Forums > General > Living, Working, Retiring

patrick

Oct 5, 2003, 1:56 PM

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Retirement

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My wife & I want to retire in Mexico but don't know what area to choose. I am 58 & she is 46. We live modestly, don't need a fancy house. Small, two bedrooms & 1 bathroom, small garden area. Is this doable on $450,000 cd?

Rolly

Oct 5, 2003, 2:08 PM

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Re: [patrick] Retirement

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Yes

Rolly Pirate

patrick

Oct 5, 2003, 8:52 PM

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Re: [Rolly] Retirement

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I can see you are a man of few words. Cool. Is it still possible with telephone servce, an ISP, and in home laundry hook ups?

jennifer rose

Oct 5, 2003, 9:06 PM

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Re: [patrick] Retirement

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$450,000 CDN is about 3.8 million Mexican pesos, which should render one a rather nice dwelling, complete with telephone, laundry connections, ISP, and even some furnishings. OTOH, if you're talking only $45,000 CDN, it would be rather difficult.

patrick

Oct 5, 2003, 9:30 PM

Post #5 of 23 (2575 views)

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Re: [jennifer rose] Retirement

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There is something about if it sounds to be too good to be true, it is to good to be true.

We are retiring from self employment, with no pensions. The $450,000cd is the whole taco (can't spell encholada). This includes all moving expenses, fees, etc.

btw What do you do for a living?

Esteban

Oct 6, 2003, 6:11 AM

Post #6 of 23 (2557 views)

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Re: [patrick] Retirement

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Sell all your belongings in Canada. Keep $50,000 Cdn in Cash and a small pickup to carry down what you can't part with. Invest the rest in the TSE in something like PVX or NCN (Canadian Companies on the AMEX) YOu'll have to look them up to see the ticker symbol on the TSE. They pay a good liveable dividend. Rent a place in your city of choice in Mexico and kick back!

Buena Suerte!

Jerry@Ajijic

Oct 6, 2003, 7:30 AM

Post #7 of 23 (2540 views)

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Re: [Esteban] Retirement

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Esteban, I agree that Pat's idea is possible but not real comfortable. I figure 400,000 CDN (less the 50M) is about 320,000. USD and at a earning rate of 6 % would give them about 19,000 USD per year or about 1,600.USD per month. For comparison the current minimum requirements (I think) for a FM3 is 1,200.USD plus 600.USD for each dependent. I am sure they could make it but that would depend on their life style.

(This post was edited by Jerry@Ajijic on Oct 6, 2003, 7:32 AM)

Esteban

Oct 6, 2003, 9:27 AM

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Re: [Jerry@Ajijic] Retirement

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The Canadian Royalty Trusts I was referring to, pay a lot more than 6 percent. But your estimate of seeking a 6 percent return on their income, in these economic times is even high. They have a lot of D & D to do with their investments to make it all pencil out for a move to Mexico. But then again, lifestyle is what it's all about. From dirt floor huts to marble mansions it all depends.

raferguson

Oct 6, 2003, 10:47 AM

Post #9 of 23 (2490 views)

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Re: [patrick] Retirement

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The numbers that I have seen in terms of withdrawal from savings without losing prinicpal are 4% or 5%, so one needs to convert the canadian amount to pesos, and then figure on a 4% or 5% withdrawal rate, and then see if that amount is enough. No way would I have most of my assets in pesos, safer in US or Canadian investments.

Of course, enough money is mostly in the lifestyle, and partially in where you live, as the cost of housing varies a great deal. I understand that the amount of income to get an FM3 is halved if you own a house.

For those planning to live in Mexico, one of the best sources for
information, especially on the cost of living, is the AIM
(Adventures in Mexico) newsletter. It has a practical focus,
with each issue covering a different town or area. $19 per year,
Apartado Postal 31-70, Guadalajara, Jalisco, 45050, Mexico. (My
2002 renewal included an envelope addressed to 1761 Hotel Circle
S, Suite 100, San Diego, CA, 92108, USA). Ask for the back issue
list. Some issues profile actual residents who keep records on expenses, so this should be of special interest.

