Moving to Ajijic/Chapala from Florida

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Hello, I just read your blog about moving to Mexico from Fl. It's funny but I will be able to retire next year and am wondering where to go since I cannot afford to retire here in CA. I was thinking of Florida but know I cannot afford that either. A friend mention to me just yesterday about San Miguel or where you are moving to. Can you tell me how SS or pensions are treated when you move to MEX?

Boricua1 wrote:

Can you tell me how SS or pensions are treated when you move to MEX?

I assume the your curious how you can get the monies from this pensions, right? Most use ATM's and withdraw funds from their bank in the US. Others use a transfer service to send money directly to their Mexican bank account. Caution with non-government pensions as many will not send funds to anywhere outside of the US, thus having a US bank for direct deposits is a good idea for this type of pension as well as for SS.  Most US banks prefer you to have an US address rather than a foreign one and it is getting more and more difficult because of IRS regulations to have a Mexican address as your address on your US bank account. So, many use a relative or friends address on the bank account. Large transfers of fund, over 10,000 usd or having balances over that amount in you Mexican bank need to be reported to the IRS.

To ease the complicated mess, the easiest path is to use your debit card to get funds.

Thank you for your response. I guess what I'm asking is more about taxing pensions than how to actually access the funds. In other words will my pension or 401 be taxed if I am living in Mexico. I know that while in CA., they don't tax social security checks, they DO tax all other pensions, etc. So, if I did move to Mexico would the government still tax any of this money. Thank you.

If your last residence would be California, they will continue to tax you. You would have to remove any references to California from yourself such as Drivers License, Voter Registration, Address in Bank account, etc.

Thank you very much. That is what I am trying to  avoid.I hope to get a very small pension and I can't afford to have it taxed if I want to live in San Miguel or elsewhere so I didn't know what to do. Now I know I have to get an address some other place before moving to Mexico where they don't tax pensions and then move to Mexico from there. 
Thank you-wish there were more people who knew about these things. MUAAAA....big kiss to you. 

Wow, that was a big one. You might look into getting a mailbox service in Texas where there are no taxes. You could join up with someone in SMA who has a mailbox there. That would get you an address out of California.

Have you looked into a resident visa for Mexico. The income requirement is high, so if you don't qualify for a visa, trips to the border every 180 days for a new FMM might be in order.

I'm new to this so please pardon any "dumb" questions.....first what is SMA? I am still employed here is CA. - and probably have to work this year here before I can make a move.
Do you mean that I have to be making a lot of money now, here, in order to get a resident visa for Mexico? Believe it or not I didn't know I would need a resident visa-just kinda thought I could move there. What is an FMM?
When should I begin to do all these things? You seem to know so much about all this. I'm wondering if it's better to speak on  the phone or something rather than this site about this???? I understand if you are uncomfortable speaking with a stranger over the phone-it's just that I really would like to do this by next year. I am 64 now and I feel like there is so much promise for me there, as I am bi-lingual, bi-cultural as well and you are the first person I've connected with who knows anything about this matter..
Either way, thank you so much for your help thus far.

Oops, sorry. SMA is San Miguel Allende. FMM is the 180 day tourist permit. Lots and lots of answers are to be found at Rolly Brooks

Boricua1 wrote:

Thank you very much. That is what I am trying to  avoid.I hope to get a very small pension and I can't afford to have it taxed if I want to live in San Miguel or elsewhere so I didn't know what to do. Now I know I have to get an address some other place before moving to Mexico where they don't tax pensions and then move to Mexico from there. 
Thank you-wish there were more people who knew about these things. MUAAAA....big kiss to you. 

I've lived in California in the past, and they don't give up easily, even if you move out of California you may still be taxed on pensions generated in California. I had to pay taxes on the 401K I liquidated after leaving there. I didn't have much in it so it was worth getting rid of it and being free of those taxes.

As for banking,Joaquinx is right using an ATM is the best answer. Mexico is more of a cash society anyway. The requirements for residency are around $2,500 a month. If your SSI and pension don't fall in that range you will have to stick with the 6 month visitor visa.

