I am often asked what it is like to live full time in Mexico and if it is really a lot cheaper than living in the States. In this article I want to give you real, current data on what things cost so that a comparison can be made. I have to warn you that Mexico, like the States, has a wide variety of cost of living. As San Francisco is much more expensive than Ames, Iowa, so San Miguel Allende is a lot more expensive than Coatepec, Veracruz. But the following figures will give a global idea of basic costs that can serve to help you make a decision if, economically, Mexico might be an attractive option for your own retirement living.

There are virtually no mortgages in Mexico so a house purchase is on a cash basis. The buyer usually pays the closing costs and title fees which are a percentage of the selling cost. In this area nice houses are selling for around $120,000 to 300,000. The 1600 sq ft house next door to mine is a 2 story, 3 bedroom, 1.5 bath house overlooking a nature reserve and is for sale for $130,000. Yearly taxes run $20 (yes, twenty dollars!).

If buying a home is not in your plans then renting is the other option. Typically you will pay a first and last month’s deposit but you will almost never receive a refund. For some reason owner’s seem to believe that the money is theirs to keep. You will most likely also have to purchase all the kitchen appliances. Stove and refrigerators are not part of rentals. House rentals are in the neighborhood of $500-700 month.

Once your living situation is decided other costs are minimal. Gas (used for hot water and cooking) runs $35 per month, electricity and water about $40 month, cable TV $20 and phone with wireless computer service $80. I pay a full time housekeeper $240 a month plus a 2 week bonus at Christmas (required by law) and a week’s paid vacation each year. I also contribute to her children’s education expenses and give her all the time off that is necessary to attend school functions.

Car insurance and registration on a 2004 Honda CRV run $1000 a year and health insurance with a private company that provides coverage outside of Mexico is $600 yearly. Groceries average $200 a month.
In this area there is no heating or cooling expense since the climate is perfect for me! As you see, a ball park figure of $1500-1800 a month would cover basic expenses if renting,, less if you own your home.


It is hard to deny that living in Mexico is less expensive than living in the US. However, another consideration is how often you may want to return to the States to see children and grandchildren. Airfares are on the rise and can easily take a big chunk out of one’s pension so this should factor into your decision to live far from family. If you decide to apply for a resident visa the yearly renewal runs around $400. There is no functioning mail service so if you need to receive ‘care’ packages, they will be sent via DHL which is very expensive. Most of us live without and wait until we make a trip North. These days, however, we have easy access to Home Depot, Costco, Walmart, etc.

Making the decision to live in Mexico is not one that should be based solely on cost of living considerations. However, for most of us figuring out how far our limited resources will go certainly makes life in Mexico seem very appealing.