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Retiring in two years and moving to Mexico
Old 06-26-2009, 03:03 PM   #1
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Retiring in two years and moving to Mexico

Hi, my name is Ron. I am 57 1/2 and plan to retire in 2011 - a bit contingent on no further big losses in asset values, particularly in housing in the Portland, Oregon area. I work for an entity that is covered by the Oregon Public Employees Retirement System.

My employer has an early retirement program - it is in our union contract, that would provide a $400 stipend in addition to my defined benefit pension - until I turn 62, and provide an amount for health insurance equal to the current employee + 1 benefit amount until I am 65.

We are in the many small pots of money and we won't starve plan . In addition to my defined benefit pension, which will start at ~ $1000 a month, my spouse is vested in two defined benefit pensions, one of which she can start taking at the time we retire ($400 a month).

We also currently have a defined contribution component to our public pension plan. Our employers put an amount equal to 6% of our gross pay into "Individual Account Plans" that are managed by the Oregon Investment Council. We can keep the money in there when we retire, take it in pay-outs of various lengths, or roll it over into our IRA's. We each have small IRA's (less than 50k each after last year) from previous employer plans that we rolled over and we participate in the Oregon Savings Growth Plan, a 457 plan similar to the federal Thrift Savings Plan.

We'll use some of those assets, and proceeds from the sale of our house, to supplement the initial pensions until 2 1/2 years later I start taking Social Security, at which point our expenses will be easily covered.

That is the plan anyway. I grew up in Latin America and we have been traveling to Mexico for 6 years. We have the starts of community there. I speak the language well enough to be comfortable and my spouse is studying it. We intend to start in Merida, a city of near one million in the Yucatan Peninsula. We have met people living there who say they are doing very well on $2,500 a month (and some on less).
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Old 06-26-2009, 05:36 PM   #2
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Originally Posted by rnsmth View Post
Hi, my name is Ron. I am 57 1/2 and plan to retire in 2011 - a bit contingent on no further big losses in asset values, particularly in housing in the Portland, Oregon area. I work for an entity that is covered by the Oregon Public Employees Retirement System.

My employer has an early retirement program - it is in our union contract, that would provide a $400 stipend in addition to my defined benefit pension - until I turn 62, and provide an amount for health insurance equal to the current employee + 1 benefit amount until I am 65.

We are in the many small pots of money and we won't starve plan . In addition to my defined benefit pension, which will start at ~ $1000 a month, my spouse is vested in two defined benefit pensions, one of which she can start taking at the time we retire ($400 a month).

We also currently have a defined contribution component to our public pension plan. Our employers put an amount equal to 6% of our gross pay into "Individual Account Plans" that are managed by the Oregon Investment Council. We can keep the money in there when we retire, take it in pay-outs of various lengths, or roll it over into our IRA's. We each have small IRA's (less than 50k each after last year) from previous employer plans that we rolled over and we participate in the Oregon Savings Growth Plan, a 457 plan similar to the federal Thrift Savings Plan.

We'll use some of those assets, and proceeds from the sale of our house, to supplement the initial pensions until 2 1/2 years later I start taking Social Security, at which point our expenses will be easily covered.

That is the plan anyway. I grew up in Latin America and we have been traveling to Mexico for 6 years. We have the starts of community there. I speak the language well enough to be comfortable and my spouse is studying it. We intend to start in Merida, a city of near one million in the Yucatan Peninsula. We have met people living there who say they are doing very well on $2,500 a month (and some on less).
Welcome to the board, Ron. Regarding your concern about housing price declines in Portland, I suppose you could start trying to sell now, and live in an apartment for the last few years until you retire. I'd guess you will not be planning to move a whole houseful of stuff down there anyway?

