 ©Manny Serrato Photography San Jose del Cabo in Baja California Sur Reader Question: I will be moving to Mexico (specifically the Cabo San Lucas Area) to retire in the next few years. I will be selling my business in the states and planning to live off the proceeds as well as my Social Security. I will have both a U.S. and foreign bank account, and plan to apply for Mexican residency. What should I do to prepare? ~Scott Hey Scott, glad you're thinking about taking the plunge!
American citizens must pay tax on world-wide income wherever they live, so you will have to continue your tax filings in Mexico, plus file an FBAR if you have a foreign bank account. We usually refer out to Taxes for Expats if you want tax advice. They specialize in these types of filings. Depending on which state you are living in now, you may want to consider transferring your official residency to FL or NV (both very tax-friendly and retiree-friendly states) before you officially leave the U.S. We always recommend setting up a mail forwarding service, Inc Paradise is the service that we use in NV. Make sure to drop a change of address form in the mail and do a USPS change of address online the day that you leave (and keep a copy of it). That's good evidence of a formal address change. If you want to get Mexican Residency, it's easy if you have a pension or some other sort of passive income source, because Mexico offers a "retiree visa" that is relatively easy to get. You have to actually start the process at a Mexican consulate before you leave, though, so we recommend getting in touch with a good Mexican immigration attorney to help with the paperwork. While not difficult, it is time consuming and it is easy to forget one necessary document that you might need, and that will derail the whole process, which is aggravating (and happened to us the first time we tried to get the ball rolling)! We always recommend EDUARDO CHAVEZ FREGOSO, ESQ. He is our immigration attorney and he also does real estate, which is important if you plan to buy a home in Mexico. Expect to pay between $750 and $1,000 USD (at the current exchange rate 20:1) for the attorney to file the necessary paperwork for you. The retiree visa is good for 4 years and will allow you to live indefinitely in Mexico and open a Mexican bank account. You can use your US driver's license in Mexico but you won't be able to use your car in Mexico for more than 180 days without bringing it back to the US. That's not a problem if you plan to go back and forth at least twice a year (people in Baja/Cabo tend to make frequent trips, but if you end up going somewhere like Quintana Roo/Cancun, you need to think about buying a car down there). After that, it's basically all about getting used to the culture and the climate, both of which are different but wonderful. English is widely spoken in Cabo and all over Baja so you won't have a difficult time. Enjoy your move, Mexico is a beautiful place for retirees! ~Manny Comments are closed.
|
No website or company has paid a fee to be mentioned in this blog. Any suggestions you see are based solely on our own experiences and personal preferences.
About UsJust a middle-class dad and mom with three young kids, looking to escape the rat race. This is our journey! If you have a question for us, please contact us directly using our email here.
Categories
All
Archives
March 2023
|
RSS Feed