So, every 6 months while living in Mexico, I would apply for a tourist visa because my income would be less than $2, 500 ?  Are there ever any problems with being issued one of these visas? Because if I move there then I wouldn't have a place to return to.
Is there any way of getting around that matter of paying taxes on a small retirement fund I earned in CA? I also have a smaller one I earned in NJ which I have to begin to receive in September of this year, after I turn 65. Does CA. tax me on that one too?
Thank you so much for any advise.

Boricua1 wrote:

So, every 6 months while living in Mexico, I would apply for a tourist visa because my income would be less than $2, 500 ? .

Actually, you would have to leave the country and get a new one issued at the border. Or fly back to the US or somewhere out of the country and return getting a new FMM on your return flight.

So, every 6 months while living in Mexico, I would apply for a tourist visa because my income would be less than $2, 500 ?  Are there ever any problems with being issued one of these visas? Because if I move there then I wouldn't have a place to return to.
Is there any way of getting around that matter of paying taxes on a small retirement fund I earned in CA? I also have a smaller one I earned in NJ which I have to begin to receive in September of this year, after I turn 65. Does CA. tax me on that one too?
Thank you so much for any advise.

OMG, so every 6 months because I would get less than 2,500 per month I would have to leave the country?? I don't get it, the folks making more money could just stay there all comfy, cozy while those of us with less income would have to find the money to leave and come back every 6 months??? I also read on that other page you directed me to that there are all kinds of things going on with taking a car there as well???
What does expatriots status mean? Am I giving up my American rights if I move to Mexico??? OMG!

You dont have to give up any rights. Those with a Residencia Temporal and those with a Tourist Permit can bring their car, while those with a Residencia Permanente can not. I have a Permanente and own a car bought in Mexico. Many take the bus up to the border, do some shopping and return with a new Tourist Permit (FMM). You also go to Guatemala or Belize and do the same. An alternative would be to attend a school in Mexico. Many universities offer language classes where a grade is issued. With attendance there, you can get a student visa good for 1 year and renewable locally as long as youre a student in good standing.

A friend of mine went to the local university and studied French in order to get a student visa and remain in the country.

Boricua1 wrote:

OMG, so every 6 months because I would get less than 2,500 per month I would have to leave the country?? I don't get it, the folks making more money could just stay there all comfy, cozy while those of us with less income would have to find the money to leave and come back every 6 months??? I also read on that other page you directed me to that there are all kinds of things going on with taking a car there as well???
What does expatriots status mean? Am I giving up my American rights if I move to Mexico??? OMG!

I think taxes from your California account would just apply to that account. I don't know about New Jersey tax codes. You would have to consult your account administrator or that state for more information.
Anyone who HAS NOT applied for a permanent residency or one of the other visas would have to cross the border every 6 months on a tourist (FMM)  visa  no matter how much money they have coming in. The residency visas and some of the other visas have different time frames. For your purposes the tourist visa would be the only one that would apply for now. If you make enough money you can apply at the Mexican embassy  in your country for a resident visa ( you must do that in your country). You are a visitor, unless you renounce your citizenship you remain an American citizen. It might be a good idea for you to talk with the Mexican embassy there in California.

joaquinx wrote:

You dont have to give up any rights. Those with a Residencia Temporal and those with a Tourist Permit can bring their car, while those with a Residencia Permanente can not. I have a Permanente and own a car bought in Mexico. Many take the bus up to the border, do some shopping and return with a new Tourist Permit (FMM). You also go to Guatemala or Belize and do the same. An alternative would be to attend a school in Mexico. Many universities offer language classes where a grade is issued. With attendance there, you can get a student visa good for 1 year and renewable locally as long as youre a student in good standing.

A friend of mine went to the local university and studied French in order to get a student visa and remain in the country.

Last time I was at Belize both the Mx side and the Belize side said I had to be out of the country for AT LEAST 3 days, not the afternoon so that has changed. I was gone 2 days almost 3 and MX didn't want to give me more than a 30 day visa. $600 pesos smoothed that out, but you might want to rethink the just over the border for a day idea.

Thank you very much.

This certainly is more complicated than just "move to Mexico", it's a better, cheaper place to live. I never imagined it involved all of this.