Have you spent some of this 6 years in Mérida? I ask because I found a language school there that appealed to me, and a businessmen's extended stay hotel quite nearby that seems cheap enough, with AC and what appear to be reasonable amenities. I saw a really good Mexican movie-I forget the name right now-about two women who were on the lam from one of their boyfriends I think. Anyway, they spent some time in Mérida and it looked nice. Kind of reminded me of New Orleans about 50 or 60 years ago!

I prefer big cities to towns or isolated beaches. Please tell us a little about the city, and also the type of life your friends lead there.

Ha
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Old 06-26-2009, 07:14 PM   #3
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Welcome to the board, Ron. Regarding your concern about housing price declines in Portland, I suppose you could start trying to sell now, and live in an apartment for the last few years until you retire. I'd guess you will not be planning to move a whole houseful of stuff down there anyway?
We like our little home, and I do not think we will be putting on the market now - if we are not there yet, we are probably within a year of the bottom of real estate prices, I think. We plan to put it on the market in the Spring of 2011.

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Have you spent some of this 6 years in Mérida? I ask because I found a language school there that appealed to me, and a businessmen's extended stay hotel quite nearby that seems cheap enough, with AC and what appear to be reasonable amenities. I saw a really good Mexican movie-I forget the name right now-about two women who were on the lam from one of their boyfriends I think. Anyway, they spent some time in Mérida and it looked nice. Kind of reminded me of New Orleans about 50 or 60 years ago!

I prefer big cities to towns or isolated beaches. Please tell us a little about the city, and also the type of life your friends lead there.

Ha
We have traveled to Mérida and/or the Yucatán Peninsula 5 times over the past 6 years. We have also visited the Lake Chapala area, Guadalajara, San Miguel de Allende, Leon, Guanajuato and Dolores Hidalgo.

We think Mérida is a wonderful city. There is abundant culture - Symphony, theatre, dance, public culture in the parks several nights and days a week, postsecondary education, a first-rate medical infrastructure and it is in the middle of Mayan country.

There are a variety of blogs by people we know down there. Are there any rules on this forum about posting links to those? They would likely be the best way to discover how retired folks live down there.

We like the Luz en Yucatan hotel there. It is a few blocks from the main square, and 1/2 a block from the Parque Santa Lucia where there is salsa dancing every Sunday afternoon and cultural performances on weeknight each week.

Well, that is a start to answering your questions. I need to go prepare supper now.
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Old 06-27-2009, 10:56 AM   #4
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Another thing that differentiates USA and Spain is that we seldom move to another town/area once we ER or retire. Must be another cultural thing. Or maybe we are too old for that
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Old 06-27-2009, 01:00 PM   #5
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Another thing that differentiates USA and Spain is that we seldom move to another town/area once we ER or retire. Must be another cultural thing. Or maybe we are too old for that
Maybe you are already in "the other place"? I saw a recent article about British pensioners retiring in the south of Spain for the weather. They have been hurt by the GBP/Euro exchange rate to the tune of 30% less buying power now.

Plus the US has climates that vary greatly. Take winter in many northern states (winter temps average below 10-20 degrees F) vs. winter in Miami, Florida (temps average 70 degrees) for example. No wonder people want to move when they aren't tied to one place because of a job!
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Old 06-27-2009, 02:43 PM   #6
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I have been watching the Portland RE market as that is where husband and I expect to return after our home near Seattle sells. It is my observation that inexpensive homes in good neighborhoods are selling. It looks to me that at best values will remain flat for homes less than the median price and will probably decrease in the upper end.

It is my observation that costs of living (excluding housing cost) are more driven by lifestyle than location. I looked at Mexico several years ago and found that once I factored in travel to see the grandchildren living in Mexico was no bargain.
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Old 06-27-2009, 03:31 PM   #7
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I have been watching the Portland RE market as that is where husband and I expect to return after our home near Seattle sells. It is my observation that inexpensive homes in good neighborhoods are selling. It looks to me that at best values will remain flat for homes less than the median price and will probably decrease in the upper end.

