America's Emigrants: U.S. Retirement Migration to Mexico and Panama
WASHINGTON – While U.S. policy focuses on immigration from Mexico and Latin America, a new MPI study identifies a reverse trend: increasing numbers of senior citizens from the United States moving to Mexico and Panama to retire.
With the U.S. Census estimating that the population over 65 in the United States will double by the year 2030, understanding new and growing trends in international retirement migration will become increasingly important as baby boomers age.
“We found that government policies can create strong incentives that influence retirees’ choices about settling abroad ,” said MPI President Demetrios Papademetriou. “Visa, tax and property regulations have had significant effects on retirees’ decisions to move to Mexico and Panama, in addition to other factors such as climate and proximity to the United States.”
In Mexico, U.S.-born seniors primarily live in border states or states with known expatriate retirement communities.
Retirement states in Mexico showed rapid growth between 1990 and 2000. The number of U.S.-born seniors grew in Baja California Sur by 188.0 percent, in Jalisco by 138.6 percent, in Baja California by 43.5 percent, and in Guanajuato by 26.0 percent. These states also had the largest number of newly arrived U.S. seniors in 2000, and U.S. retirees in these states drew larger incomes than U.S. seniors in other states, possibly amplifying their effects on local economies.
The number of U.S.-born retirees in Panama is relatively small, but growing rapidly. According to Panama’s Census, the number of US-born seniors in Panama more than doubled between 1990 and 2000. Other statistics from the country’s Immigration and Naturalization Directorate indicate that the pace has quickened in the past few years with the number of visas in categories used by U.S. retirees tripling between 2003 and 2005 . In fact, the influx is so recent that official data on the characteristics of retirees and where they settle are not yet available.
Both Mexico and Panama have government policies aimed at attracting retirees. Panama allows a one-time import tax exemption and exempts newly constructed properties from property taxes for 20 years. Similarly, Mexico exempts retirees from import duties for six months and property taxes are also very low (ranging from 0.01 to 0.04 percent of the assessed property value.) Both countries offer an unlimited number of visas to pensioners who can meet relatively low income requirements.
For a number of retirees, affordable health care in Panama and Mexico, in contrast to the high expense of medical care in the United States, pushed them to consider retirement abroad. Other factors that influenced retirees’ decisions included a desire to maintain or improve their quality of life after retirement, proximity to friends and family in the United States, familiarity with Mexico or Panama through previous travel or work experiences, and climate and landscape.
The report, America’s Emigrants: US Retirement Migration to Mexico and Panama,provides an overview of international retirement migration and a detailed look at socioeconomic characteristics of U.S.-born retirees in Mexico and Panama, as well as a qualitative analysis of what motivated them to retire where they did and their experiences living abroad. Finally, it highlights areas where further study is necessary.