A New Life South of the Border in Mexico
The formal name is the United Mexican States and is popularly known as Mexico, now the fifth of the top ten destinations in the world for “international retirees” to become Expats in Mexico . More than a hundred thousand North Americans, mostly from the U.S. and Canada, have already gone south, like flocks of migrating birds, to retire in sunny, scenic and affordable Mexico. Drawn mainly by the warm climate and low cost of living, they find that Expat life in Mexico offers much more and can make their retirement years the most fulfilling and peaceful time of their lives.
Climate in Mexico
Mexico is as hot as it is tiny but explosive red Tabasco peppers. Climate-wise, the country is actually divided into the North and South. The North’s average temperatures range from 20-24 degrees C, but it is cooler during “winter” and hotter during summer. Not so in the tropical – hot and humid – South, where average temperatures range from 24-28 degrees C. The main climate-related problems of the country include the extremes of drought and flooding. During hurricane season, the most commonly affected areas are the locales near the Carribean Sea and the Gulf of Mexico.
For the retired expatriate, the siesta is a thoroughly civilized habit, which can save you from the extreme heat of the afternoons, and prepare you for activities in the cooler evenings.
Government in Mexico
Mexico won its independence from Spain in 1821. The country is a federal republic with 31 federative member states, each with its own Constitution and Congress, as well as judiciary and governor. For about 70 years, Mexican politics was practically a one-party system. It was only in the 1977 elections that opposition groups challenged the dominant party, PRI. By 2000, Vicente Fox, became the first opposition member to be elected as the president of the republic.
Mexico is presently considered as a middle-income country, having the highest annual per capita income (US$6,500 as of 2004) in the whole of Latin America. However, poverty is still widespread and 25 percent of its more than a hundred million population lives on less than US$1 a day. Mexico derives nearly a third of its revenue from its oil industry but a good portion of its labor force is still focused on agriculture. The problem of peasant desire for land reached a crisis in 1994 when Zapatistas who belonged to indigenous groups organized and launched an uprising in Chiapas. However, by 2001, the Mexican government had taken action and recognized the rights of its indigenous population to autonomy.
Tax System in Mexico
Mexican residents are taxed on their international income up to a maximum of 35%. Temporary or permanent immigrants belong to the category of Mexican residents. Mexico has drawn up tax treaties with Canada and the U.S. wherein nationals of the two countries who are Mexican residents are subject to Mexican income taxes. After 2004, a tax resident is anyone who has established an abode in Mexico no matter how much time s/he has spent in the country or if 50 percent of his/her income is derived from Mexican sources. This means, as explained in a post at the Mexico Expat Forum last June 5, 2009:
There are no taxes on your foreign income.
Americans who have a monthly income of about $1,500 can be given renewable residency permits. They are also allowed once to import household goods and personal effects duty-free and import a U.S.-plated automobile. Presenting proof of a monthly income of almost $2,000 can lead to the granting of a permanent residency status.
Medical Care in Mexico
After India and Thailand, Mexico is one of the top international choices for patients seeking medical treatment in other countries. Mexico offers quality and affordable medical care not only to foreigners, but also to their own citizens. Mexicans have access to universal medical care. The Mexican government also ensures their citizens’ access to cheap but quality medicine. This though has shown a dichotomy of the health care system in Mexico. The public system is very limited while the private system is top notch at great cost.
Mexican doctors receive basically the same length and quality of training that US medical schools give to their students. However, treatment by that doctor can cost as little as US$5 to US$50 in a government hospital. Every year more than 150,000 Americans look for cheaper and better medical care outside the country. Some doctors estimate that medical treatment in countries like Mexico can cut the cost of major surgeries to 20 to 40 percent of what it would cost in the U.S. In Mexico, you only pay US$350 for a porcelain crown that would cost $800 to $2,200 in the US. Treatment by a specialist for an ear infection cost only $35. Many patients now go to Mexico and other countries for a mix of medical treatment and family vacation, and still save money, in the growing industry of medical tourism.
Real Estate in Mexico
There are no legal impediments to foreign ownership of Mexican real estate. In fact the Mexican government encourages Spanish and US companies to build residential and resort areas along the coast. In the past few years, the property prices in Mexico have increased significantly. A foreigner can own real estate in Mexico and get a secure title so long as the proper research and legwork is done to get the best property at the right value. An expatriate who wants to buy a house can tap US mortgage companies. The range of available Mexican real estate is very wide and you can pick and choose based on your needs and financial capacity. Those who plan on building homes will benefit from building costs lower by 33-50 percent than U.S. Maintenance and taxes are also relatively low.
Shopping in Mexico
Mexico has a wealth of world class handicrafts ranging from one of a kind collector’s items to inexpensive but well made silver jewelry, silverware, low fired pottery, hand woven rugs, masks, copper vases and textiles.
If you are buying expensive products, you should check out prices thoroughly and if necessary buy from accredited and reputable shops. When buying handicrafts, try to buy direct from the producer or as close to him/her as possible to cut down on the layers of prices.
An expat shared their thoughts in the Mexico Expat Forum last October 20, 2009:
In Jocotopec, you will find Bodega Aurrera, an early Sam’s Club relative in Mexico but no longer a membership store. It is on the right as you enter town from the east.
There are Costco stores in Zapopan at Av. Vallarta and Sanzio, across from Plaza Galerias, as well as on Guadalajara’s Lopez Mateo Sur extension, south of the intersection of the periferico and just a bit south of the Sam’s/Walmart/Applebee’s complex on that same highway. In both Costco locations, you will find a Mega store across the parking lot; an excellent place to shop and also part of the Costco corporate family. At Lake Chapala, there is a Walmart in San Antonio Tlayacapan, and a Soriana store at the north edge of Chapala.
If you know the language and have a reliable and knowledgeable guide, you can try traveling outside Mexico City. Large border cities such as Tijuana are also good sources of handicraft. The Mexican government operates a chain of stores called Fonart where the products are of good quality and the prices still reasonable though on the rise. Taxco has 100+ stores that offer a tremendous variety of silver jewelry and table services. These pieces are marked based on the purity of silver used from sterling to extremely fine.
Cost of Living in Mexico
You can live as an Expat in Mexico for approximately one-third of what it costs you to live in the States. For US$2000 a month, you can already live the Mexican version of la dolce vida, the sweet life. You can spend even less if you stay away from the gated communities and expensive tourist oriented restaurants and clubs. You can budget $3-5 a day for food. Houses can be rented for U$300-400 a month if you live in the “suburbs” instead of the exclusive residential areas. Electric bills will reach about $50 if you use air-conditioners. Gas for your cooking needs costs $10-$30 a month and water will cost you just a few dollars each month. Long distance calls are expensive so expect to rely on computers and e-mail for fast and cheap communication.
A better option in living in Mexico, an expat advised the best areas in the Mexico Expat Forum last April 2, 2009:
You are best to stick to small towns. Right next door to Melaque, is Barra de Navidad… both are lovely and can be inexpensive. I would suggest you take a vacation there (or anywhere you are thinking of) before deciding to stay for a few months. In both of those towns, there are a lot of Canadians and Americans who live there until it gets too hot (and some are there year round.) It helps to know Spanish in these small towns because it’s not like PV or someplace where ‘tourist’ staff speak English.