Live and Retire in Mexico: Cost of Living

Many people want to retire in Mexico because they have heard that the cost of living here is lower than in the U.S. or Canada. Mexico became famous for being cheap in the 60s and 70s and I have no doubt that it was. My experience from

2001 to 2007 (at the writing of this page) has been that cheapness is relative because buying power is relative. Here’s what I mean.

When you are spending dollars in Mexico your buying power is stronger than when you are spending pesos in Mexico, so in that sense the cost of living in Mexico is lower than up north. At the same time, it might not be as much lower as all the hype would make you expect. There are many factors that make Mexico more expensive than we dream.

If I Retire in Mexico Will it Lower My Cost of Living?

The most obvious factor that makes Mexico less cheap than we dream is that there are many places where prices are quite high. Ajijic, near Guadalajara, Cuernavaca, near Mexico City, and Cancun in the “Riviera Maya” are all examples of places in Mexico that have a high cost of living and they are certainly not the only ones. Obviously, the presence of a high percentage of Americans, Canadians, and other foreigners drives prices up (as well as the presence of lots of Mexico’s richest, too).

For example, renting a tiny house in Cuernavaca costs between $400 and $800 U.S. dollars a month. If $400 sounds cheap to you, then you need to understand what I mean by tiny. Tiny in Cuernavaca can be the size of a camping trailer. Would you pay $400 a month to live in a camping trailer in someone else’s back yard? That’s the way many of the least expensive places to rent are set up. Really the only way to get a good sense for the true cost of living any place in Mexico is to rent there for 6 months or so.

Dear Ms. Taylor;

Thanks for writing such an informative, enjoyable and readable e-book! The information you have provided is helping me with my planning for an extended stay, 2-3 months, in Mexico.

I don’t have a printer at home and I’m requesting permission to store an electronic copy of your book on my iPod until….

–Peter A Cassidy
British Columbia, Canada

A less than obvious factor that makes the cost of living in Mexico higher than we dream is that many things that we take for granted up north are not automatically in place in Mexico. Unsafe drinking water means that we must have a water filtration system or purchase bottled water. The monopolized telephone system charges outrageous prices causing people to avoid using the phone and thus generating the hidden costs of lost potential or to contract a variety of other services to meet their needs and thus costing extra time and money. The relatively poor transportation system makes travel more time consuming and tiring. The unreliable electrical system may create a need for alternatives. The rampant class-ism creates a lack of customer service in industries nationwide. I could go on, but I think you get the idea. Mexico is not a sunnier version of the U.S. It’s a developing country. The only way to truly calculate these “costs” in your life is to experience them and see for yourself before you decide to live or retire in Mexico.

Tired of authors talking around cost of living in Mexico but never giving any real information?
Get straight answers.

Another factor that can make the cost of living in Mexico extremely high is to have to earn money in Mexico. High paying jobs in Mexico are rare and hard to find. Most jobs don’t pay enough to live on and often the hours are long and split shifts are common. To top it off, if you retire in Mexico, then you are probably over 50. Mexico is “ageist” and it’s increasingly hard to get a job once you pass about 40 years old. I suggest that you do not live or retire in Mexico unless you have some U.S. or Canadian dollars to spend — or are just on a one or two year lark and have a way to move back north.

See also The Cost of Living in Mexico Depends on Your Lifestyle for a useful way to figure out what your personal buying power will actually be once you live or retire in Mexico.

Cut The Negativity and Give Me the Facts, Please.

To help you figure out the cost of living in Mexico, click here to see a detailed grocery list.

Budgeting in Mexico

Click here to read some tips on budgeting when you retire in Mexico.

Click here to read about how much and how rapidly prices have been increasing (2007).

Click here to read a real-life case study of costs for an expatriate in Ajijic.

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