The other question is whether you want to live in Mexico, in a town that you can afford. I think that one can live cheaply in Arizona, New Mexico, or Texas, maybe as cheaply as Mexico. Mexico is not as cheap as it once was.

http://www.fergusonsculpture.com

joshjay

Oct 6, 2003, 1:00 PM

Post #10 of 23 (2455 views)

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Re: [patrick] Retirement

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I know we have to have an income to live in Mexico in retirement but if I had to figure out the interest from CD's and balance that against inflation and whatever else I would be to frightened to make the move and I would just keep on working in US. Where in this entire process is the "soul" or "dream" ? Im of the opinion that even if I dont have a lot of money, there is something in the nature of "spirit" or "faith" that will get me though. Of course $450,000 Canadian plus "spirit" and "faith" is a grandslam but I think I can do it on a less money and more faith.

alex .

Oct 6, 2003, 2:14 PM

Post #11 of 23 (2433 views)

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Re: [joshjay] fruit of love, etc

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My grandfather warned me when I married young, without means: "Those who try to live on the fruit of love generally starve to death." There must be an analogous saying for living on faith and spirit.

If I had 450K CN in the bank would I do it? Yep.

And what would I do with it? I'd spend about 200K pesos on a taxi permit, another 200K on a 4 door Tsuru with air conditioning to serve as the taxi, run 2 shifts of drivers and a maintenance shift each 24 hours, and I stay retired on the 3 M or so pesos left over.

Alex

(This post was edited by alex . on Oct 6, 2003, 2:43 PM)

juan david

Oct 6, 2003, 3:25 PM

Post #12 of 23 (2411 views)

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Re: [patrick] Retirement

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Pretty much all financial planners use a model that assumes 6% return on your taco, 3% inflation and build in your CPP(start at age 60) and old age pension starting at 65. Everyone needs a budget before striking off into retirement. Mexico is "financially" friendly for Canadians from an income tax point and somewhat better from a cost of living case.
" let sleeping dogs lie"

gpk

Oct 6, 2003, 3:37 PM

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Re: [patrick] Retirement

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All good advice here, but I would plan on buying a house or condo. I've owned and rented in Mexico, and owning is better. Landlords here are not very responsive to complaints re: repairs, etc., but will probably raise the rent if YOU make repairs or improvements. Also, when son/daughter gets married, they need their house back, etc., so renting can be disruptive. FM3 requirement is half if you own--so you are better off for the future when inflation eats your income. ALL THIS IS JUST MY OPINION--

patrick

Oct 6, 2003, 9:26 PM

Post #14 of 23 (2365 views)

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Re: [gpk] Retirement

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What you say makes sense to us and thank you.

And thank you to Rolly, Jennifer, Esteban, Jerry, Ian, Joshjay. The information we've gotten from this web site has been extremely helpfull.

The idea of retiring to Mexico is a radical change in thinking for us......a dream come true.

Nothing is simple. Not just the money (did I just say not just the money? HooWah!). I'm American and my common law wife is Canadian. We own a house that is in both our names. From what I know, if an American owns a home in Canada and sells it he has to pay Capital Gains. So, do we put the house in her name before we get married and move to Mexico?

We haven't found anyone up here that can give us any Canadian/American legal advice.

And the beat goes on :-)

To simplfy things we want to be away from the hub-bub. Quiet, simple. The big event of the day is to go to the local market.

Wheh! Pat & Heather

Again, thank you Pat & Heather

TomG

Oct 6, 2003, 9:45 PM

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Re: [raferguson] Retirement

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Scott Burns from the Dallas News writes good personal finance columns.

http://www.dallasnews.com/business/scottburns/

This worthwill read is titled: "Don't Get Rich, Get a Life"

http://www.dallasnews.com/...online/getalife.html

He also wrote a series of 5 pieces on retiring in Mexico - the ecomonic pros and cons.

Judy in Ags

Oct 7, 2003, 4:55 AM

Post #16 of 23 (2339 views)

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Re: [gpk] Retirement

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"FM3 requirement is half if you own--so you are better off for the future when inflation eats your income."

