Retirement: Top 10 Reasons to Consider Oaxaca

By Alvin Starkman, M.A., J.D.

Americans and Canadians are increasingly seeking early retirement destinations in the state of Oaxaca. Not wanting to be left in the poor house at age 70, they try to hedge their bets. Expatriates have selected predominantly Oaxaca de Juárez, the state capital, or beach communities such as Huatulco and Puerto Escondido.   True, in our lifetimes we will not likely be subject to anything like the 2008-09 financial crisis that left many with a fraction of what they thought would be their 401K, IRA, or RRSP nest eggs. But global instability is now a fact of life. 

While moving to southern Mexico won’t insulate investments, it does make whatever you have last significantly longer; much more so than relocating to an expat community in San Miguel de Allende, Ajijic or Lake Chapala, where the cost of living can approximate parts of the US and Canada. 

A good rule of thumb for middle-class visitors to Oaxaca considering a permanent move is to anticipate a cost of living approximating half of what it was back home. You shouldn’t miss a beat. However, one can get by for considerably less without giving up too much. Some living in the state scrape by on modest American pensions, on a shoestring budget, yet still lead a more pleasant lifestyle than would have been the case remaining in the US or other first world countries. Upon turning 60, your status in Mexico changes: taxes on your principal residence go down by 50%, as does first class bus fare, with additional incentives such as discounts on domestic airfare, free entry into archaeological sites and cinema, and so (on all figures are in US dollars). 

But Oaxaca offers much more than cost of living.  This is a list of the top ten other reasons to consider the state for retirement.

1. Healthcare.  Mexico has universal healthcare. For poor Mexicans, it’s free.  For resident senior expats, a couple pays less than $1000 annually for full coverage in the Mexican national healthcare insurance plan (IMSS); family doctor and specialist visits, surgeries, lab tests, emergency treatment, medication, and all the rest. But you also have the option to mix and match, that is, to elect affordable private care for some medical needs.  The state has a reputation for reasonably priced comprehensive first-rate dental care as well.  

2. Language. You can “get by” without learning Spanish, as is the case in foreigner havens elsewhere in the country, but you will enrich your life by taking private or group classes, thereby being able to integrate into the broader urban Oaxacan communities, and/or indigenous village life. Doing so is much more difficult in other parts of the country. Here, it’s easy. 

3.  Climate.  Oaxaca boasts the greatest diversity of climatic zones of any Mexican state, ranging from cool lush green mountain villages, to arid desert regions, to hot humid beach resorts, and everything in between.

4.  Travel Within. The state boasts a network of quality highways, secondary roads, and a super highway toll system, enabling you to visit virtually every region relatively quickly, and safely; by private car, the ADO bus system, or touring van. Regional airlines enable you to get from the state capital to the beach in 35 minutes.

5.  International Travel. The toll road system enables you to drive all the way from Oaxaca to the US border in a day, albeit a long one. However, we now have non-stop flights to Dallas, Tijuana and Houston, making for fast efficient travel to the US, with a single connection into Canada (seasonally non-stop). 

6. Earning Income and/or Helping Others. While expats must not take work away from Mexicans, it’s fairly easy to obtain federal permission to work in the country. In this era of Internet technology, you can work remotely.  But there are always opportunities in the local service sector (i.e., guides and lodging rentals), retail, and the export business given the rich diversity of affordable, quality handicrafts. You can help Oaxaca’s less fortunate in the state through devoting your time and energy by volunteering with charitable organizations; their missions include education, health improvement, or amelioration of conditions in lot local communities, families and individuals. 

7.  Access to First World Goods and Services. You can get virtually everything you need in order to have the comforts of home, given Sam’s Club, Walmart,, (like eBay), first world supermarket chains, and specialty stores. There are gyms, private swim clubs, hiking and biking trails; you can trade to build or fix anything and everything. Learn to salsa, to cook, to garden, to paint or draw, to spin pottery, to horseback ride. 

8.  Food & Drink.  Oaxaca reputedly has the best cuisine in all Mexico, with several unique state dishes such as tlayudas and moles. Culinary schools for both day lessons and more extended courses abound. Dining options range from the finest white linen establishments owned by world renowned chefs, to scrumptious late-night street food stands.  For the meat and potatoes crowd, there are 70s style steakhouses and of course fresh fish and seafood given Oaxaca’s extensive Pacific coastline. Lest we forget, Oaxaca is the nation’s mezcal capital. The country also has a burgeoning craft beer industry, and renowned wineries in Baja California dating back hundreds of years, the products of which make their way to Oaxaca.

9.  Housing. If you want to rent an apartment, with a bit of work you can find a two-bedroom unit in or close to downtown Oaxaca for about $500 including electricity, propane and water. Internet is typically extra. Cell phone plans with unlimited calls anywhere in Mexico, Canada and the US begin at about $15 a month. Naturally there are accommodations one can rent, such as houses, that come furnished with much more space and in quiet suburban surroundings or in the countryside, for significantly more. Similarly bargain hunters can find downtown lodgings for roughly $300, and even less depending on the desired accoutrements. While home prices vary greatly, one can build a small, two-bedroom, two-bath house with living and dining rooms, patio, kitchen and service area for a maid, from about $150,000. Serviced lots no more than 15 minutes from downtown go for as little as $100,000. 

10.  Culture. Most of us have retired in Oaxaca not because of the cost of living, the climate, or the rest of the foregoing. It’s the diversity of cultural traditions (to which learning Spanish provides access) with some 16 main ethnic groups and innumerable sub-cultures within each. And concomitant with that is the access we have to craft villages, art galleries, street and village fairs, live music, and of course our native daughter, Lila Downs.  

It’s not that I want to see more expats walking the streets, or hear them speaking English. On the contrary. I love Oaxaca the way it is.  However, more immigration does help the economy, and no matter what you hear or read about Mexico, those dollars do filter down and improve the lot of many.   

Alvin Starkman owns Mezcal Educational Excursions of Oaxaca (

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