Yahoo Finance Here’s How Much the Average Retiree in Mexico Has in Savings
Over 2 million Americans have moved to Mexico in search of a better life, reported International Living. This makes Mexico the most popular country for U.S. citizens living abroad. And it’s no wonder that so many people are retiring there.
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The country has a lot to offer, not least of which is a lower overall cost of living. While not every spot in the country is going to cost the same, and not every retiree will have saved the same amount, it’s generally going to be much cheaper to retire there than in the United States.
Here’s a breakdown of what it costs to retire in Mexico and how much the average retiree there has in savings.
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Cost of Living in Retirement
The cost of living in Mexico is about $656 for a single person, according to Numbeo. Double this amount for a couple retiring together, and you’ll have $1,312. This is still about 42.5% less than the average cost of living in the United States.
This amount doesn’t include rent, but keep in mind that rentals cost an average of 62.5% less in Mexico than they do in the United States.
You can find a one-bedroom apartment in Mexico for between $442 and $652 (11,951 to 8,114 Mexican pesos). A three-bedroom apartment costs about double that amount — still far below the average cost of a U.S. apartment.
But what about other costs? Here’s a breakdown of the average monthly cost of living in retirement in Mexico City:
Housing: An apartment goes for anywhere from $607 to $2,000 a month, with the more expensive options being three-bedroom units in the city center. You can find cheaper options outside the city center or if you go with a smaller place.
Food/groceries: This depends on whether or not you dine out a lot or tend to cook at home. An inexpensive meal out costs around $10 per person. Other groceries are more on par with what you’d spend back home. The U.S. Bureau of Labor Statistics estimates that the average American household — including families and individual units — spends $475 a month on food at home.
Healthcare: The cost of healthcare in Mexico is roughly half of what it is in the U.S.A. For retirees, costs vary from about $63 to $93 a month per person, according to International Living.
Transportation: A monthly public transit pass costs about $20, while a brand-new car — think a Toyota Corolla sedan or the equivalent — is around $23,000.
Utilities: The cost of basic utilities, which includes heating, cooling, electricity, water and garbage, is $48 a month for a 915 square foot apartment.
Miscellaneous expenses: This is where costs can vary pretty heavily, depending on your retirement lifestyle goals. You could easily spend hundreds of dollars on entertainment, leisure, clothing, personal items and more each month — or you could live more frugally. Either way, you’re bound to spend less than you would in the U.S.A.
Overall, Numbeo estimates that an individual spends about $720 a month without rent in Mexico City. With rent, expect to spend between $1,327 and $2,720 a month.
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Average Retiree Savings in Mexico
As reported by International Living, a pair of retirees could comfortably live in Mexico on $2,500 or less a month. That’s about $30,000 a year.
The U.S. Department of Labor estimates that the average American spends about 20 years in retirement. That means you’ll need roughly $600,000 in retirement savings to live comfortably in Mexico.
There are some minimum requirements to residing in Mexico long-term. In particular, you’ll at least need a temporary resident visa which lasts up to four years. To qualify, you’ll need one of the following:
An average balance of $45,000 over the past 12 months; or,
$2,400 to $2,600 in net income each month for the past six months or more.
Those who want to extend their retirement in Mexico may apply for a permanent resident visa. If you’re 65 or older, you’ll need at least $293,000 in your bank account over the past 12 months to qualify — or a net income of $7,300 a month for the past six months.
Now, assume the average retiree has the baseline funds needed for residency and receives an average Social Security paycheck of $1,907 a month. This means they’ll have between $45,000 and $293,000 plus their monthly Social Security income to sustain them through their retirement years — depending on their residency type.
And if they go prepared with the full amount needed to retire comfortably, they’ll have closer to $600,000 in savings and investments.
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This article originally appeared on GOBankingRates.com: Here’s How Much the Average Retiree in Mexico Has in Savings
