Sunday, June 16, 2024

Why do US citizens keep retiring to Mexico?

Mexico continues to be the preferred country for retirement among United States citizens, as confirmed in an updated 2024 report by Investopedia.

In 2020, more U.S. citizens moved to Mexico than to any other country, and was a top destination for retirees. And in 2022, the U.S. State Department reported that 1.6 million U.S. citizens were residing in Mexico.

Merida
Mérida is becoming a popular destination for expats, thanks to its Caribbean weather, its Old World charm and its status as one of Mexico’s safest cities. (Like Where You’re Going)

For many, the main reason behind retiring in Mexico or any other country is affordability — looking for a quality of life that is no longer within reach in the U.S. 

“While retirement abroad requires careful planning about visas and taxes, staying in the U.S. could mean managing higher costs of living and expensive health care,” Investopedia said in a March report.

Which countries are U.S. citizens’ favorite destinations abroad?

Mexico tops the list as a destination for U.S. citizens living here, according to data reported by the U.N. in 2020. Canada is the second most popular destination, with 273,226 U.S citizens residing there.

The other countries rounding out the top 10 choices are as follows: 

  • The United Kingdom: 170,771
  • Germany: 152,639
  • Australia: 116,620
  • Israel: 76,794
  • South Korea: 68,050
  • France: 61,668
  • Japan: 58,340
  • Spain: 57,112

Cheaper housing and healthcare: big motivators

The Organization for Economic Cooperation and Development (OECD) found that average housing prices in these countries are lower than in the United States, with the exception of Canada.  

However, according to the OECD’s most recent data, average housing costs in Mexico are significantly lower — 21% lower than in the U.S. 

Mexico also has the cheapest healthcare among the top 10 destinations. 

According to the OECD, healthcare in Mexico is 60% cheaper than in the U.S., a fact that is also driving Mexico’s medical tourism industry. In 2023, Mexico ranked as the world’s second most popular country for medical tourism. 

U.S. retirees with legal residency in Mexico can sign up for public health insurance through the Mexican Social Security Institute (IMSS) and pay a premium that is much smaller than just about any health insurance premium in the U.S. However, most choose to buy private insurance coverage since many find private healthcare in Mexico to be more affordable than in the U.S.

Medicare doesn’t follow U.S. citizens abroad — but Social Security does in the top 10 countries on the list. And, yes, you can continue to collect your Social Security payments if you’re retired and living in Mexico. The U.S. Social Security Administration sent some 62,000 payments to Mexico as of November 2022, just behind Canada and Japan.

With reports from Investopedia

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