and friends visit, or travel the world.
Source: Skerry Harry
Mexico is a large country with cities, small towns, beaches, and mountains. Deciding where to make your home should be at the top of your list.
Here are the factors to consider.
When you think of retiring in Mexico, thoughts of warm weather and relaxing on a sandy beach probably pop into your mind. However, there are other locations throughout the country just as popular with retirees as the beach.
The central mountain region of Mexico probably has the most temperate weather, with temps topping out in the mid-20s. While you’ll find sunny weather for a good part of the year, there is a rainy season, typically from June to October. During this time, the humidity will rise, and you’ll face an afternoon storm most days.
But many retirees want to live by the beach. Those areas are hot and humid, with sea breezes helping to make things a bit more bearable.
These coastal areas are hot and dry from November to April, making it the best time to stay or visit. May to October is the rainy season. It’s still hot and humid, with rainstorms occurring almost daily.
Retirees considering moving to Mexico probably have concerns for their safety. Over the years, there have been many unfavourable stories coming out of the country regarding murders and other violent crimes. Typically, many of these crimes result from drug cartels and other related crime groups.
However, there are safe places to visit and live. As with any other locale, stay vigilant and be aware of your surroundings.
With that in mind, here are some of the safest cities.
Located in the northern Yucatan Peninsula, this capital city is often cited as the safest city in all of Mexico and maybe all of Latin America. It has a crime rate of 21%, with low incidents of violent crimes.
Tourists and retirees love the area due to its proximity to the beach, the architecture, and close archeological sites.
Located on the western side of the country, Puerto Vallarta is a popular traveller and retiree destination. Known for its beaches and bustling nightlife, the area has managed to stay out of cartel conflicts and remains a safe destination.
The city is located in the central highlands and is part of the temperate climate zone mentioned earlier. It’s a cultural center of the area, with colonial buildings and heritage sites. The city does have some unfavourable areas with higher isolated crime incidents, but overall, it’s a safe place to live.
While you might dream of laying around on the beach or exploring ancient ruins, at some point, you might want some companionship besides your spouse or partner. Mexico has a huge ex-pat community, with many Americans and Canadians finding their way south of the border after retirement.
Before deciding on a location, consider if living near other ex-pats is something you want. If it is, you can find an ex-pat haven where other retirees live within a community.
There’s an area mainly around beaches coined “gringo ghettos,” which are gated communities typically occupied by Americans and Canadians.
If that isn’t your bag, you could also go off the beaten path. This might mean immersing yourself in Mexican culture and living like a typical Mexican family would.
It’s hard to pick a place to live. One piece of advice that I would probably take myself is to visit and spend some time in a location before making it official. That way, you’ll understand the general lifestyle and if it agrees with your wants.
It’s always easier to move to another area or change your mind completely before buying a place.
With a tourist visa, you can stay in Mexico for 180 days, but then you must leave the country. This is ideal for many Canadian retirees that come for the warmer climate during Canada’s winter months and head back home to enjoy the spring and summer.
Choosing to live in Mexico part-time can help alleviate the immigration and legal process. Plus, it gives you time to explore the country and figure out if it’s the right choice for you.
If you’re looking to make the leap and stay in Mexico longer than 180 days, you should apply for a Temporary Resident Visa. To qualify, you plan to enter the country and stay longer than 180 days but less than four years.
There are also certain economic solvency requirements needed to obtain the visa. They include:
- Documentation of an investment or bank statement showing an average monthly balance of $55,655 during the past 12 months.
- Showing documentation of employment or pension with a monthly tax-free income over $3,339 during the past six months.
At the four-year mark, you can apply for permanent residency. With that status, you’re allowed to work in Mexico. Similar to the temporary visa application, there are economic parameters.
- Must show documentation of investment or bank account statements with an average monthly balance of $222,622 during the prior 12 months.
- Proof of tax-free monthly pensions greater than $5,566 within the past six months.
