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Surge in baby boomers retiring to Mexico

Posted: 9:44 PM, Jun 14, 2019
Updated: 2019-06-15 01:30:59-04
Travel warning for popular Mexico destinations

It's a different type of "surge" at the border, one that may not be as visible, but it's been happening for the last few years.

We are talking about a record number of U.S. citizens who are moving south of the border to retire.

This reverse migration trend is very real, and it's booming with more than one million American citizens estimated to be living in Mexico. Cost of living and climate are listed as the top two reasons for this migration. Mexico has a visa for such people, the "residente temporal," which targets people who do not work in Mexico and are economically self-sufficient.

Jamie and Paige Lopez are among these ex-pats who sold their home in Arizona and have now re-settled in Rosarito Beach, Mexico, just about 30 miles away from the San Diego border.

"We live in a gated community. We bought a house that has three bedrooms, 2.5 baths, and an ocean view," said Lopez.

Living on a retirement income, couples who have made this big move know they could never afford this lifestyle here in the United States.

"I think a comparable place in San Diego would be like in the million dollar range," said Lopez.

"You can find beachfront property in Mexico for a fraction of that price," said Steve Schwab, founder of Casago, a property management company in the United States.

Couples ABC15 spoke to said the more off the beaten path you go, the cheaper the property.

Fred and Cindy Ouellette, a Texas couple who now live in a small town a few blocks away from the beach, are renting a one bedroom apartment for $150 a month. They now run a popular YouTube blog called "Retire in Mexico" to talk about their big move, showcase their adventures, and share advice with others who may be considering the same.

Ouellette said they learned that you don't necessarily have to speak Spanish to live in Mexico. Their move stemmed from the cost of life issues. Ouellette said in the U.S. with a combined retirement income of less than $2,000; they were on the verge of poverty. In Mexico, they are living comfortably with money to spare.

In fact, the cost of living is the biggest draw for retirees. According to a recent report by the Stanford Center on Longevity, U.S. baby boomers hold less wealth, are deeper in debt, and will face higher expenses than retirees a decade older than them.

Before making the big move, though, consider this; any big move comes with significant life changes. There are some things you really need to think about.

"After about ten years, 50 percent of ex-pats move back because of health reasons, so if you have an emergency, how do you get back? What is your plan?" asked Schwab.

The Lopez's said they chose to live in a community that is close to the border for that very reason.

"We both are on Medicare, Jamie is on VA. We do cross the line to see our doctors," said Paige Lopez.

Just like anywhere else in the world, experts advise you watch out for travel, moving, and property scams.

"Don't go quickly running into the night because the beach is pretty," warned Schwab.

Most of the scams appear to be no different than scams here in the United States, for instance, don't fall for a smooth-talking salesperson and buy or rent a property without going to see it in person first.

"Try it before you buy it," said Schwab.

Experts advise you go live there for a couple of months, rent a place, and see if the lifestyle is really for you before you start shelling out all of that cash.

Make sure you find out if a Homeowners Association runs the property and find out what the rules are, so there are no surprises.

The Mexican Constitution had previously banned foreign nationals from owning property within restricted border zones. That was intended to protect Mexican soil from foreign invasion, but the Foreign Investment Law of 1973 was a constitutional amendment which changed this, allowing foreigners to purchase real estate, except inside a restricted zone which is 32 miles from the coastline and 64 miles from an international border.

The fideicomiso, which is a bank trust, acts as a trustee by holding the trust deed for the purchaser who is the beneficiary of the trust in these cases. The beneficiary retains all legal rights of ownership and may sell, rent, or pass the property on to their heirs at their will.

Lopez advised those who are seeking to purchase a property make sure the title of the property has no liens attached to it as well.

As for safety and security, Americans ABC15 Arizona spoke to said they felt very safe in Mexico. Schwab said he had experienced more crime in the U.S. than on any trip to Mexico.

The Lopez family said they felt very safe in their community as well.

"We do have 24-hour security at the front gate and security guards that walk around neighborhoods," said Paige Lopez. She said the worst thing she had heard about was someone's potted plant being stolen from outside their home.

Jamie Lopez said they took the same precautions they would have had they lived in Arizona, like not keeping their doors unlocked. Schwab said those out seeking trouble might find it, just as they would in the U.S.

"Don't check your brain in at the border. Use the same common sense you would anywhere," said Schwab.

As for how Americans are treated in Mexico, U.S. citizens ABC15 spoke to said they were welcomed into their communities with open arms. The local government recognized the ex-pats boosted the local economies.

Lopez said many retired Americans were active in their community charities. Some worked at local orphanages; others helped raise scholarship money for Mexican students.

As with any big decision such as a property purchase, make sure you consult with an attorney or real estate expert for advice and suggestions before making any big moves.