You are not stuck in the USA. Move to Mexico, Part One

Leave the country?

If you really believe, along with Trump, that the USA is a hell-hole of carnage, economic misery, crime, and Democratic Party corruption, then you are free to leave. 

If, on the other hand, you thought things were pretty good in the U.S., but since Americans chose a right wing populist autocrat reminiscent of Germany in 1932, and you want out before the real chaos begins, then you, too, are free to leave.

Or maybe you just want a better place to live in retirement.  

Erich Almasy is a college classmate. He and his wife Cynthia Blanton met and matriculated at Harvard College and graduated from the Harvard Business School. They worked as management consultants, traveling the world on business and for fun. They spent 20 years in Canada and retired to San Miguel de Allende in 2019. They have three miniature schnauzers. They hold passports from the United States and Canada, and Erich has an E.U. passport from Austria. 

Erich decodes the economics of moving to a popular city in Mexico.

Guest Post by Erich Almasy

Retiring in Old México Part One - Can you afford it?

I am sitting on my patio, enjoying the sunshine and 77°F temperature, gazing at a view of La Parroquia. I am drinking a Modelo Especial beer that costs 83 cents at the local supermarket. Not to rub it in, but life is pretty good in México. How good, you ask? Let me try to describe it.

 

I live in San Miguel de Allende, a 500-year-old colonial city in the center of México. The Centro (heart of the town) is a cobblestoned UNESCO World Heritage site with no stop signs or traffic lights. Along with the surrounding campos (country townships), our total population is about 180,000. We are roughly an hour’s drive from the nearest large city of Santiago de Querétaro, which has about 1.5 million people and is an industrial and commercial center. San Miguel is about a ten-hour drive due north to the Texas town of Laredo, pretty much the nearest part of the United States.

Expats account for less than ten percent of the population but have an outsized impact on the local employment of maids, gardeners, and maintenance people. Despite this, 90 percent of the tourists are Mexicans, and we have become the wedding capital of México due to San Miguel's most famous sight, the parish church (Parroquia de San Miguel Arcángel), characterized by its pink 'wedding cake' towers that soar above the town.

So, what does retirement cost in San Miguel? Imagine a middle class couple, one of them perhaps a retired school teacher with a government pension, each with a Social Security check. Or perhaps there is an IRA to withdraw from, or the proceeds of the sale of a house. One way or another, presume a couple with $100,000 a year income from all sources, and no debt. Could they retire in San Miguel de Allende?  

That income equates to a current monthly income of over MXN$ 400,000 which is not taxed in México and is unlikely to be taxed by the United States. Even though San Miguel is now one of the most expensive places in México and has seen an inflationary jump, this couple can live pretty well. Here is what their life looks like in U.S. dollars:

Shelter: Many tourists arrive for a week’s vacation and, falling in love, buy a home before they leave. The purchase will run between $150,000 for a condo on the outskirts and $1.5 million for a restored colonial house in Centro. Many others choose to rent since mortgages are nearly impossible to obtain. Rental of a two to three-bedroom home will run from $1,000 to $2,000 per month, depending upon location. Maids and gardeners cost between $5 and $8 per hour plus contributions to Social Security and vacation. Plumbers and electricians cost about $30 per hour. ($1,500 per month) 

Utilities: Water and trash pick-up are through the local utility and cost less than $10 monthly. Electricity is via the National Electric Utility (CFE) and runs about $125 monthly. Your CFE bill is used as a universal proof of your residence. ($135 per month) 

Transportation: Ubiquitous buses make local public transportation easy and cheap (8 pesos or 40 cents per trip). Taxis cost between $4 and $5 with tips to travel anywhere in town. Temporary Residence (which converts to Permanent after four years) allows ex-pats to use a foreign-plated car for that period. Gas is sold in liters (3.785 to a gallon) and runs about $4.70 per gallon. Auto insurance is about $600 per year. ($400 per month) 

