Although most people plan to retire in the USA, the high cost of living is giving some people pause. Any increases in your living costs can put you in a bad spot when you’re on a fixed income. You can try to cut out some wasteful spending. However, there is likely to be some anxiety about whether your retirement income will be enough.
This is why many people are opting to retire in Mexico. You will last much longer due to the low cost of living. Some people are happily retired in Mexico because they are looking for a lifestyle. If you have been considering retirement to Mexico but aren’t sure where to start, you need to know some basics. In this article, we will go over several of the essentials before retiring to Mexico.
1 – Get health insurance
You will have to satisfy a few requirements to get a visa from the Mexican government that allows you to retire in Mexico. One is that you need to be covered with International health insurance for your stay in Mexico. This ensures that you don’t need care without coverage that would burden the healthcare system.
Health insurance in Mexico is universal and is paid for by taxes, so it only covers people who have been permanent residents there and not retirees. This means you have to provide your insurance that meets the minimum coverage the government stipulates. The problem is that Mexico does not have a reciprocal agreement with the US or Canada that covers you while there with your insurance policy back home.
This means that you have to get special international or expat insurance that covers your stay in Mexico. There are a number of insurance companies that have formulated policies for specific countries so you can be sure that you will be covered. The idea is to not just get the coverage required for your visa but also gives you the protection you need to live with peace of mind when abroad.
2 – Know your budget
Even though your cost of living may be low on paper there are still a number of factors to consider to make sure your money is going to last there. Without even realizing it, you can end up spending more money per month there than if you had simply retired in the US. It’s essential to ensure you know how much money you have and set up the proper budget to ensure your money lasts.
The first thing to do is figure out how much money you will have for retirement. Add all your retirement funds and passive income from rentals or investments. This is your total income. You can also have a note for your savings, but that doesn’t count as income.
Now you need to make a budget with your expected expenses and how much you can afford for each one. The biggest one will be housing. In most cases, you will be paying rent. Make sure you don’t exceed 30% of your income for rent, mortgage, or other expenses, such as condo fees. Then, have a percentage you can comfortably pay for your health insurance, groceries, transportation, and other miscellaneous expenses.
With this budget, you can plan out your month so that you never exceed what you have coming in with what is going out. You’ll live comfortably and with peace of mind.
3 – You need a visa
You are entitled to stay in Mexico for up to six months as a tourist. However, to live there and also be able to access the full benefits of residency, you will need a special visa to stay longer. There are visas available for retirees as long as you meet specific requirements.
The first step is to go to your local Mexican consulate and start the paperwork. To be eligible to stay with the special retirement visa, you need to have an individual monthly income of $1,400 per month. For each dependent, add another $520 per month. If you meet this threshold, then you will likely be approved for a visa that lasts for four years.
At some point, you can try to claim permanent residency and not have to reapply for the visa after four years. You will need a minimum of $2,300 monthly income to qualify for permanent residency.