When we inquired about any discount of income requirement for owning a home in Mexico, we were told by the Mexican Consulate in Kansas City, Missouri that the requirement is the same, regardless of whether you own your home or not. This, of course, could be different at a different consulate, but it would be good to check before you depend on that information.

Also--I would NOT sell all my stuff before moving down here. It takes A LOT of money to replace it!

jennifer rose

Oct 7, 2003, 6:44 AM

Post #17 of 23 (2317 views)

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Homeowner's 50% reduction in income requirements

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In Reply To

When we inquired about any discount of income requirement for owning a home in Mexico, we were told by the Mexican Consulate in Kansas City, Missouri that the requirement is the same, regardless of whether you own your home or not. This, of course, could be different at a different consulate, but it would be good to check before you depend on that information.

In the law (or the regs) is language which provides for the 50% reduction of the income requirement for those who own their own home in Mexico. But the operative words are "may" and "up to."

(This post was edited by jennifer rose on Oct 7, 2003, 6:45 AM)

Judy in Ags

Oct 7, 2003, 6:57 AM

Post #18 of 23 (2308 views)

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Re: [jennifer rose] Homeowner's 50% reduction in income requirements

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I hope you agree, Jennifer, that it wouldn't make much difference even if the law or regs made a more defnitive provision for the reduction if the area consulate would not grant that reduction. May she doesn't even know about it.

D.G.

Oct 7, 2003, 6:58 AM

Post #19 of 23 (2308 views)

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Re: [Judy in Ags] Retirement

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To sell or not to sell, that is the question. Hummm. Here's what we experienced about a year ago.

We took one short bed pickup truck loaded with a love seat, two floor lamps, a small area rug, a stereo, computer, vaccum cleaner and clothes. The destination was a small two bedroom, bath and a half house with living/dining area, kitchen and three patios. The only appliance supplied was a gas range. We bought everything else right down to the dishes to eat off and something with which to cut the grass . Total cost for all items bought there was about 9,000 USD. I think it would be difficult to completely furnish a house on that amount in the U.S.

I would probably go that route again, and not drag a lot of things down to Mexico. I feel that you not only help out the local economy by buying things where you are living, but you also learn the resources of the place where you live, and if an item needs repair or replacement, it is better to have the local contact.

If you do decide this is the route for you, and you do attempt to blend some of the North with some of the South, you should have an idea of sizes, colors and appropriateness for the house you are going to occupy. That way you can edit your own belongings for what is appropriate for your new home. Lot's of times your old furnishings won't fit or look right in a new home, with a generally different decor. You can then take only the bare necessities with you, that might be difficult to locate where you are, and buy the other things locally.Of course, this suggests that you buy a home before you actually move, but if you are contemplating moving a household, then you probably already have made that decision.

Good luck, either way.

Guapo Gabacho

Oct 7, 2003, 7:03 AM

Post #20 of 23 (2306 views)

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Re: [jennifer rose] Homeowner's 50% reduction in income requirements

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Patrick,

An American can now sell their primary residence every two years and be exempt from all federal taxes on the gain.

Isn't Canada the second largest country in the world? Can't you "be away from the hub-bub" in Nova Scotia, P.E.I., or Northern Ontario. I could a lot easier than in Mexico, which is the noisiest place on earth. Also, isn’t the cost of living in rural Canada extremely low?

If I thought your question was sincere, I would suggest that you return to the US and build up your Social Security credits, but I don’t.

++++++++++++++++++++++++++++++++++++++
We do not inherit the Earth from our Ancestors, we borrow it from our Children.

Bubba

Oct 7, 2003, 8:42 AM

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ekammin

Oct 13, 2003, 10:33 AM

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patrick

Oct 14, 2003, 6:31 AM

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Re: [ekammin] Homeowner's 50% reduction in income requirements

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We have heard about a few places like Ajijic,Chappala, etc. We are currently very interested the Xalapa - Vera Cruz area. Tell us more about Ajijic. Anything is better than Northern Ontario. :-)

Thanks, Patrick & Heather