Money & Policy

Is This the Best Place in the World to Retire?

Mexico's San Miguel offers sun, fun and affordability. It's worth considering for a second home, too.

Mexico is regarded as one of the best countries in the world for retirement. And San Miguel de Allende may be the best place to retire in Mexico.
When Americans and Canadians think of Mexico, they may think immediately of beaches. And beach resorts are fine for visiting. But for retirement — or for a second home for snowbirds — something different is likely to be more satisfying.
If you imagine “Mexico without the beaches,” you'll start to form an accurate mental picture of San Miguel, where my wife and I spend about half our time in retirement.

(MORE: How to Choose Your Best Place to Retire)

San Miguel's Many Charms

It's often said that visitors almost immediately either “get it” about the charms of this place, or they don't. We fell in love with San Miguel within 24 hours of our arrival for a 10-day vacation in 2005. Before we left, we had bought a home.

We love San Miguel's “eternal spring” climate, the bright colors, clear skies, flowers, birds, festivals and the marketplace. We keep coming back for more: Art (San Miguel has more than 100 galleries), architecture, culture, cobblestone streets, food, music, parades and parks.
And people. We have not found anywhere else in the world where people are so friendly and easy to get to know.
Affordable and safe, San Miguel somehow manages to run at a pace that's both invigorating and peaceful.

(MORE: The 4 Keys to Buying a Vacation Home)

A sophisticated city of about 80,000 people nestled 6,200 feet above sea level in the hills of Central Mexico, San Miguel is about 170 miles northwest of Mexico City. Roughly 10 percent of the population is made up of expats, mostly from the U.S. and Canada.

Do You Know the Way to San Miguel? 
While San Miguel doesn't have its own airport, it's easily accessible from international airports in Leon (a 90-minute van ride away) and Mexico City (about four hours by van, car or bus). If you're driving, it's roughly 10 hours from the U.S. border. The nearest ocean, incidentally, is several hundred miles away.
Looking for skyscrapers, stoplights and smoothly paved streets? Forget it.

Casinos, malls, chain stores and familiar restaurants? You're in the wrong place. (By law, franchises are prohibited from the city. The only exception is a Starbucks, which abuts the main town square and has a lovely private courtyard.)

However, you will find lots of sunshine, mild temperatures and not much rain.

(MORE: The Best Cities for Boomers to Pre-Retire)

Until this fall, San Miguel could boast of being a relatively undiscovered gem. That changed when Condé Nast readers identified it as the world's No. 1 most attractive city.
When you arrive, the first thing you're likely to notice is a skyline dominated by several 17th and 18th century churches. The city's well-preserved historic center is a world heritage site. Once you get into the city, you'll be struck by the narrow cobblestone streets that run in every direction — and the strange (by American standards) behavior of local drivers, who take turns at intersections, yielding to each other and to pedestrians.

A City for Walking 
San Miguel is a city for walkers. One of our favorite walks is through the city's large botanical garden, El Charco del Ingenio, said to have more species of cactuses and succulent plants than anywhere else in Mexico. Situated on a hill above the city's core, this park contains a bird sanctuary, a reservoir and a canyon into which a grand piano was once hoisted for an outdoor concert. At this garden, you'll also find a sweat lodge, dances, classes and seasonal ceremonies.
Although Spanish is the dominant language here, most English-speaking residents and visitors have little trouble getting by. Your experience will be enhanced, of course, if you know some Spanish and San Miguel has plenty of language courses designed for just that purpose.
Despite all the retirees, San Miguel's overall population is relatively young — about 40 percent are under age 15 and only about 6 percent are 65 and older. The U.S. population is high enough that San Miguel has its own U.S. consulate to provide notary and passport services and otherwise take care of ex-patriots.

Boosted by the GI Bill
San Miguel started seriously attracting Canadians and Americans shortly after World War II. Many were artists who fell in love with the natural beauty of the area and the friendly local people. The city got a big boost from the GI Bill, which helped former soldiers and sailors pay for their education at a local art institute.
A sort of countercultural atmosphere is still to be found here.
Local people obviously work hard at what they do. And yet, perhaps as much as anything else, San Miguel is a place for fun. (If you're a grouch, this city might not be your cup of tea.) The Mexican government recognizes 50 holidays in San Miguel, and there is always something to celebrate with parades, fireworks and music.
Among San Miguel's attributes that I listed above is safety. There is little violent crime in this city, and I feel safer here than I would in many U.S. cities. Good health care is readily available, at affordable prices (though not covered by Medicare).

A Reasonable Cost of Living 
I also mentioned affordability. While I know lots of people who live lavish lifestyles in San Miguel, I know others who live full lives on just their Social Security or on $2,500 a month. Here are what some things cost: 
  • While houses for sale range up to $12 million, recent listings were as low as $84,000. The average home sales price this year is $370,555. That will buy far more than the same amount in most large U.S. cities. Many homes are sold already furnished; if you share the seller's tastes, that can save you a lot of money.
  • Property taxes on a villa with pool might cost you $300 a year.
  • Cabs are plentiful, and you can go anywhere in the city for about $2.50. Although you can own a car or bring one from the states, it isn't necessary.
  • Expect an ample restaurant breakfast for three to cost about $15, including tip. Depending on your choices, dinner won't be more than twice that much, at least until you add the cost of alcohol.

No Natural Disasters Here
If you're looking for earthquakes, tornadoes, forest fires, scorching summers, frigid winters, hurricanes, high humidity, tsunamis or floods, San Miguel will disappoint you.
But if you can bring a sense of adventure and you want to be immersed in comfort and beauty, San Miguel de Allende could be for you. The best way to find out is to come for a visit. There are lots of hotels, bed-and-breakfasts and vacation rentals.
San Miguel has so many more attractions that I have created a page on my website that will lead you to much more than I can cover here. In addition, I've recorded a podcast with even more thoughts on San Miguel.
If you do come for a visit, I doubt you'll regret it. You might even fall in love with this place, as my wife and I did.
Paul Merriman is founder of Merriman Wealth Management, a Seattle-based investment advisory firm, and president of The Merriman Financial Education Foundation. Paul writes a weekly column for MarketWatch's The RetireMentors and records a weekly podcast, Sound InvestingHe has authored numerous books on investing including Financial Fitness Forever, Live It Up Without Outliving Your Money and the new How To Invest series available for free at PaulMerriman.com. Follow Paul on Twitter @SavvyInvestorPM.

Richard Buck contributed to this article. 

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