The average salary in Mexico for a college graduate is $650 dollars. That should give you an idea of the cost of living in the country. Living in Mexico is very affordable if you are coming from the US, Canada, or Europe.
Which is one of the main reasons why more and more people are choosing it as a retirement destination.
But Mexico is a big country. It has all kinds of different cities. From colonial towns to modern metropolises. This leads to the question. What are the best places to retire in Mexico on a budget?
A lot of ex-pats agree the best place to retire in Mexico on a budget is Chapala, in the state of Jalisco. This town is located by a beautiful lake, is close to a major city, and the cost of living is reasonably cheap.
But there are many other places that can easily contend for the title. Each with its own advantages and disadvantages.
In this article, we’ll take a look at some of the cheapest places to retire in Mexico where you can live with a higher standard of living than in the US.
The prices in the tables below are considering a comfortable lifestyle. We are even factoring in some luxuries like entertainment and housekeeping. It is possible to live in Mexico with even a much lower budget. Many Mexican families make ends meet with much less.
Also, the prices are for a couple. A single person could spend slightly less.
Best places to retire in Mexico on a Budget
Lake Chapala (Ajijic)
Lake Chapala is home to the biggest retirement community in the world for Americans and Canadians
This colonial municipality in the state of Jalisco is situated by a lake and surrounded by mountains. Making the scenery in the area simply spectacular and making it feel secluded from civilization.
Out of the 5 towns that make up Chapala, the highest concentration of ex-pats is in Ajijic (pronounced a-hee-hee-ick). It is estimated that during Winter, when people come to visit their relatives for the holidays, more than half the population in Ajijic are foreigners.
Life in Ajijic is quiet. This is not a tourist town. And yet, there is plenty of things to do. There are gold courses, fishing spots, guided hikes, and a growing art scene. But one of the best parts about Lake Chapala is that is less than one hour away from Guadalajara, the third-largest city in Mexico. There you can do all the shopping or find everything that isn’t available in the smaller towns. Visiting the beach town of Puerto Vallarta is also an option and not too far away.
Even though Ajijic has seen a lot of growth over the past decade, it is still quite affordable. While the prices – especially for housing – have gone up due to all the new developments and gated communities, the standard of living has also gone up accordingly.
The approximate monthly cost of living in Ajijic for a couple is:
| Housing / rent | $400 – $1,200 |
| Utilities | $50 |
| Groceries | $300 |
| Transportation | $100 – $300 |
| Going out / Entertainment | $200 |
| Cleaning (twice a week) | $250 |
| Total | $1,200 – $2,300 |
\* This includes wi-fi and gas only. All other utilities are generally included in the cost of rent in Mexico.
We go into more detail about living in Ajijic in our article about American retirement communities in Mexico.
San Cristobal De Las Casas
The state of Chiapas in the southeastern part of Mexico is highly regarded around the world for its cultural heritage. And San Cristobal de Las Casas is right in the middle of it.
Surrounded by mountains and a jungle ecosystem, San Cristobal de las Casas is a pueblo magico (“magical town”). This designation is given in Mexico to destinations of high historical, architectural, gastronomic, and cultural value. It also means towns are responsible to keep certain architectural styles and try to preserve that heritage.
This is worth pointing out because it becomes obvious as you enter San Cristobal. The houses have a baroque style with big patios, adorned steel balconies, cobblestone streets, and ornamental patterns of the neoclassic period.
San Cristobal de las Casas has become a destination for people looking for the nice weather of the Mexican peninsula, but looking for a more quiet atmosphere and slower lifestyle than the beach towns.
About 10% of the population are expats, but the real number of non-Mexicans is much higher if you account for tourists that are just there temporarily. Most of them come from the US and Canada, but there is also a big Argentinian community in the area.
The town is a popular destination for retirement, not just for expats. In fact, it is one of the few places in Mexico where the 40+ years old demographic makes up the majority of the population (the average age in the rest of Mexico is 28 years old).
The approximate monthly cost of living in San Cristobal de las Casas for a couple is:
| Housing / rent | $450 – $1,300 |
| Utilities | $50 |
| Groceries | $275 |
| Transportation | $125 – $300 |
| Going out / Entertainment | $200 |
| Cleaning (twice a week) | $200 |
| Total | $1,300 – $2,325 |
Cabo San Lucas
One of the few disadvantages – at least for some people – of some of the other towns on this list is they are quite far away from the US. Cabo San Lucas is a destination worth looking into if that’s a consideration for you. It is only a 2-hour flight away from Los Angeles.
Cabo San Lucas is located right at the end of the Baja California peninsula, in northwestern Mexico. It is a paradisiac beach town with a population of $350,000 people. Out of all the places on this list, it is probably the most “touristy” as it does have a lot of resorts and hotels. It is also on the pricier side of things, but it is way more budget-friendly than Cancun or Puerto Vallarta.
This is a vibrant, colorful town. There is always something going on and plenty of things to do. For retirees, there are plenty of golf courses, sport fishing contests, sightseeing tour both on land and on the sea, spas, film festivals, art galleries, and more. For people who enjoy boats, Cabo has a huge marina too.
And if you plan to have the family visit, the kids will definitely enjoy all the nearby water parks, natural reserves, ATV driving in the desert, etc.
