Mexico can be a cheap place for retirees to make their dollars go farther, as the cost of living south of the border isn't as high as in the United States. Monthly expenses can range from a few hundred to several thousand dollars. It all depends on where the retiree chooses to live and the standard of living he wants to maintain once there.

Costs Vary Widely

Mexico City is viewed as the most expensive place to live, but then life in most capital cities is always more expensive than the hinterlands. Coastal cities such as Mazatlan and Puerto Rico are generally considered more expensive places than inland because vacationing tourists don't worry about budgets. Carl Franz, who writes about retiring in Mexico for "The People's Guide to Mexico," says he could survive in Mexico for $400 a month, maybe even as little as $300 with scrimping a little bit. At the other end of the spectrum, International Living estimates it will take more than $2,100 a month to live comfortably in Mexico.

Standard of Living Must be Considered

So why the big difference? To live on a few hundred dollars a month, one has to live at the same standard of living as his Mexican neighbors, Franz says on his website, People'sGuide.com. (See Reference 1) This means paying about $150 a month for apartment rent. He also estimates $5 a day for food, including restaurant meals, for two people, and $100 a month for utilities, bus transportation and miscellaneous expenses. This would be bare-bones, with no Internet, cable TV, servants or nights out on the town. To maintain a lifestyle in Mexico that is comparable to the one enjoyed in the United States, Franz advises retirees to plan on housing costs that are 50 percent lower or maybe even as low as 25 percent if the area is not overrun by tourists or other retirees. Food costs should be about 25 percent less, more if you do a lot of your own cooking. He also said a reasonable budget includes $10 to $20 a month for utilities, minimal long distance calls though local service is affordable, $30 a month for Internet service, and $2 to $3 an hour for occasional household help. He also recommends budgeting for return visits to the United States.

Higher Budgets Allow for Some Extras

InternationalLiving.com (See Reference 2) said retirees living in Mexico in 2008 needed $2,135 to get along comfortably. Their monthly budget includes $800 for rent, $125 for utilities, $300 for household help, $300 for groceries, $250 for eating out and entertainment, $150 for car expenses, $110 for health care, $150 for telephone and Internet, and $100 for miscellaneous expenses such as clothing. InternationalLiving is a print magazine and online source for expatriates living in countries all around the world.

Source:

PeoplesGuide.com: A Realistic Budget

InternationalLiving.com: Mexico---still the world's best retirement haven

Resource:

Mexconnected.com

GrandTimes.com: Live Well in Mexico