Can I live on my Social Security?

[V]

With hard times in the U.S. and many people approaching retirement with little left of their retirement funds after two major market meltdowns in only one decade, some have been asking this question about Mexico. There are already more than one million Americans living in Mexico, officially, and many more, unofficially.

So, could you reasonably expect to be able to live on Social Security, in Cancun, for example?

To come up with figures, it's necessary to make some assumptions about the life you would live here, and the income you would have. For this illustration, we will assume you are a single man, and have a monthly Social Security benefit the equivalent of 12,000 pesos. You also have some savings, back in the states, sufficient to qualify for an FM3, Visitante Rentista, based on financial self-sufficiency.

All costs, below, are by the month, and represent my estimate: other posters have actually lived on modest budgets, here, and will be able to tell me where I’ve gone wrong; or, where they think I should have allocated more money, if someone is to enjoy a reasonable quality of life, even if modest.

Rental of a small house or condo in the colonias: 2,500 pesos*;
Electricity, using a/c moderately, in summer, averaged annually: 200 pesos;
Gas, cooking at home a lot, gas water heating: 150 pesos;
Water/sewage: 55 pesos;
Garbage disposal: free, service of city;
Mobile phone, Telcel Amigo plan, moderate usage: 150 pesos;
Internet service, Cablemas package (internet, cable TV, telephone): 500 pesos;
Transportation, consisting of a taxi ride from the supermarket, once per week; using the buses four times per day; and one RT by taxi per week for convenience: 1,100 pesos;
Supermarket shopping, including food and household supplies, but not including large amounts of processed or canned foods or beverages: 1,600 pesos;
Bottled water for drinking: 250 pesos;
Meals out, occasional, local places only, 800 pesos;
Clothing, shoes: 400 pesos;
Haircuts: twice a month at 50 pesos, each: 100 pesos;
Health care and drugs: 500 pesos;
IMSS insurance: 280 pesos (paid in a lump sum of 3,200 pesos, annually)

There is no specific allowance for alcoholic beverages, nor smokes in this budget. Add for these, as required. There is also no allowance for travel. There is no allowance for entertainment, nor gifts for others for special occasions. There may also be some unavoidable expenses I’ve simply forgotten to include.

The total of expenses I did include is 8,585 pesos per month, leaving a surplus of 3,415 pesos which can be saved, and applied to any of those things I didn't include.

My guess is that, if we're talking about a woman, the expenses would be higher- so as to include a larger allowance for clothing, and an allowance for cosmetics and occasional trips to the beauty shop.
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*To get prices like these you may be renting, unfurnished. In that case, you will have set up costs for furniture, kitchen appliances and air conditioners, dishes, pots and pans, etc., which you could budget at 60,000 pesos, as a modest figure in keeping with the scheme I've presented.
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[Steve]

I think you've answered the question "is it possible?" I wonder how many "would want to" though.

A budget of 8,500 pesos a month ($700 USD) might be ok for a youngster starting out in the big bad world but for a pensioner I think there would be too many corners that had to be cut and sacrifices to be made for it to be an enjoyable experience.

Lets not beat about the bush, Cancun is not cheap any more. If you want to live in Cancun to the degree of comfort that most are accustomed to back home it's going to be a lot more expensive than the figures above.

I feel we could maintain the same standard of living we have in Cancun for less money, if we were to return to the UK.

[TomT]

You should also figure the costs of obtaining and maintaining and FM3 or FM2...or the travel costs required to leave the country and return for an FMT. If anyone plans on living here on Social Security, those costs are an essential part of the budget.

[V]

Good point, TomT, so we need to add 250 pesos per month to amortize that annual expense. Thanks for suggesting it.
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Of course, you're right Steve, this budget would produce a fairly austere lifestyle, but in the U.S. it would be impossible to duplicate even this modest lifestyle with the level of income I suggested in the example. Medical care, prescription medications, and medical insurance costs alone would destroy this budget, even for those 65 and over who are covered by Medicare.

