Why Mexico works
Proximity to the US is unbeatable — most popular cities are 2-4 hours by air from Texas, Arizona, or Southern California. Cost of living is 50-70% below US norms. Private healthcare costs 60-70% less. Visa process is straightforward and can be initiated in 30-90 days.
Established expat communities mean English is widely spoken in popular destinations. Strong infrastructure, modern shopping, good restaurants.
Where to live
Mérida (Yucatán): safest large city in Mexico, charming colonial architecture, hot tropical weather. Couple living: $1,500-$2,000/month. Strong English-speaking expat community.
San Miguel de Allende: artistic colonial town, large American expat community, mild climate at 6,000ft. Higher cost: $2,000-$3,000/month.
Lake Chapala (Ajijic, Chapala): largest American expat retiree community in the world. Spring-like climate year-round. Couple living: $1,500-$2,000/month.
Puerto Vallarta / Bucerias: beach town. Larger, more touristy. Active expat scene. $2,000-$3,000/month.
Mexico City: massive, world-class. More expensive than smaller cities. Excellent healthcare. $2,500-$4,000/month.
Visa pathway
Residente Temporal: $2,650/month income for 6 months OR $43,800 in savings. Apply at Mexican consulate in US. Issued for 1 year, renewable up to 4 years.
Residente Permanente: $3,300/month income for 6 months OR $176,000 in savings. Or 4 years as Temporal. Issued indefinitely.
Process: apply at Mexican consulate (in person), receive visa stamp in passport, fly to Mexico, exchange stamp for residency card at INM within 30 days. Total time: 30-90 days.
Taxes
Mexico tax treaty with US prevents double taxation.
Mexico taxes worldwide income for residents. SS may be partially taxable in Mexico. Pension income taxed at progressive rates with US tax credit offset.
Many retirees in Mexico don't owe much net tax because of credits and lower local rates.
Healthcare
IMSS (public): basic public system. Annual fee ~$300-500. Quality variable; major procedures often need supplemental private.
Private health insurance: $100-300/month. Access to top private hospitals (Star Médica, ABC Medical Center).
Cash-pay: Mexican private healthcare is excellent and 60-70% cheaper than US. Many expats simply pay cash for routine care and carry catastrophic insurance.