My dear, you seem quite inexperienced with the world - the only place on the planet I know of - and I have been around - where Americans can arrive and stay for a year with no visa or whatever is the Republic of Georgia! And that is for a year, not forever. You can't just move to another country and install yourself there with no paperwork! Goodness! However, I don't understand this business about applying for a tourist visa. It is not necessary at all and maybe not possible. You simply get a generous 180 days when you arrive, whether by land or air. Then - as of two years ago anyway, when I was in that situation - you just have to go out, even for an hour. (I was on my way to Chetumal and was going to hop over to Belize; the immigration officer in Campeche assured me of this, have the laws changed with the three day thing?? I ended up going on to Guatemala so I didn't test that but she was definite.) That is the simplest way, and in any case after six months you might easily want to visit family, make some purchases, etc. Bringing a car is another kettle of fish and much more complicated and costly, I know from hearing stories. Buying something to putt around in there might be cheaper and simpler, and there is lots and lots of cheap public transportation. And, of course, you should VISIT- for a long time -  before making such a major decision - what if you don't like it? As for money transfers, there is an article in the NY Times today about new regulations - much more restrained - for transferring money to Mexico - so keep your money in the States and use the card!

Hola! You found a place? How cool. We would rather have you here in Merida!

Try Linea Peninsula out of Panama City. They can send the container over land to Lake Chapala.

Love to you both!

The 180 days is not a given, as I've found out it is entirely up to the Aduana officer. he has the power to say 180, 30 or nothing. If you fly in it's a pretty safe bet you will be granted 180 days. That's the simplest way, the steward hands you the paperwork which you fill out before you land and get it stamped by the aduans officer. Crossing the border is also not usually hard, but they have the authority to make it hard if they choose to.

As for the three day thing at the Belize border, they are rigidly fixed on that. The agent I dealt with even demanded to see that I pay for the hotel in advance, before he let me in .  They say they have noticed people just going through for the day, "  using Belize, just to renew their visa and they intend to put a stop to that"
The tourist rep helped all he could but the agent would not bend. As I understand it this mid level agent has been complained about yet he still controls things ( probably related to someone important ). There were people being allowed in to Belize for two days, but all of them were Hispanic. If you have Mx paperwork/ visa and look Latino give it a try it might work. With the increased gang violence in Guatemala and el Salvador, and Honduras I wouldn't go there
On returning to Mx ,the agent there noted I was a couple of hours short of three days and also made a big deal about it telling me I would have to go back to Belize, so I stood around for hours and then greased a palm and all was well again.

That is what I experienced, it's not just a rumor . I'm just passing the facts along. A lot of things can change in 2 years. I was told all I had to do was cross the border and come back, I booked a hotel for two days " to be safe" and  what I had been told was no longer true.

I don't know if I would consider myself "inexperienced with the world", perhaps just someone who has never retired before, or considered living anywhere else than the USA, for that matter. That is why I made a blog entry.......in order to glean information from those, like yourself, are more experienced and knowledgeable than myself on this particular issue. From my heart, I thank you and everyone else who has responded to my questions. Hopefully, one day, maybe I can likewise help you........you know a community of people helping one another.

I have friends who have used Lake Chapala Moving and friends who have used Strom-White Movers. Both have good reputations and both are home based at Lake Chapala. To learn all sorts of great information about Lake Chapala sign up for my blog/news letter at ChapalaClub.com
Tu amigo, Sid

I am not sure I understand the questions completely so let me answer in the following manner.

I understand Sam Miguel de Allende to be one of the most expensive cities to retire in Mexico.  If you're on a limited budget, you might try to find someone in San Miguel and ask specific questions.

Your would like to avoid CA state income tax.  Get a mailbox in a border city, preferably Texas, which has no income
tax.

Your pensions and Social Security will be subject to the same US Federal Income Tax no matter where you live.

Mexico does not tax US income for people in Temporary or Permanent Resident status.  Once your in Temporary status for 4 year,paying about $200 a year, you can convert to Permanent status for something under $400.  As Temporary you have to renew once a year, Permanent doesn't have to renew, just report change of address.  You can come in on a Tourist Card, but you can't bring any household effects.  You have to get a new Tourist Card every 6 months.  Your status in Mexico does not change how you US income (pensions and SS) is treated by the IRS.