It is my observation that costs of living (excluding housing cost) are more driven by lifestyle than location. I looked at Mexico several years ago and found that once I factored in travel to see the grandchildren living in Mexico was no bargain.

I think you are right on both counts - in regard to the Portland RE market and on the point that costs are driven by lifestyle choices. Generally though, many parts of life (housing, medical care and insurance, food costs, household help, entertainment, dining out, travel), are less expensive in Mexico - at least they have been in our extensive investigations over the past few years.

The evidence supporting your statement is that there are ex-pat retirees who live very well on a couple of thousand dollars a months and others who struggle on twice that amount.
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Old 06-27-2009, 03:47 PM   #8
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When I was looking at the Mexico option there was a health insurance program that would work for ex-pats. You might consider a medical evacuation rider in case local care wasn't appropriate.

Were I you I would rent in Mexico for several years.

No time like now to start thinning out the stuff squirreled away in the attic (that is what we are doing) ... as you know Portland has GREAT garage sales.

Our home just went on the market. We don't really need to sell but would like to be closer to the grandchildren. If we don't find a buyer in the next few months we will be better prepared for the move when that day comes.
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Old 06-27-2009, 04:01 PM   #9
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I feel that the best reason to go to a foreign country is that you think you would enjoy it more. In many ways America has become a pita- at my age it is hard to really care about separating household waste into 4 categories, amending the boundries of said categories everytime the city decides to, trying to keep track of what days each typle of trash is picked up, etc., etc. Add to that listening to incredibly boring holy pronouncements by enthusiasts of this system.

Mexico was definitely different when I spent a lot of time there; and I would guess that it still is. I remember once going down some dirt track in Sonora where an old man was broken down in the middle of the track. I saw his tools and his repair. I must have said some typicallly overwrought anglo thing like "will this really work?" He said, "Se sirve, seńor, se sirve."

An advantage of a poor country is that one guy's garbage is another guys hog feed; one guys trash is another guy's building materials.

It has probably been thirty years but I still remember that when I get all uptight and proper about whatever I am trying to do.

Ha
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Old 06-27-2009, 04:06 PM   #10
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It is my observation that costs of living (excluding housing cost) are more driven by lifestyle than location. I looked at Mexico several years ago and found that once I factored in travel to see the grandchildren living in Mexico was no bargain.
That's probably true. Certain things cost the same or more in MX (appliances, electronics, cars). Some things could cost more or less or the same (housing being one, particularly if you are "picky" about what you require). Foodstuffs, dining out, bar hopping, nightclubs, etc all seemed to be much cheaper in MX. Some US toiletries and manufactured products were more in MX. Domestic help (nanny, gardener, maid, cook) is much much cheaper in MX. Public transit (city buses, taxis, long distance buses) also much cheaper in MX. But frequent flights stateside and costs to get to/from the airport, plus accomodations in the US could easily counter many of the other cost savings. Also, anything that isn't commonly available in MX may be very expensive if you have to order it and have it shipped I would assume.
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Old 06-27-2009, 07:11 PM   #11
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Yikes! I've been reading some of those Mérida blogs. Can we say hot? LIke 113?

Sounds like a winter only destination for me.

Ha
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Old 06-27-2009, 08:47 PM   #12
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Yeah, ha.

I agree. From what I have read, Merida is everything the OP said it is, but it is a hot as hell. It has been hit with a murderous hurricane in the last couple of years, too. Please be aware.

Rent, rent, rent, and live there for a year before any financial commitment.

Good luck, amigo. I may not be too far behind you.

Cheers,

Gypsy
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Old 06-27-2009, 08:48 PM   #13
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Yikes! I've been reading some of those Mérida blogs. Can we say hot? LIke 113?
Just use a Celsius thermometer. Sounds much better when you say it is in the 40's.

The cerveza is close to 0 degrees down there.
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Old 06-27-2009, 09:06 PM   #14
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Yeah, ha.