The person I described would enjoy cable TV and internet service in his home, the convenience of mobile phones and- taking the city buses- could enjoy outings to the beaches. From the "surplus" I projected, he could buy himself a bike, just like the one I use for exercise, 950 pesos at Walmart! For less than the 800 pesos per month I allocated to meals out, he could have breakfast at Ambiance Kin Ha once a week, at 120 pesos, and still hit another, less expensive "local" place, once a week.

Using part of the projected surplus, and taking buses- using his INAPAM card for a 50% discount on ADO and UltraMar- he could enjoy day trips, and occasional overnights, to places nearby, like Isla Mujeres and Playa del Carmen.
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Looking over the budget I suggested, I find I spend more for rent, more on transportation, more on meals out and more for haircuts (Walmart). For the most part, though, the other numbers are just what I currently spend on the items listed.

It's always interesting when you start talking about living expenses, because they are so elastic, with some people spending large sums, others not so much. Gringation described her life and budget on another thread. She and her husband seemed to be enjoying life on about 13,500 pesos per month, while living in a more central location than I proposed in the example- so it can be done, it seems.

[Life_N_Cancun]

Could it be done.. yes.. assuming that you have no medical issues to speak of, almost always eat/cook at home, don't drink, don't get out much, and don't buy "things"... and even then its tight... Living without the A/C can be done but not comfortably for most.

Now if you're a retired couple both getting SS.. it would be a little easier..

[V]

Hi, Life, I wasn't proposing living without a/c: we don't. At present, I have at least one unit going 20 hours/day; at times, two units going simultaneously, yet our consumption peaks at 500 KWH/month- now, for instance. It drops to as little as 100 KWH/month during the cooler months, and we don't sit in the dark! That 200 pesos/month figure that I proposed was based on our experience: not consuming large amounts of electricity, we directly benefit from the subsidies the Mexican Government provides, which are designed to reward conservation of energy, and punish high consumption. The subsidy amounted to almost 3,000 pesos credited against what we owed over the last three billing periods, for example.* With charges for electricity being based on a sliding scale, with each KWH becoming progressively more expensive once you exceed certain levels- and with the government withdrawing all subsidies if you consistently exceed the limits they impose- electricity can become a big expense, here.

I also wasn't proposing doing without medical care; rather, having first dollar, comprehensive coverage through IMSS. This would mean you'd have to make yourself content with their provision of services, or spend just a little to supplement it with visits to private doctors, if you choose, or with drugs you prefer to the ones they may have available. But, IMSS coverage is comprehensive, and can include even such things as cardiac imaging, hemodialysis, and chemotherapy- all free, once you've satisfied the premium they charge, each year.

I don't smoke, so I can't comment on the cost of smokes, but you can get a decent bottle of Chilean wine for 59 pesos (Vina Maipo), and 69 pesos (Concha y Toro) at the supermarkets; and, Superior Beer is just 7 pesos a can, when you buy the "eight pack" at the supermarkets. Having a "night out" at La Taberna, and drinking four bottles of beer, would cost just under 100 pesos.

On the budget I proposed, a person would have to consciously consider the real value to him of any purchase, and reject some expenditures as just "not worth it." This would go for a lot of restaurant food, around here!

This same person would need to make the effort to find things to do that are free; for example, movie night out at the Universidad del Caribe, free, and open to the public, featuring foreign films. A half dozen different bus routes terminate right in front of the university, and run till 11 PM.

Now, if we were talking about a retired couple, some expenses would double- food, for example- and others would be more, such as transportation; but, if each of them had the equivalent of 12,000 pesos per month in Social Security benefits, they'd be in relative "high cotten", and could afford such things as an occasional trip abroad, in addition to more of everything else.
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*From November, I've received billings from the electric company for six months (that's three billing periods of two months, each). We were charged a total of 3,870 pesos but received a subsidy of 2,993 pesos, leaving a net we owed of 877 pesos. When various taxes were added, the total that we had to pay for the six months came to 1,019 pesos. We are now in the hottest months of the summer, and our bills will be larger, but so will the subsidies. We are currently using about 17 KWH/day of electricity.
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[Gringation]

I'm gonna have to agree with V on this one.

I've mentioned before that I live on around $10,000 pesos a month or so, and I live quite comfortably. I would even say my lifestyle here is of a higher quality than it would be with that money in the States. I know I go out a lot more than my friends my age (24) in the States, and my rental house is much better than any of their apartments (at least in terms of aesthetic and size) and costs less.