Food: Groceries are less expensive than in the United States (which imports over $11 billion of food from México annually). Eggs are less than $2 per dozen and are farm-fresh. Locally-grown fruits (mangoes, avocados, bananas, oranges, lemons, limes, and papaya) and vegetables (corn, squash, chiles, beans, and rice) are cheap. Meats vary, with pork and chicken being extraordinarily cheap and grass-fed beef being more expensive. ($750 per month) 

Dining Out: San Miguel is a gourmand paradise, with over 500 restaurants and new ones added weekly. We celebrated Cynthia’s recent birthday at an authentic Spanish restaurant. A plate of nine giant tapas, two large bowls of Zarzuela seafood stew, and a bottle of Verdejo white wine was MXN$1,500 or US$75. ($600 per month) 

Language: The local language is Mexican Spanish, which can differ from Spanish in several ways, especially regarding food terms, from Spanish Spanish. Several language schools in town can help begin or polish your language skills. Prices of three-week courses at Warren Hardy run $285. ($100 per month) 

Culture and Entertainment: One of San Miguel’s key features is the creative people who have flocked here since art schools were established after World War II. Live music venues include restaurants, jazz clubs, and the Pro Musica organization, which hosts over 30 annual concerts (and even an opera) by classical musicians visiting from around the world. A local multiplex movie theater offers first-run American films (with Spanish subtitles) for $5 per ticket. ($200 per month) 

Security: Despite the criminal cartels’ frightening role in parts of México, San Miguel is exceptionally safe. Most homes have electronic security systems that run $25 per month with monitoring, and many neighborhoods have security people who patrol at night and on weekends. ($85 per month) 

Telecommunications: Nearly everyone in México owns a cellphone, and rates are very low. AT&T México charges about $250 for two years of unlimited cell and text calls throughout North America, plus 5 GB of monthly data. Fiber optic unlimited Internet service is less than $30 per month. ($100 per month) 

Health Care: Many ex-pat retirees retain Medicare plans and their U.S.-based doctors, while others are happy to self-insure. An exhaustive annual check-up with six pages of test costs less than $150 (including the one-hour doctor’s visit of $45). Dental care is cheap, with check-ups, X-rays, and cleaning running $60. Medical specialists in Querétaro are usually about 20 percent of the cost in the United States. ($250 per month)

Pets: San Miguelienses love dogs; nearly every home has from one to three. Top-rated veterinarians cost about $100 per visit for shots, check-ups, and other care. ($75 per month) 

Personal Care: Haircuts for men are about $25 with tips and $145 for color, highlights, cuts, and tips for women. Manis, pedis, and massages are all a fraction of U.S. prices. Pfizer/Moderna COVIS shots were free and the boosters are available from local doctors. ($50 per month) 

Sports and Fitness: There are several first-rate fitness clubs in town with up-to-date equipment that costs a family $70 monthly, and trainers cost about $20 per session. Several public sports venues in town have tennis and pickleball courts with various hourly rates. The Club de Golf Malanquin on the south side is over 50 years old and includes a full restaurant/bar, an 18-hole golf course, a 25-meter Olympic swimming pool, six clay tennis courts, two pickleball and two racketball courts. An equity membership is presently $20,000, although resales can cost less. ($500 per month) 

Shopping: As a tourist town, San Miguel has a vast assortment of clothing, Indigenous art, and furnishing stores. These range from inexpensive galleries along the half-mile Artisanal Walk to expensive boutiques with the latest fashions from Mexico City designers. A mall on the edge of town includes the multiplex theater and a Liverpool, Mexico’s largest department store. Online orders from the United States can be sent to Laredo and brought to San Miguel for a fee plus the 17 percent VAT. Mercado Libre (Latin American) and Aliexpress (Chinese) online marketplaces round out the shopping universe.

Grand Total: ~$4,500 monthly or about one-half of annual income.

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