How Much Money Do You Need to Retire in Mexico?


Are the rapidly rising costs of living in the US causing you to rethink your retirement? Ever consider moving to another country where your dollars stretch further? Mexico might be one of the most affordable and convenient places for Americans to move. But how much money do you need to retire in Mexico?

Hang tight because we’ve got all the answers to that very question. Let’s get started. 

mexico beach

The 3 L’s of How to Retire in Mexico Affordably

1. Lifestyle 

Are you the kind of person who wants to retire to Mexico and live in a luxury villa overlooking the ocean? Or would you prefer a small condo in the outskirts of town? 

Are you looking for a lavish lifestyle that’s unobtainable in the US, but reasonable in Mexico? 

Is eating out regularly at white tablecloth places vital to you? Or are street tacos and local joints more your style? 

So, how much do you need to retire in Mexico? That varies with your lifestyle. You could spend US$800 – $8,000 a month, depending on your choices. There is no right or wrong budget. But you need to pay attention to your preferences and adjust your budget accordingly. 

2. Location

Mexico has it all, from small, vibrant towns to large cosmopolitan cities and everything in between. That means you are spoiled for choice. It also means your chosen retirement location will dictate how much money you need to retire in Mexico. 

Just like in the US, certain cities are more expensive than others. For example, renting or owning in Mesa, Arizona, pales in comparison to living in Manhattan. 

Same goes for Mexico. If you are looking for the best places to retire in Mexico on a budget, don’t go to the most touristy towns. Living in the center of Playa del Carmen, Puerto Vallarta and San Miguel de Allende will cost you a pretty penny. If you really want to live in one of those towns, live on the outskirts in a more local neighborhood, and you’ll have a better chance at getting lower prices. 

Instead, head inland to smaller cities or even Mexico City, where bargains can be found. 

So, how much does it cost to live in Mexico for a year? The answer is directly related to the location you choose. 

3. How “Local” Do You Want to Go?

It’s essential to figure out how local you want to go. It really dictates your best place to retire in Mexico.

Do you want to live in an area without other expats and where English isn’t common? Or do you want to be surrounded by expats and have no need to learn Spanish? 

Again, there is no correct answer. It’s all about your comfort level. The more local you go, the more affordable your retirement will be. 

How Much Do You Need to Retire Comfortably in Mexico?

Let’s face it. Living in Mexico on US$1 isn’t possible. But living a luxurious life at a fraction of the cost is. Below are the most common and essential living costs to factor into your budget. 


Timothy Real Estate Group, Puerto Vallarta

Like elsewhere in the world, housing is the most significant portion of your monthly cost to retire in Mexico.

If you want to buy a home in Mexico, the costs will be much less than the same home in the US—less than ½ of the price. And the real estate market is popping there right now!

You can buy land and build your dream home, buy a condo in a gated community, a villa near the beach, a hideaway in the mountains, a pied-a-terre in the city. The opportunities and prices are endless. 

You can find a fixer-upper for US$50k or a turnkey penthouse condo for US$5M and, of course, everything in between. 

Renting a Home for Your Mexico Retirement 

Suppose you decide to rent instead of own. In that case, you’ll be able to find a one-bedroom averaging around US$500, depending on the location. 

Inland cities like Oaxaca and Merida are even more affordable, and it’s entirely possible to find something for less. 

On the other hand, places like Puerto Vallarta and Tulum could cost you more than US$1200. 

Just like everything else in Mexico, there are a plethora of choices for whatever your budget allows. But know that location and lifestyle will affect the costs of buying or renting a home. 


Electric is a hot button issue for a lot of expats. Air conditioning can be costly and could even cost more than your rent if you use it daily. However, if you are mindful and don’t need A/C so much, it could cost you US$50 per month. Without using A/C at all, it could be as low and US$10 per month. 

Internet in some towns (Tulum, I’m looking at you) is notoriously horrible. In others, the fiber optic speeds are better than in some places in the US. Budget US$35-50 per month for good internet.

Gas and water are often included in the rent. 


Many expats don’t have cars and live in an area where they can walk or bike to everything. Uber and public transportation are very affordable if you need to get somewhere. Some buses are less than US$1. Even longer, city-to-city rides are only a couple of bucks.

If you do have a car, a liter of gas is around US$1. 

mexico fruit and vegetable stand


The best way to save money is to shop locally. That goes for everywhere in the world. If you buy what’s local and fresh, the prices are much more affordable than imports. So, if you are on a budget, limit the number of imported goods you buy. 

The best places to shop locally are the fresh markets. Not only are you buying the freshest produce, meat, chicken, fish and eggs, but you are also supporting the locals.

Yes, in Mexico, you can shop at Walmart, Costco, and Sam’s, as well as the Mexican grocery store chains. Still, there is something about supporting the small local farmers that is incredibly heartwarming. And in most towns, you’ll get the produce quicker and fresher than if you buy it at a larger chain store. It’s farm to table at its best.

Also, at many markets, locals sell prepared food at very affordable prices. Think US$8 for an entire day of homecooked food. 

No matter where you choose to shop, budget an average of US$300 per month to be on the safe side. 

Dining Out

Eating out won’t break the bank either. You can find street tacos and quesadillas for US$1 if you want. Or you can hit the white-tablecloth places and spend US$30-40 for a couple. 

So, it really depends on your lifestyle choices. But, regardless, it will be much less than what you’d spend in the US for the same meal. 


If you decide to retire in Mexico, you’ll never have to worry about healthcare. In fact, high-quality, affordable healthcare is one of the reasons some expats move there.

Many expats have health insurance for the significant stuff and pay out of pocket for minor doctor and dentist visits. An appointment with a specialist could cost anywhere from US$35 and is far more affordable than it would be in the US. Or most countries, for that matter. 

To budget for health insurance, figure US$55-150/month to be on the safe side. It could definitely be on the lower end, depending on your plan and deductible. But shop around as you would back home.  One thing to note is that health insurance premiums are based on age as well as health condition. If you are 65 or over, note that you are likely going to pay more in your monthly premium.

Expats have a choice to purchase expat health insurance or national Mexican insurance. National Mexican health insurance policies are available to those who have their permanent residency.

mexico pink house

The Bottom-Dollar of How Much You Need to Retire in Mexico

No matter where you move to in Mexico, things will likely cost less than in the US or Canada. 

If you are on a tight budget, you can find your perfect retirement in Mexico. However, if you have money to spare, you too can live your best retirement life in Mexico. 

To live a comfortable life in a medium-sized touristy city, start with a budget of US$2,000 per couple. Is it possible to live on less? Of course, it is, but it’s all up to you and your lifestyle. 

Don’t forget to budget for things like flying home and electronics. Generally, electronics are priced better in the US, so stock up when you visit family.

Now you know the average cost of retiring in Mexico. And which factors affect your budget the most. So all that’s left to do is find the best places to retire in Mexico and get the ball rolling. 

Luckily for you, we have a Dream Retirement in Mexico program where you can hear from experts in real estate, banking, law, healthcare, accounting, mortgage lending, fellow expats, and more. We do a deep dive into all the things you need to know before making that leap to move or retire in Mexico.

1 Comment

  1. PG

    Great info. I am still trying to figure out the health insurance issue. Seems crazy that 65+ people don’t fall into a Medicare-type insurance. Are permanent residents also at a disadvantage in terms of cost, when they hit 65? Thanks.

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