I think V's estimate is pretty good (except maybe the amount spent on phone cards each month), and I can vouch that with that kind of money, you can easily go out a few times a week. My spending money is in about the same range as V's estimate, I just pay $2000 pesos more in rent than he mentioned.

With that spending money, I go out to eat about 4 - 5 times a week, sometimes more, plus the occasional movie, bar, nightclub, etc. I also take taxis all the time, never buses, and I have 3 dogs to take care of.

Many retirees probably would be uncomfortable in my lifestyle, especially with all the differences in services and utilities, but that's part of moving to Mexico no matter how much money you spend.

So yes, you can live comfortably on that budget, depending on what your standards are, I guess.

[V]

Hi, Gringation, I'm not into high tech so I was content with a new Nokia mobile phone sold in their offices by Telcel, costing just 350 pesos.

I use the Amigo Plan, and always purchase 500 peso recharges: I do this because they then credit me with an additional 400 units of credit as a bonus!

Typically, I start each period with from 1,000 to 1,100 units of credit available, including what was still on the phone when I recharged.

Using my phone several times a day, this purchase seems to last about three months (with a 20 peso recharge in between, just to keep the period of validity on the credit from expiring: as you know, they just give you a two month validity, each time).

Many people use their phones more often than I do, or talk longer, so they may end up spending more, as you mentioned.

[Gringation]

V - the 350 peso cell phones are the best! All my friends have Blackberries that have to be replaced every 6 months. My cheap little Samsung has survived a cycle in the wash and has been dropped at least 30 times. Still going strong!! Best phone I ever had

[T.J.]

V, if you are not on a plan, I think this kicks in after one year of service, but you and others can check it out. Using the Amigo Card (Telcel) you can have them program in 5 numbers and each local call is only $1 Mxn. Maybe that has all changed as I have been on a plan for a couple of years, thanks to enjoying Blackberry service.

As to Cablemas, that cheap package does not include really high speed and only basic cable. I pay about $1,000 and have a jillion channels and adequate to my need high speed, a step or two above what the plan offers, but I DO NOT have the local phone service.

If you have a car, you can add about $500 per tank of gas, in my case, and back into the monthly cost based on your own car and the miles you drive. Mine is a gas hog and I fill it 3 times a month on average, for local use.

I don't figure out what my overall cost is, but cannot really disagree with any of your numbers. My water is about $50, electric $800 for 2 months with my a/c in high gear, gas is maybe a tank and a half per month on average at $200 per, bottled water is maybe $100 per month but I am only one person.

I own my place so there is only a minimal property tax per year and routine maintenance, neither of which is much.

Some say I live like a rock star but I am not broke yet. I would guess you could live pretty high on the hog for $2,500-$3,000 US per month.

[Gringation]

TJ - 3000 dollars a month of spending money... oh man I'd be living the LIFE. I could rent my dream house (already found it for 1300 dollars a month rent... a girl can dream, right?) then go on vacation every weekend! Ya'll would be invited to all my wild parties.

[V]

For some the cost of alcoholic beverages would need to be factored into any calculation of whether retiring here on Social Security would be doable- so here's some examples of some prices I've run across recently as well as what you could expect to pay normally:

Smirnov's Vodka- 1L 105 pesos at Chedraui (normally 123 pesos at Europa)

Superior Beer- ten cans for 48 pesos at Walmart's (normally sold in eight can lots at 57 pesos in the supermarkets)

My experience with buying wines that have been marked down has not been good so I'll just mention the regular prices for wines

For red wines Vina Maipo from Chile remains a good buy at 54-60 pesos per bottle: sold in many supermarkets in Cancun

White wine drinkers can find Concho y Toro- also from Chile- Savignion Blanc at 72 pesos in the supermarkets: it may represent the least expensive yet drinkable white wine available
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Europa- across from Walmart- seems to pretty consistently offer the better price on distilled liquors of all kinds but you can see bargains in the supermarkets occasionally as in the case of the Smirnov's at Chedraui this week

[Life_N_Cancun]

& needless to say the cost of drinking "out" will be many, many times higher...