Most of the expats living in Cabo San Lucas come from the US. Unlike other places in Mexico where the percentage of people from other countries is bigger. Because of this, the culture and lifestyle will be very familiar to Americans.
A big percentage of the population speaks conversational English or at least knows enough to communicate. The language barrier isn’t that much of an issue here.
The approximate monthly cost of living in San Cristobal de las Casas for a couple is:
| Housing / rent | $500 – $2,000 |
| Utilities | $100 |
| Groceries | $325 |
| Transportation | $125 – $300 |
| Going out / Entertainment | $300 |
| Cleaning (twice a week) | $250 |
| Total | $1,600 – $3,275 |
Oaxaca City
The state of Oaxaca (pronounced wa-ha-ka) is on the Pacific Coast. Even though it is not talked about very much, its towns and beaches are hidden gems, especially if you are looking to retire in Mexico on a budget.
The capital of the state, Oaxaca city is a blend of colonial architecture and prehispanic culture, specifically Zapotec and Mixtec. It is the kind of place where times seems to slow down.
Oaxaca is one of the places in Mexico where you will find the most influence by Mexico’s cultural heritage. The city is famous for its textile and crafts industry. These are one of the main economic engines of the city along with tourism.
The surrounding landscapes are one of the main attractions of Oaxaca. It is full of places to visit like the ruins of Monte Alban, the petrified waterfalls of Hierve el Agua, and of course, its many beaches. The most notable is Sayulita, which made our list of the cheapest beach towns to live in Mexico and is also a destination worth considering.
Out of the destinations on this list, Oaxaca is the place with fewer things to do and difficult access to modern amenities. For example, internet access is slow and unstable. But if you don’t live a very active lifestyle or if you prefer quieter places, it might be just the right spot. Also, if budget is your main concern, the quality of life that can be had here for very little money is unmatched.
The approximate monthly cost of living in Oaxaca for a couple is:
| Housing / rent | $300 – $1,000 |
| Utilities | $50 – $100 |
| Groceries | $250 |
| Transportation | $100 – $300 |
| Going out / Entertainment | $150 |
| Cleaning (twice a week) | $175 |
| Total | $1,025 – $1,975 |
Related: Social security in Mexico. The definitive guide
Merida
The state of Yucatan has established itself as the state with the lowest crime rate in Mexico for several years in a row. As a result, it has become an attractive living destination for both foreigners and Mexicans. Especially the city of Merida, its capital.
The sunny weather all year round and the green ecosystem around it don’t hurt either.
Merida has also become a hub for tech companies coming from the US and Canada to open local offices in Mexico. This has led to rapid growth in the city. But that hasn’t taken any personality out of the city. At the moment, Merida is a blend of colonial architecture with modern office buildings and even a few tourist resorts.
Its relative closeness to the Mayan Riviera is also a big advantage. Merida is only a 3 hour drive away from Cancun. All the other nearby attractions of the Yucatan peninsula like the Mayan ruins of Chichen-Itza are easily accessible.
Being the largest city on this list, Merida always has something to do. From traditional arts and crafts markets to a vibrant nightlife, shopping malls, medical services, etc.
The one reason why not everyone in Mexico is moving to Merida is the heat. It can get really hot during spring and summer. With averages close to 90°F (30°C) and peaks in the hundreds (40°C). It’s the kind of heat where it’s just preferable to stay inside.
| Housing / rent | $500 – $2,000 |
| Utilities | $100 |
| Groceries | $300 |
| Transportation | $100 – $300 |
| Going out / Entertainment | $250 |
| Cleaning (twice a week) | $250 |
| Total | $1,500 – $3,200 |
Puebla
The city of Puebla has gained a reputation as the industrial hub in the center of Mexico. Many automotive companies such as Volkswagen, Audi, and Nissan have their manufacturing and assembly plants in Puebla. This has helped the city grow and raised the living standards in the area.
Puebla isn’t popular as a tourist destination because it doesn’t have the beautiful landscapes or the weather other cities in the country have. But as a place to live, it should definitely be on your shortlist. Especially if you are looking to retire in Mexico on a budget.
Puebla is a big city. Its metro area is home to more than 3 million people. And yet, in many ways, it still feels like a colorful Mexican town. Primarily because of its colonial architecture. The city is home to many museums, churches, convents, and a cathedral. As you would expect from all that, the city is known for being highly catholic too.
Being the fourth largest city in the country, Puebla has all the amenities you could expect. Shopping malls, hospitals, parks, museums, and the Cuauthemoc Stadium, home field of the local soccer team F.C. Puebla.
The state has a grand culinary tradition. So there are also plenty of restaurants to try out. Some of the better-known Mexican dishes have their origin here, such as the mole poblano, chiles en nogada, and cemitas.
Have you heard about Cinco de mayo? Well, the battle of Cinco de Mayo took place right here in Puebla.
| Housing / rent | $400 – $1,800 |
| Utilities | $50 |
| Groceries | $300 |
| Transportation | $100 – $300 |
| Going out / Entertainment | $200 |
| Cleaning (twice a week) | $250 |
| Total | $1,300 – $2,900 |
Summary
- Some of the best places to retire in Mexico on a budget are Chapala, San Cristobal de las Casas, Cabo San Lucas, Merida, and Puebla.
- It is possible for a couple to live comfortably in Mexico on a budget of $1,100 or less.
- There are many towns in Mexico with expat retirement communities.
