This Is the Most Popular Country to Retire in for U.S. Expats — With Low Taxes, Affordable Housing, and Idyllic Weather

Among the benefits of retiring abroad are the change of scenery, the opportunity to experience new cultures, and the lower cost of living. And many Americans — about half a million, according to the Social Security Administration — choose to pack up and spend their golden years in a different country. 

Investopedia ranked the most popular countries for expats, and their data showed that most U.S. citizens chose to settle in our southern neighbor, Mexico, as it offers warm weather, affordable housing, a variety of small towns and cities, and convenient access to the U.S. 

Mexico also has a much lower cost of living — about 21 percent, with healthcare a whopping 60 percent cheaper than in our country.

Another benefit to moving south of the border is that housing in certain areas can also come with a much more affordable price tag. While homes in popular vacation destinations like the Riviera Maya and Cabo San Lucas may cost millions, in other areas like Aguascalientes, a city in Central Mexico, retirees need about $900 — and that number includes rent — to cover their monthly expenses. And in San Miguel de Allende, which is famous for its food scene, a couple could live on less than $2,000, according to a recent report by U.S. News.

Of course, retiring abroad also requires careful financial planning, including looking into that country’s income tax. (Moving abroad doesn’t exclude you from paying taxes in the U.S.) According to Investopedia, Mexico has the lowest personal income tax out of the ten most popular countries for expats — 3.7 percent, compared to the GDP. Property taxes are also just 0.3 percent.

For many, residing legally in Mexico is also an issue. American citizens can stay in the country for up to 180 days with no visa, and those who plan to live there full-time can apply for a Mexican Retirement Visa or Mexican Permanent Resident Card, which requires a monthly income of at least $1,415. Expats who reside in Mexico for five or more years are also eligible for citizenship. 

Canada and the United Kingdom are the second and third most popular countries for expats on Investopedia’s list. However, in Canada, housing prices are slightly higher than in the U.S., while in the U.K., home values are almost 20 percent lower. Healthcare costs are also much lower in Canada and the U.K. However, income tax in both countries is only slightly lower than in the U.S.

You can see the full list of countries on investopedia.com.