[V]

That's certainly true Life: two for one deals offered at some bars-restaurants can help out a little but they're still making a nice profit on their drinks
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La Taberna consistently offers two for one drinks with beers costing about 48 pesos for two

Beer at the baseball games is 25 pesos

Los de Guanatos at the bull ring sells its beers for 20 pesos each
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Those who do most of their drinking in bars will find this can become a significant drag on the modest budget we've been looking at on this thread
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[matkirk]

La Taberna consistently offers two for one drinks with beers costing about 48 pesos for two

That's not a 2x1 deal - La Taberna just makes you drink two beers at a time for 48 pesos. If it is 2x1 then it's one of the most expensive places for 1 beer (48 pesos) in Cancun!

[Gringation]

Mat - pretty much every bar in Cancun does that.

My favorite is Planet Bowl... On the drink list they have a column with the normal prices, alongside ANOTHER column with the *more expensive* 2 for 1 price. WTF??

[matkirk]

Gringation - I disagree, most places I go to have the option to buy 1 beer for somewhere between 15 and 30 pesos - La Taberna as far as I can see doesn't have that option and would chrge you the 48 pesos and give you 2 beers even if you just wanted one - I might be wrong though.

[Gringation]

Mat - Sorry, I meant to say that when you see "2x1" advertised, it's rarely the case. Can't say I've ever seen anyone get 2 beers for 15 - 30 pesos anywhere, but I might be wrong too.

Anyone remember how much the 3 for 1 beers cost at Los Arcos?

[V]

La Taberna just makes you drink two beers at a time for 48 pesos.

Good point Matkirk!

In answer to your question Gringation I seem to remember Los Arcos charging 49 pesos for three beers so they are cheaper than La T

Lowest beer prices I've seen in cafes and restaurants around here is 15 pesos so it's still far cheaper to drink at home with your friends- especially if they do the Mexican thing Gringation has talked about and go out to buy more beer themselves after they've polished off everything you had on hand!

[Life_N_Cancun]

The whole "2x1" thing is just a mind game most times... you're paying the same or close to the same as individual beers would cost. It's the same mentality that make us more likely to buy something if its $99.99 instead of $100...

Gringation.. yeah gotta love that.. the places where "2x1" is actually "2x1.7" on the price list... course I guess "2x1" could mean they bring both at "1" time and have nothing to do with the price..

Now the thing that sold me on La Taberna is that they have cocktails at some reasonable prices and are also "2x1" although they keep creeping the prices up a few pesos ever few months so its loosing some of the value... BUT the one on Yaxcilian did just get some nice new pool tables so that will keep me going for now... If you goal in life is to get drunk, you can drink at home as V pointed out for very little, and there are places with "10 pesos" beer where you can get blasted.. but I think most of us have grown out of that....

[V]

If you goal in life is to get drunk, you can drink at home as V pointed out

It seems to me that drinking at home is not any more about getting drunk than drinking in bars is- unless perhaps you happen to live alone or have no friends willing to call on you

In Mexico more parties take place in people's homes than in bars- to the annoyance of some neighbors including me!

But the focus of this thread is whether it's possible to live on 12000 pesos per month and economizing on drink whether in bars or not- for those who choose to drink- is part of the equation
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Of perhaps greater importance than the cost of alcohol for retirees is the issue of cost and availability of medical care

IMSS remains one of the best bargains in medical care available to retirees anywhere- being both comprehensive and inexpensive at just 3200 pesos per year for those 60 and over

For a report of my own recent experiences using the system see-

Medical Care for Retirees in Cancun
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[V]

I mentioned renting a two bedroom apt for 2,500 pesos per month as part of a package that might allow you to live on social security here, but buying a modest priced place could put you in just as advantageous a spot and might, for some, represent a better way to go.

After considerable searching, we found a condo which was priced right for us, and well situated in the center of town, which has a condo fee smaller than the budget for rent that I suggested in the original post.

On the subject of cost of electricity, our bill for the last two months was 319 pesos, using two laptops much of the time, and all the usual home appliances plus a/c occasionally, for a few hours.

