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August 12th, 2010 6:35 PM

EXECUTIVE SUMMARY:   2010

With the looming economic pressures on America’s baby boom generation brought on by rising health care costs and the loss of personal wealth due to the global recession, a growing number of Americans aged 50+ are now actively considering relocating outside the country to retire.  Today there are a growing number of foreign locales where Americans have chosen to retire, including Panama, Costa Rica, Belize, Ecuador and the Dominican Republic as popular destinations.  Yet, because of its close proximity to the United States and its affordability, Mexico remains the #1 destination for Americans retiring internationally.

According to U.S. State Department estimates, in 1999 an estimated 1 million Americans were living in Mexico on either a part-time or full-time basis, although a 2004 survey estimated that the number of Americans residing in-country at between 500,000 and 600,000. Though no reliable estimate exists for the number of American retirees now residing in Mexico, over the past decade the number of Americans has noticeably increased as measured by the rapid growth of large-scale real estate projects, particularly in Mexico’s coastal communities targeted specifically at 50+ U.S. and Canadian second homebuyers and retirees.

While Mexico’s appeal among retirees had increased during 2000-2008, the weakening of the U.S. economy, coupled by growing U.S. consumer public safety and health concerns related to the H1NI flu virus, growing narcoviolence and recent U.S. State Department travel alerts, has led to a noticeable decline in tourist-related travel from the United States to Mexico. According to statistics from the Mexican Ministry of Migration, tourist travel to Mexico dropped by over 79% during the month of May 2009 versus the same period in 2008 due to the impact of the H1N1 flu outbreak. In September 2009, total tourist travel totaled 454,826 individuals versus 994,315 during the same period in 2008 – a 45% decline.

As the vast majority of retirees visit the Executive Summary location they have selected several times before they purchase a retirement property, the International Community Foundation has sought to better understand what impact recent events might have on that audience. To do this, the Foundation surveyed over 840 U.S. retirees in coastal areas of Mexico over 50 years of age, resulting in rich data on their demographics, preferences, environmental inclinations, and sense of civic responsibility. Through our independent research, we know that these consumers want to make smart, socially responsible, and sustainable choices when purchasing property and creating a life in coastal communities in Mexico. Some of that information is presented below, with other key findings included in subsequent briefings.

Based on the survey results, a general profile of U.S. retirees over 50 years of age residing in coastal communities in Mexico emerges:

  • U.S. retirees in Mexico are relatively young and well-educated. Nearly 53% are under 65 years of age (and, in fact, 80% are 69 years or younger), perhaps indicating that Mexico may not be as attractive for older Americans that require additional medical care. In addition, almost two-thirds have at least a college degree, and another 28% had attended at least one-year of college.
  • The respondents chose Mexico for retirement due to its proximity to the United States and its affordability relative to other U.S. retirement destinations.
  • U.S. retirees residing in Mexico continue to maintain strong ties to the U.S.: 50% consider the U.S. their primary country of residency, and almost 22% return to the U.S. on a monthly basis. 85% remain in contact with friends and family in the U.S. through the internet, 64% used the telephone, and 33% used Skype.
  • Retirees living in Mexico are worldly and world-wise. Of those that had considered retirement locations other than Mexico, 41% considered retiring in Central America or the Caribbean; 19% considered other non-U.S. destinations as possible retirement locations. Should quality of life decline in Mexico, those that are financially able could begin to look elsewhere.
  • Mexico may become an alternative for those U.S. retirees facing economic challenges in the future. While survey results and focus group participants clearly express that economic reasons were a major factor in leading them south of the U.S.-Mexico border, the potential is likely greater than is being realized. In 2007, the California Elder Economic Security Standard Index (a financial measure that indicates basic financial needs for seniors in California) ranged from $21,000-$27,500 as the minimum needed for major California cities.
  • The survey results show that nearly 44% of U.S. coastal retirees in Mexico live comfortably on less than $1,000 per month – an amount which underscores the potential demand for retirement options for low and middle income retirees in Mexico.

 


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Posted by Craig Harrison on August 12th, 2010 6:35 PMPost a Comment

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