Mexico Retirement Guide for US Citizens

Country Population:  129,197,274

In Mexico, the northern regions are known for their desert landscapes, exhibiting high temperature fluctuations with hot summers often surpassing 32°C and relatively cooler winters, alongside minimal, sporadic precipitation. Central Mexico enjoys a temperate climate, with temperatures ranging between 12°C (54°F) and 25°C (77°F), moderate rainfall during the summer.

Contrastingly, southern Mexico, including areas like the Yucatán Peninsula, boasts a tropical climate with average temperatures around 28°C (82°F) and high humidity, receiving substantial rainfall, especially from May to October, supporting lush greenery. Coastal regions along the Pacific and the Gulf, including the Caribbean areas, also enjoy warm climates with temperatures around 28°C (82°F), experiencing distinct wet and dry seasons, with the bulk of their rainfall occurring between June and October, fostering rich biodiversity in these zones. 

The Mexican healthcare system is recognized for its high standards and efficiency, particularly in urban centers where hospitals and clinics are well-equipped. Many Mexican doctors have trained in the US or Europe, ensuring a high level of English proficiency among medical professionals. Personalized care, including house visits by doctors, remains a valued aspect of the healthcare experience in Mexico, distinguishing it in the modern medical landscape.

Mexico’s healthcare operates on a three-tier system: Mexican Social Security Institute (MSSI) for employees in the public and private sectors. Those not formally employed, including expat retirees with legal residency, can opt for voluntary enrollment in MSSI, providing a pathway to healthcare coverage outside traditional employment. Additionally, private insurance offers enhanced comfort and services for those who prefer a more exclusive healthcare experience, albeit at a higher cost.

For expatriates in Mexico, the cost of comprehensive health insurance varies by nationality, reflecting the need for potential coverage in their home countries. Americans often pay around $5,900 annually, including US coverage. By eliminating US coverage, costs drop significantly; Canadians might pay around $3,000, while Europeans could see rates around $2,750 annually, illustrating how location influences health insurance premiums for expats in Mexico.

In Mexico’s private sector, a doctor’s visit is quite affordable, costing around $20). Diagnostic tests are also less expensive, often costing up to a third less than in the US or Canada. However, costs for more complex procedures in the private sector can accumulate, highlighting the need for comprehensive health insurance coverage.

Direct flight durations from Mexico City to various US cities vary, to New York, it is approximately 5 hours; to Miami, around 3 hours 30 minutes; and to San Francisco, about 5 hours 30 minutes. The cost for one-way flights from Mexico City to New York starts at around $250, with round-trip flights beginning at approximately $394.  Flights prices from Mexico City to Miami start at $163 for one-way flights and $247 for round-trip. Flights from Mexico City to San Francisco start at $164 for one-way trips and $287 for round-trip flights.

Mexico’s position at 133 out of 168 countries in the Global Peace Index reflects its varied security landscape. While some regions face significant crime and kidnapping risks, others, particularly where expatriates tend to reside, are notably safer and provide a secure living environment.

The US Department of State provides detailed travel advisories for Mexico, categorizing states based on safety and security risks. Some states are marked as “Do Not Travel” due to high levels of crime and kidnapping, while others may have specific restrictions or guidelines for safer travel. Yucatán and Campeche states are considered safe with a recommendation to exercise normal precautions. Conversely, states like Tamaulipas and Sinaloa are advised against travel due to crime and kidnapping, reflecting significant safety concerns. States like Aguascalientes, Baja California Sur, and Chiapas in Mexico are at Level 2, where visitors are advised to exercise increased caution due to crime. While these areas are not as high-risk as those at Level 3 or 4, visitors should remain vigilant, especially at night and in less populated areas.

The advisories recommend US citizens to exercise caution, adhere to travel restrictions, and stay informed about the security situation in their respective locations in Mexico.

The 2023 Expat Insider Report places Mexico at the top for local friendliness, with 91% of expats finding locals generally friendly and 89% feeling welcomed as foreigners. This contrasts with Mexico’s 94th rank in Gallup’s index, suggesting a divergence between expat experiences and broader migrant acceptance perceptions in the country.

The disparity in Mexico’s rankings in Gallup’s Migrant Acceptance Index versus Expat Insider Report—highlights the different perspectives captured by these surveys. Gallup assesses local attitudes toward migrants broadly, whereas the Expat Insider focuses on expatriates’ personal experiences. This suggests that expatriates in Mexico feel exceptionally welcome and integrated, making the Expat Insider’s findings particularly relevant for individuals considering Mexico as a potential expat destination, offering them a nuanced view of acceptance and community integration in the country.

Mexico ranks 89th out of 113 countries in English proficiency, according to the EF EPI, with a score of 451, below the global average of 493. In Latin America, Mexico is positioned 19th out of 20 countries.

In any case, English proficiency in Mexico varies, with higher levels typically found in tourist areas, major cities, and among individuals working in sectors like tourism and international business. While English is widely taught in schools, proficiency across the general population can be inconsistent. In urban and tourist-heavy regions, expats and travelers often find it easier to communicate in English, though a basic knowledge of Spanish is beneficial for deeper cultural integration and in more rural or less tourist-centric areas.

Living costs in Mexico City are significantly lower than in New York City. Consumer prices, excluding rent, are 51.6% lower, while including rent, they’re 62.2% lower. Rent in Mexico City is 73.8% less expensive. Dining out costs 55.7% less, and groceries are 48.7% cheaper. However, the local purchasing power in Mexico City is 63.2% lower than in New York.

In New York City, renting a one-bedroom apartment in the center costs about $4,189.81 monthly, significantly higher than Mexico City’s $1,069.77. For purchasing, New York’s price per square foot in the city center is $1,644.57, compared to Mexico City’s $311.80. Dining out is costlier in New York, with an inexpensive meal at $30 versus Mexico City’s $10.19.

Mexico’s tax system for individuals includes a progressive income tax, where rates range based on income levels. Residents are taxed on their global income, while non-residents pay taxes only on income earned in Mexico.

Expats, including retirees, are subject to the general tax rules based on their residency status. If they’re considered residents for tax purposes, they are taxed on their worldwide income. Mexico has a double taxation agreement with the US, which can help mitigate the tax burden for US expats by allowing them to offset taxes paid in one country against their tax liability in the other.