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What kind of medical insurance is available—and how good is the medical care?
Medical care in the larger Mexican cities is comparable to care in the United States—at one-quarter the cost. That’s good, because Medicare pays for nada outside the United States. Foreign residents may opt to sign up for the Instituto Mexicano del Seguro Social plan, which covers progressively more over a three-year break-in period, costs only a few hundred dollars a year, and is renewable for life. It has no age restrictions, but it won’t cover people with chronic conditions such as diabetes or heart disease. Relatively inexpensive private Mexican or international medical coverage is also available. Because of the reasonable costs, many people pay in full for office visits while holding insurance in reserve for catastrophic situations. Finally, it’s a good idea to keep Medicare Part B coverage in effect so that you can return to the United States in case of a major medical problem. For a few hundred dollars per year, airlift insurance provides a safe and comfortable way back to the United States.
 

What are the rules for buying property in Mexico?
Anyone, even someone in Mexico on a tourist visa, may buy property outright as long as the real estate is not inside the Restricted Zone (within 50 kilometers—about 31 miles—of the ocean, or 100 kilometers—about 62 miles—from a border). What you’ll need is a permit from the Ministry of Foreign Affairs. But otherwise, buying a house in Guadalajara, Chapala/Ajijic, or San Miguel de Allende simply requires following the normal procedures for Mexican real estate transactions, which you can—and should—learn about by hiring a Mexican notario (a lawyer who is qualified to monitor real estate transactions). Title insurance is available and is strongly recommended. In order to buy on the coast, such as in San Pancho or Sayulita, a foreign resident must set up a trust through a bank, which becomes the owner of record. The trust beneficiary (the buyer) has all the rights to “use, enjoy, and sell” the property, including the right to take the profit on a property whose value increases, subject to capital gains taxes.

What sort of taxes would I have to pay there?
The IRS requires every U.S. citizen to pay tax on income, regardless of where that money is earned or where the citizen resides. If you live in Mexico 183 days of the year, you are also subject to Mexican taxation. U.S. taxpayers who meet certain residency criteria may qualify to exclude up to $80,000 of foreign earnings from U.S. taxes and may take a credit or a deduction for taxes paid to the Mexican government. For more information, download IRS Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad (PDF), or obtain it by calling 800-TAX-FORM (800-829-3676). Property taxes vary by location in Mexico, just as in the United States, but they are much lower overall. A $300,000 house in San Miguel de Allende may have an annual tax bill as low as $200 to $300.

How do I get my Social Security checks?
According to the Social Security Administration, most get their Social Security checks through the mail, although service is unreliable and theft is not uncommon. Some use direct deposit to an American bank. (You can then access your money through an ATM. However, many long-term residents open an account at a Mexican bank and deposit checks written against their American funds. Caveat: it takes 30 to 90 days for the U.S. checks to clear.) A handful have direct deposit to a Mexican bank. Currently, the U.S. Embassy is working with Mexican banks to make direct deposit more widely available. For more information, go to the Social Security website  or phone your local Social Security office.

Originally published in the March-April 2004 issue of AARP The Magazine