The International Community Foundation recently completed a study on U.S. retirement trends in Mexico. This is the first of a series of studies that will be done. Over 1,000 people were interviewed and you can see the full results of the study here.
Following are some highlights from the study:
… Respondents are also financially comfortable by Mexican standards. Almost 70% have an annual income over $25,000, giving them over $2,000/month allowance. Even so, our respondents signaled that although they spend less in Mexico (nearly 70% spent less than $2,000/month on household expenses), a majority feel their quality of life is actually higher than in the U.S. Nearly 75% stated that the cost of living was a major factor in their decision to retire to Mexico.
… Low property taxes are also an attraction in Mexico; most focus group participants reported paying a fraction of what they paid in the U.S., but recognized that with additional taxes, infrastructure and services would likely improve.
… They also prefer coastal living and enjoy recreational activities that center on the water. Nearly 56% take pleasure in coastal leisure activities such as fishing, swimming, surfing and boating. Just walking along the beach was mentioned by 70% of respondents; and relaxation was a major “activity” mentioned by 65% of respondents. Notably, only 14% mentioned golf as a desired pastime.
… Public safety is another key factor in retirees’ decision to stay in their “adopted” coastal communities in Mexico or move on. The single-strongest factor that would cause respondents to consider leaving Mexico was a noticeable increase in crime impacting retirees or tourists (58%); 46% stated that safety issues were a concern they considered when deciding on Mexico as a retirement destination. 22% have noticed an increase in crime following the global economic recession, and 66% cite narco-violence as an important public policy issue to retirees in Mexico. For those who were purchasing a home, 78% stated that safety was an important consideration in their decision.
… Despite their concerns, only 7% reported that narco-violence and security concerns have reduced the frequency or duration of their trips to Mexico. Furthermore, 60% have not changed their attitude in any way about their personal safety since they have been living in Mexico.Despite their concerns, only 7% reported that narco-violence and security concerns have reduced the frequency or duration of their trips to Mexico. Furthermore, 60% have not changed their attitude in any way about their personal safety since they have been living in Mexico.
… It is clear that the low-key, slow-paced lifestyle of Mexico’s coastal communities – combined with the significant cost savings — is drawing U.S. citizens looking for a location to retire. Those numbers of Mexico-bound retirees will continue to rise, thanks to the number of U.S. baby boomers nearing retirement age. It’s not just U.S. retirees, either – the Mexican and Canadian population aged 50 and over is growing as well. By 2020, this age group will make up over 27 million individuals in Mexico, and 14 million individuals in Canada.28
- The impact of adverse media coverage focused on narco-violence in Mexico, which has reduced the number of Americans that are travelling to Mexican tourist destinations. Focus group research and recent studies in Mexico demonstrate that U.S. retirees travel to their ultimate retirement destination at least once before purchasing their property. Longer term, as many as 95-97% may recommend their choice to friends, encouraging them to retire in the same location. If U.S. travelers continue to perceive Mexico as a security risk, then this will negatively impact future home-buying decisions for years to come.
- The impact of the current economic recession on the income-earning capacity of pre-baby boomers and baby boomers and how such factors will impact their decision to retire abroad. In the U.S., net worth fell 45% between 2004-2009 among those aged 45-54, and 50% for those aged 55-64. 31
- The degree in which the U.S. real estate crisis inhibits pre-baby boomer and baby boomers from being able to sell their primary homes in the United States in order to purchase a home in Mexico. Today, many baby boomers have little or no equity in their homes; 30% of U.S. consumers aged 45-54 had to bring cash to a home closing. Between 72-79% of those in the bottom quintile of net wealth had to bring cash to a home closing, as compared to 27% in 2004.32
… respondents were clear in their affinity for the small towns of coastal Mexico, the interaction with local residents, and the culture and lifestyle. In fact, lifestyle was the leading factor in our respondents’ decision to select a Mexican coastal community as a retirement destination.
… This retiree profile has several lessons for Mexican coastal communities that are seeking to attract U.S. retirees as long-term residents. First, it is critical to keep Mexico’s coastal communities clean; almost 45% of our respondents said that a noticeable decline in environmental quality would cause them to consider moving again. 55% specifically mentioned that litter is the most unattractive part of their coastal lifestyle.
… Second, access to the beach – visually and physically – is important to a vast majority of our respondents (81% want ocean views and 23% said that blockage of coastal view corridors was an unattractive feature); while limits on access to public beaches stops retirees from their favorite activity: 70% list “walking the beach” as a key leisure activity.
… because many retirees recommend their retirement destination to family and friends, maintaining Mexico’s coastal lifestyle and high quality of life will also bring other residents through informal, social marketing. However, unplanned urban growth was considered unattractive for 35% of our respondents; overdevelopment was a problem for 26%. As such, thoughtful urban planning at the municipal level, attention to coastal view corridors, public transportation, and pollution should be emphasized over “sun and fun” tourism advertising. In that way, Mexico can attract long-term residents that are committed to their adopted community and its residents. In fact, some retirees in coastal communities are already expressing their opinions through meetings with municipal authorities in English, requesting improvements in water, sewer, and trash services.