It seems two questions have gotten mixed up together. Things do change, that is for sure - and it seems like sometimes one can have bad luck at the border. I am sure it depends partly on the personality of the authority and partly on how one is perceived. The fishing for baksheesh sport can be a factor too. I have left by land many times but I have always arrived by air, as far as I can recall, so I do not know how it would have worked for me. I think it is true that the surest way is to arrive by air. Ok, think about it: is it not a bit presumptious to think that one can just arrive in a foreign country and live there without asking if it is ok with them? I think we Americans tend to presume a lot, our country is so powerful. It is a kind of unconscious arrogance we carry. But would/could you live in someone's home without asking their permission? It is exactly the same situation. It is their country; we have no inherent rights to occupy it. It is also rather insulting to all the struggling people all over the world who suffer and die to get into another country, who risk and sometimes lose everything in order to change the country where they live?

$2500/mo. is more than enough to qualify for legal residence.  Check for current requirements with a Mexicab consulate.

The last figure I have seen in print was $2000 a month. I don't know if insurance is  required on top of that. I am sure it can be googled; in fact, I am going to do that right now!

Just googled it - mexperience sells a book but since things change...internationalliving says 2000 for temporary and around 2600 for permanent - The most interesting was a blog - cheapestdestinationsblog - by a writer recounting his personal experience, and also the fact that others have been treated differently, depending on the person with whom they are dealing. So the smartest step seems to be to ask at the consulate where you will be applying. There is nothing about insurance. In any case, the trend seems to be steeper and tighter requirements, but cheapest thinks that might backfire - After all, expats bringing in dollars is a valuable source of revenue.

Boricua1 wrote:

I'm new to this so please pardon any "dumb" questions.....first what is SMA? I am still employed here is CA. - and probably have to work this year here before I can make a move.
Do you mean that I have to be making a lot of money now, here, in order to get a resident visa for Mexico? Believe it or not I didn't know I would need a resident visa-just kinda thought I could move there. What is an FMM?
When should I begin to do all these things? You seem to know so much about all this. I'm wondering if it's better to speak on  the phone or something rather than this site about this???? I understand if you are uncomfortable speaking with a stranger over the phone-it's just that I really would like to do this by next year. I am 64 now and I feel like there is so much promise for me there, as I am bi-lingual, bi-cultural as well and you are the first person I've connected with who knows anything about this matter..
Either way, thank you so much for your help thus far.

If you are bilingual and bi-cultural and have a Mexican parent you can move to Mexico as a Mexican citizen with the proper documents and no need for an immigration document.

The reality was, in August 2013, that after 4 years as a temporary and meeting the requirements of a temporary, just the same source and amount of steady income was all that was needed.

You have to have a certain verifiable income (deposits on your bank statement or from your investment manager) to qualify to move to Mexico and to remain in Mexico as a residente temporal or residente permanente.  You won't know exactly what will be required until you go to a consulate and ask for a list of requirements.  Give yourself 6 months to complete all the requirements and get the visa that lets you travel to Mexico as a residente temporal (temporary resident.)  You may be able to do it in less time,  It depends on the consulate.  There is a website www.inm.gob.mx that is supposed to be the official source.  Last I looked it was hard to navigate and the English part was less helpful than I needed. 

There are 3 reasons why you might want to be a resident, temporary then permanent.
You are allowed to bring in household effects (furniture, appliances, electronics, etc.,) as a temporary you only have to renew once a year until you reach 4 years residence.
After 4 years you can change to permanent and don't have to renew ever again.

The alternative to residente is to get a tourist card which lets into Mexico for 6 months with just normal baggage.  I think the current fee is around $25US.  At the end of 6 months, you have to leave Mexico and get a new Tourist Card.  You can get a new Tourist Card the same day and in the same place as you turn in your old one usually.

The FMM is a card form that is used for several purposes, one of which is the Tourist Card.  It is also used for temporary and permanent residents to checkout with Mexican Immigration each time they leave the country and check back in when they return.

