How Almost Anyone Can Afford to Retire in Mexico

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If you're thinking about retirement, you're not alone. However, out of 100 Americans who start working at age 25, only 4% are expected to have saved enough for retirement at age 65.

While this number may seem surprisingly low, retiring doesn't have to be as expensive as you may think. If you can lower your monthly income requirement, you can also greatly reduce the total capital that you need to save to retire.

One easy way to do this: retire abroad. For many Americans, Mexico is a top choice. It's not only geographically close, it's also very affordable. Adventure seekers love its bustling cities full of colonial architecture and rich culture, as well as the natural beauty found along its coastlines and highlands. (See also: Retire for Half the Cost in These 5 Countries)

If you're worried you might be among the 96% of people who haven't saved enough for retirement, moving to Mexico may be an effective way to make your nest egg go further.

Cost of Living in Mexico

The cost of living is drastically lower than in the U.S. or in Canada. According to Numbeo, the cost of living in Mexico is nearly 60% lower than the United States, with rent costing 79% less.

However, keep in mind that those are costs averaged over the entire country. Expenses are higher in bigger cities such as the capital, and in places that attract a lot of foreigners, such as Playa del Carmen.

Rental Costs

Based on my experience living in Mexico City and traveling extensively through the country during 2015 and 2016, I have found rents to be far lower than the U.S. You can find a place for as low as $100 a month in off-the-beaten-track destinations, such as the small beach town of Mazunte. However, a great deal like this often means sacrificing on some of the comforts of home such as air conditioning and hot water.

On the upper end of the budget, if you're willing to spend $600–$1,000, you can rent a luxury apartment, even in the more expensive and cosmopolitan destinations.

Health Insurance Costs

Private health insurance is significantly cheaper in Mexico than in the states. It can cost you as little as 20% of what it would cost in the U.S.

Because the cost of routine visits and minor incidents is so small, you may also choose to self-insure, which means simply paying for these costs out-of-pocket as opposed to purchasing an insurance plan.

Doctor Costs

As with rental prices, the cost of going to the doctor also varies to some extent, so these numbers should only serve as a rough guideline.

From my experience, a routine teeth cleaning from a dentist costs $15–$20. A regular doctor's visit costs as little as $25 to $50, while a specialist normally costs $35–$50 and up per visit.

Food Costs: Restaurants and Grocery Shopping

Groceries in Mexico are about a third of the price of food in the U.S., depending on the season and availability. You can even sometimes find American chains like Wal-Mart, where you can buy cheap groceries.

Restaurant prices vary, too, based on type. On the lower end, you can visit food stands to get snacks, which Mexicans call antojitos for as little as 50 cents to a dollar. These include tacos, quesadillas, and burritos. Freshly pressed juice and prepared fruit is also in this price range.

One step up from the food stands are restaurants called fondas. These are small, family-owned establishments that serve two- or three-course meals, including soup or salad, a full entree, and a drink. Sometimes they also come with dessert. Expect to pay $3–$10 dollars.

A truly gourmet, upscale dining experience should set you back $10–$30.

Alcohol Costs

Alcohol in Mexico is widely available, and enjoying tequila or mezcal is a common cultural practice. There are no taboos on drinking, and alcohol is accessible at the local corner store for very affordable prices.

For a bottle of tequila or mezcal you can expect to pay $10 for a low-quality bottle and up to $40 for an artisanally produced bottle of very good quality alcohol.

A six-pack of beer starts at $4–$6. There are not as many microbrew options available as in the U.S., but some bars do offer local, small-batch beer, usually priced around $4 a bottle.

Mexico is an attractive place to retire, not only because it is an affordable option, but because of all that it has to offer, from interesting cultural experiences to the hospitable locals who often go out of their way to make you feel at home.

Transport Costs

If you're traveling by plane, prices start around $250 for round-trip tickets to or from the U.S., and $40–$100 for trips within country. Long-distance coaches are an even cheaper alternative to internal flights. An eight-hour basic bus trip costs about $25, varying a bit depending on your destination. You also have the option of paying more for a first-class bus that includes drinks, snacks, entertainment (TV and music), and seats that are designed to be comfortable to sleep in.

Local transportation options include the bus (on average 50 cents) and, in Mexico City, the Metro (25 cents).

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