Housing in Mexico
Finding the right place to live is paramount when considering a move to Mexico. The country boasts a diverse range of housing options, catering to different tastes, needs, and budgets. Here’s a breakdown:
- Types of Housing:
- Apartments/Condos: Especially common in urban areas and coastal cities. These often come with modern amenities, security, and sometimes community pools or gyms.
- Casas: Traditional Mexican homes, which can range from simple one-story homes to lavish villas.
- Gated Communities: Popular among expatriates, offering additional security and often a community of fellow foreigners.
- Ownership Restrictions: As mentioned, foreigners can’t directly own property near borders or coastlines. This led to the creation of the “fideicomiso” system, where a bank holds the deed as a trustee, and the buyer is the beneficiary, retaining all property rights.
- Costs: Coastal areas, particularly Cancun, Puerto Vallarta, and Cabo San Lucas, tend to be pricier. In contrast, inland cities like Guanajuato or San Cristóbal offer much more affordability. On average, you could expect to pay anywhere from $100,000 to $500,000+ USD for purchasing a home, depending on the location and luxury. Renting might set you back between $400 and $2,000 USD monthly.
- Utilities and Maintenance: Often cheaper than in Canada, but it’s essential to account for these recurring costs. In coastal regions, air conditioning might be necessary, thus raising electricity costs.
Banking and Finances in Mexico
Understanding Mexico’s banking and finance landscape can make your move much smoother:
- Opening a Bank Account:
- Requirements: Typically, to open an account, you’d need identification (passport and a resident card), proof of address, and an initial deposit.
- Popular Banks: Banamex (owned by Citigroup), BBVA Bancomer, and Banco Santander are among the top banks catering to expatriates.
- Currency and Exchanges: The Mexican Peso (MXN) fluctuates, so it’s crucial to monitor exchange rates. Banks often offer decent rates, but local “casas de cambio” or exchange houses might give better deals.
- Credit and Debit Cards: Major credit cards are widely accepted, especially in urban and tourist areas. However, it’s advisable to carry cash in more remote regions.
- Taxes: If you establish permanent residency in Mexico, you’ll be taxed on your worldwide income. However, tax treaties between Mexico and Canada can help prevent double taxation. Always consult a tax professional to ensure you’re in compliance and taking advantage of possible tax benefits.
- Cost of Living Adjustments: While many things in Mexico are cheaper than in Canada, some imported goods or luxury items might be pricier. It’s essential to create a realistic monthly budget that accounts for all living expenses, unexpected costs, and leisure activities.
Which areas in Mexico are the safest for retirees?
Safety is a paramount concern for retirees, and while some regions in Mexico have faced security challenges, many areas are popular and safe for retirees. Cities such as Mérida in the Yucatán Peninsula are frequently cited for their low crime rates.
Puerto Vallarta on the western coast is not only known for its beauty but also its safety, particularly in areas popular with tourists and expatriates. San Miguel de Allende in the central highlands is another safe haven, boasting a significant ex-pat community, cultural richness, and a relatively low crime rate.
Are there any all-inclusive retirement communities in Mexico for Canadians?
Yes, Mexico has seen a rise in all-inclusive retirement communities, particularly in areas popular with international retirees. These communities often provide a range of services, including healthcare, recreational activities, dining, and housekeeping.
They’re designed for those who want a hassle-free retirement experience in a community of fellow retirees, often from Canada, the U.S., and other parts of the world. Popular regions for such communities include the Riviera Maya, Lake Chapala, and Baja California.
What is the retirement age in Mexico?
The official retirement age in Mexico varies based on the year of birth and gender. For men born before 1975, the retirement age is 65, while for women it’s 60. However, for individuals born after 1975, the retirement age is gradually increasing and is expected to reach 65 for both genders by 2030.
It’s also worth noting that this refers to the age at which citizens can start receiving benefits from the Mexican Social Security Institute (IMSS).
Dreaming about how and where you’ll spend retirement is the easy part. Nailing down the details and everything that comes with moving is much harder.
The advice above gives you factors to consider when making your move to Mexico. Just remember to do your research, so you know what to expect before committing.
If you’re open to exploring other tropical retirement destinations, check out my article on retiring in Costa Rica.