I agree. From what I have read, Merida is everything the OP said it is, but it is a hot as hell. It has been hit with a murderous hurricane in the last couple of years, too. Please be aware.

Rent, rent, rent, and live there for a year before any financial commitment.

Good luck, amigo. I may not be too far behind you.

Cheers,

Gypsy
Not in the last couple of years. Isidore was in 2002.

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Hurricane Isidore was one of only four storms to hit the north side of the Yucatán since records have been kept. It was the first tropical cyclone to hit the area since Tropical Depression Greta in 1970, the first tropical storm since 1935, the first hurricane since 1888, and only major hurricane to ever hit the area.[1]
Hurricane Isidore - Wikipedia, the free encyclopedia

The Caribbean side gets hit more often, and I have friends there who have been through several hurricanes in past few years.

It is hot for a few months a year

Mexico is a culture where long-term rental is more common than in the USA, though many people do own homes.

We view it as a starting place. We may be there a long time. My experience of living in South America, the US midwest and the Pacific Northwest is that one acclimates within a couple of years to whatever climate one is in. I think that is true for most people, but not all. After a couple of years in the Yucatan, people are reaching for their jackets when it hits 65 degrees in the morning
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Old 06-28-2009, 10:13 AM   #15
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We view it as a starting place. We may be there a long time. My experience of living in South America, the US midwest and the Pacific Northwest is that one acclimates within a couple of years to whatever climate one is in. I think that is true for most people, but not all. After a couple of years in the Yucatan, people are reaching for their jackets when it hits 65 degrees in the morning
I suppose. But anything above 55 is tee-shirt weather for me, so I have a long way to go to get to 113! As for centigrade, unfortunately I remember walking down Robson St in Vancouver feeling hot and sweaty and looking up at a bank thermometer which said 29. So I think the 40+ in Mérida might be a "don't venture beyond the AC today" message for me.

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Old 06-28-2009, 12:34 PM   #16
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Guanajuato, on the other hand, has summer highs in the mid-80's and very low humidity. After 50 years of Texas summers I've had it with 100+ for days on end.
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Old 06-28-2009, 01:49 PM   #17
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I suppose. But anything above 55 is tee-shirt weather for me, so I have a long way to go to get to 113! As for centigrade, unfortunately I remember walking down Robson St in Vancouver feeling hot and sweaty and looking up at a bank thermometer which said 29. So I think the 40+ in Mérida might be a "don't venture beyond the AC today" message for me.

Ha
Anything below 65 is flannel shirt weather for me

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Guanajuato, on the other hand, has summer highs in the mid-80's and very low humidity. After 50 years of Texas summers I've had it with 100+ for days on end.
Guanajuato is lovely. It is our favorite non-coastal city in Mexico. The steps on the left side of the photo lead to the University of Guanajuato, one of the oldest institutions of higher education in the hemisphere.

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Old 06-28-2009, 07:11 PM   #18
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Ah, Guanajuato - we were there May '08 - absolutely loved it.

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Guanajuato is lovely. It is our favorite non-coastal city in Mexico. The steps on the left side of the photo lead to the University of Guanajuato, one of the oldest institutions of higher education in the hemisphere.

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Old 06-28-2009, 09:33 PM   #19
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Ha, I wear polo shirts year-round here in Cowtown, Alberta. Gets down to -40 from time to time. (No, then I wear something over the polos.)

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Guanajuato, on the other hand, has summer highs in the mid-80's and very low humidity. After 50 years of Texas summers I've had it with 100+ for days on end.
Glenn, we also lived in Houston, Red Stick LA, and central FL. Also the US mid-west (gets bloody hot there, too).

I am developing a taste for shirt-sleeve weather. Without arctic gear over it.
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Old 06-28-2009, 09:36 PM   #20
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rnsmth,

What do you think of Jalapa? My sources tell me that it is very much like Portland in weather. Also a university town and has a cafe society. Few gringos, tho.
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