[Windknot]

I guess y'all are presuming that the SS retiree wants to live in Cancun. I presently live in Veracruz, and I know from experience, that our costs are similar......BUT ....an SS retiree can live like a king in other parts of Mexico, and still enjoy the diversity of culture not found NOB.

Unlike many of you who fell in love with Cancun and decided to live there, I have been to many many different cities and pueblos in Mexico where the people are friendly and there are no social hassles. Rent is like 3000 pesos a month for a 3 BR house....to buy the same is less than 500,000 pesos. Predial is always nothing, so no problem there. However, inland, there is no fideicomiso, and that could be significant for an SS pensioner.

It all depends on what you're after....sun and surf?....you have to pay for that. But inland, things are a whole lot different....and much cheaper.

[V]

Without having had the experience of many other Mexican cities, what Windknot has said seems true to me. Last year statistics were released that showed Cancun´s cost of living was 105% that of Mexico City.

[Brewster]

How would this compare to the cost of living in a place like Bucerias (North of Puerto Vallarta)?

We have friends that winter in that area.

I have also heard of an inland lake in the south where many Canadians and Americans retire. However, I think it is in a high altitude area with less than an ideal climate that gets quite cool in the evening.

We have thought of retiring in Mexico. The concept of owning property in a "foreign" country does concern us though. Not that Mexico is likely to become another Cuba but heck, you never know.

[V]

Hey, B., it's not Mexico's Law or stability that I'm concerned about at this point, it's U.S. law. See, for example,

U.S. Fideicomiso reporting

Further to the point, the U.S. refuses to extend extraterritorial benefits of its national health program for older Americans (Medicare), making it problematical for those with any health problems (and who doesn't have some, as they get older) to have adequate medical coverage- unless money is no object.

IMSS in Mexico is an alternative, for those who enroll before they are burdened with pre-existing conditions, but those who use it know that it has a lower "quality ceiling" than they might find back home.

[ChrisnCancun]

Originally Posted by Life_N_Cancun

BUT the one on Yaxcilian did just get some nice new pool tables so that will keep me going for now...

Whoa Whoa Wait a minute....did you say new pool tables? Last time I was in Cancun I had a very hard time finding a decent pool table. Are they 3 cushion tables or regular pocket coin op bar tables. Either way i will have to go check this place out. I will be there in 2 weeks, want to play a game? Pool is an addiction for me.... but a good one! Check out the links in my sig.

Seriously though Life_N_Cancun, if you would like to play while I am down there let me know.

Chris

[Windknot]

Brewster, you're thinking of Lake Chapala. It is essentially an ex-pat area, and you will pay the same price for a house there, as you would for a comparable one in the States. Other services are similarly priced. There is also Guadalajara and San Miguel (de Allende) as other examples. So if you would like to retire in "Little America," these would be your choices. But in none of these places, could you retire on V's 12,000 pesos a month, unless you had sufficient start-up capital to buy a home.

The climate is more "high desert," meaning that the days are hot, but drier than Cancun, and the nights are cool, but drier than Cancun. Less humidity means you do not feel the effects of heat and cold as much. So it is really quite comfortable in these areas...reminds me a little like So. California.

V, I was going to take exception to your 105% thing, and then I realized you were talking about just Cancun. But as of a few years ago, Quintana Roo was #18 most expensive of all the States in Mexico. (Yes, I found that hard to believe too, but I think a lot has to do with the fact that your IVA is 5% less than most States) DF was #1, and Veracruz was #3.(We have unusually high real estate prices here....both to rent and to own)

[KTDLP]

We just dramatically lowered our gas consumption by purchasing an energy saving gas water heater at Home Depot. We bought the model unit and got a huge discount on it. I don't know if it would make that much of a difference for a smaller place but we have four showers, six sinks, and a washing machine that use it. It is also so much more aesthetically pleasing and compact than it's gas guzzling cousin.

[V]

One of the good things about living here, aside from the very clean air, is that fruits and vegetables are usually available in good quantities and for prices that, more often than not, are very much lower than we would find at the same time of year in the states. Right now, the supermarkets are loaded with a wide choice of fruits and vegetables costing less than 10 pesos/kg, just about 40 US cents per pound.