SMA is a common abbreviation for San Miguel de Allende,

Guess there are individual variations to the rule. Gudgrief, it was you who told us how to behave correctly, was it not? I am sure that your nice personality and good manners helped you get a good deal...Makes sense too, why should it be more if you are well behaved and show you can live on what is a prosperous income? However, laws can help weeding out...like trowels etc in a garden, I guess...

jeanfinney wrote:

Guess there are individual variations to the rule. Gudgrief, it was you who told us how to behave correctly, was it not? I am sure that your nice personality and good manners helped you get a good deal...Makes sense too, why should it be more if you are well behaved and show you can live on what is a prosperous income? However, laws can help weeding out...like trowels etc in a garden, I guess...

jeanfinney, there's only one thing certain dealing with INM or Customs for that matter.  Local offices have a great deal of autonomy and "procedures" and requirements can vary greatly from office to office and the people on duty at any given time.  That may be the truth behind the Marine held in prison in Mexico.  Wrong person at wrong time and maybe the Marine copped an attitude.  We'll never know.

I'm not sure what you meant by good deal.  That I got my document in the same week?  I'm certain that everyone else got the same treatment as long as they didn't go off on and agent.  What do you think would happen if some mouthed off at a US ICE agent?

I just flat don't understand, "why should it be more if you are well behaved and show you can live on what is a prosperous income?"

Hi - that was an awkward way of saying it but officially the permanent residence permit requires showing a higher level of income than the temporary residence. Why, I don't know, it does not seem logical, but I guess to them it is a more serious commitment on their part letting you stay, well, permanently. So they want to make sure the demander is solvent. That could be difficult for someone who could meet the temporary requirement but not the permanent. (Of course I don't know about your situation, it is not my business or the point here really.) I also meant that you seem to know how to conduct yourself correctly (it was a compliment) and courtesy can frequently ease the way; furthermore,  if someone is creating no problems and is living fine within the temporary limit, why not just let them go on as before, rather than raise the bar and ask for proof of a higher income? That was probably the attitude of the person who did not create any complications by allowing you to go on as before, simply changing the status from temporary to permanent. This was a reasonable action. From my research it also seems that consular offices outside of Mexico, in the States and Canada, also have varying responses to the same request, so one must check with them. If I understood correctly, now one must apply outside of Mexico for a temporary or permanent residence.

Actually, they didn't raise the bar.  I didn't have to meet the income requirements.  I WAS able to continue as I was income-wise and still get permanent status.

Technically, there are ways to get permanent status before completing 4 years as temporary.  In practice, you have to complete 1 year as temporary and meet other more rigorous requirements plus the higher income level.  If you enter as temporary and lived 4 years as temporary, you can get permanent at whatever income level you had during the 4 years.  At least that is the way it was in August 2013.

Logic really has nothing to do with immigration policy.  It just is.  Believe me it's a lot easier now that it was the first time I lived in Mexico in 1982-1985 and when I retired here in 2008.

I appreciate the compliment, it's just I didn't understand.  In the event my explanations don't make sense, the best I can suggest is find someone who speaks Spanish if you can to translate the INM website or go to a consulate and see if you can get a printed set of instructions starting with the application for a visa which is not really covered on the website.

OK. Rather complex, isn't it? Well, I am more in the category of those who would have to leave every six months since I don't have that income, which is more than sufficient for living simply in Mexico (outside of Mexico City of course, where rents are high, but I would not want to live there anyway.) Most people would simply say "you are lucky." However, so-called "luck" is often deserved. I believe that if you had been rude and impatient, for example, like some gringos, and/or you had behaved badly, like some expats, who drink too much in public or whatever, then you might not have had such "good luck." It speaks well for you.

Thank you gentlemen so much for any and all information you post. It really is helpful information for someone who hasn't the foggiest notion about how to do this. Basically, I just know that I cannot retire here in the US, that I am a fluent Spanish Speaker and I have my only 2 children here in CA. so I don't want to go to far from them. I will have less than $2000 a month to retire on and I just read from one of you kind people that SMA is one of the more expensive places to retire in. Does anyone have an idea of a less expensive place? Anywhere closer to the border, that is SAFE, has a large community of US retirees, and there is no shooting in the streets just for the fun of it. Trying to plan the rest of my life at this point seems overwhelming but I have been a single working parent all of my life and just never had the possibility to plan for the inevitable-retirement. Now, it is upon me and I am trying to make sense out of all the blogs that have been written so kindly, so see how to move forward with this in the year that I have left before I move.   
God bless you all for your comments.