3 seaside retirement towns in Mexico within driving distance of the US

One of the most valuable conveniences you could hope for when purchasing a home abroad is the ability to load up the car and drive to it. That’s one of Mexico’s biggest advantages for Americans interested in retirement overseas.

Anyone who has driven to western Mexico from the U.S. has likely skirted along the Sea of Cortez. The Sea of Cortez is the body of water that separates Baja California from the Mexican mainland. It’s also known as the Gulf of California. It starts at the mouth of the Colorado River. The sea is noted for its warm, calm and relatively protected waters and for being one of the most biologically diverse seas on earth.

The most expensive places in the world to retire:

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9. West South Central

Average spending: $28,540

Younger retirees in Texas, Oklahoma, Arkansas and Louisiana spent less than retirees in any other part of the U.S. At $11,742 per year on average, their housing costs are lower than anywhere else in the country. (Go here to see how much house you can afford.) They also spent less on health care. But unlike most regions of the country, where retiree spending falls over time, people in the West South Central region spend more as they get older. By the time people are between the ages of 75 and 84, they’re spending $33,257 per year, in part because of a jump in health care spending to $2,600 per year.

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8. East South Central

Average spending: $29,140

Retirees in the East South Central region (which includes Mississippi, Alabama, Tennessee and Kentucky) have the second-lowest spending in the country. They also have the biggest difference in spending between pre-retirees (those ages 50 to 64) and people ages 64 to 74, with annual expenditures falling from $42,261 annually to a little less than $30,000. Downsizing might be the main reason. The older survey respondents spent nearly $7,400 less per year on housing than those in the 50-to-64 age group.

A low cost of living is another reason this region is also home to four of the 10 best cities for people who hope to retire early.

7. East North Central

Average spending: $35,201

People in the Great Lakes states of Wisconsin, Michigan, Illinois, Indiana and Ohio had the lowest average spending outside of the South. That’s good news for people retiring in that region, but it comes with a caveat. Average spending in this region didn’t decrease as dramatically with age as it did in some parts of the country. By the time people reached age 85, they were still spending $31,059 per year on average, more than any other region except New England.

6. Middle Atlantic

Average spending: $38,125

Retirees in the mid-Atlantic states of New York, Pennsylvania and New Jersey spend an average of $38,125 every year, only slightly less than those in the 50-to-64 age group. Their average expenses included $13,440 on housing and $1,940 on health care. (You can determine your housing budget here.)

5. Pacific

Average spending: $38,464

Retirees in Washington, Oregon, California, Hawaii and Alaska spent about $38,000 per year on average, including $2,360 on health care and $18,300 on housing. Their housing costs were the second-highest in the country after New England, which may not be surprising considering this region is home to eight of the 10 least affordable cities in the United States.

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4. Mountain

Average spending: $39,411

Living isn’t cheap for retirees in the vast Mountain region, which includes Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona and New Mexico. But things get better as you age. People in these states spend about $10,000 less per year between ages 75 and 84 than they do in the first decade of retirement.

If you end up retiring in the Mountain region, you’ll have lots of company. States such as Arizona, with its sunny skies and relatively low taxes, are perennially popular with retirees.

3. West North Central

Average spending: $42,240

Stereotypically frugal Midwesterners actually had the third-highest spending in the U.S. People in Minnesota, North Dakota, South Dakota, Iowa, Nebraska, Kansas and Missouri spent more than $42,000 per year on average from ages 65 to 74. About $20,000 went to housing and health care, with $22,000 left over for expenses, including food, transportation, travel, entertainment and dining out.

One reason retirees in this region can spend big? Some are quite wealthy. Minnesota, North Dakota, Nebraska and Iowa are all in the top 25 states in the number of millionaires per capita, according to a study by Phoenix Marketing International.

(rasilja via Getty Images)

2. South Atlantic

Average spending: $44,350

Retirees in the sprawling South Atlantic region, which stretches from Delaware to Florida, have some of the highest spending in the U.S. People living in Delaware, Maryland, West Virginia, Virginia, North Carolina, South Carolina, Georgia and Florida spend $44,350 per year, on average, including $16,980 on housing and $3,000 on health care.

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1. New England

Average spending: $46,019

New England retirees are the biggest spenders in the U.S., with annual expenditures of a little more than $46,000 per year. People in Maine, New Hampshire, Massachusetts, Vermont, Rhode Island and Connecticut have the highest housing costs in the country, at $19,507 annually — almost twice as much as those in the cheapest states — though costs fall significantly as people age. Health care spending among 65- to 74-year-olds is also higher than anywhere else, at nearly $6,000 per year, almost twice as much as what retirees in other parts of the country pay.

(kanonsky via Getty Images)

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[See: The Best Places to Retire in 2018.]

Several popular retirement spots are located on the Sea of Cortez, all within a day’s drive of the U.S. border: Puerto Peñasco, San Carlos and Mazatlán. These towns are quite different from each other, but they also have several things in common. They all enjoy the convenience of U.S. franchises, big-box stores and U.S. products. Many people in these places speak English, including virtually all service providers, and each location has a large English-speaking expat community. The weather is just about perfect in the winter, with balmy days and cool nights, but it’s far from perfect in the summer. Fishing is great on the sea and a big tourism draw to the area. Property taxes are also low, even on the beach.

Here are three attractive retirement choices just south of the border:

Puerto Peñasco, Sonora

This popular destination is known as Puerto Peñasco in Spanish and Rocky Point in English. Surprisingly, it had its English name first, named so in 1826 by a retired Royal Navy admiral who was in the area scouting for precious metals. The Mexican president renamed the town in the 1930s.

Puerto Peñasco is only 62 miles from the U.S. border, a drive that takes about one hour and 10 minutes. It’s just over three-and-a-half hours by car from Phoenix and six hours from San Diego.

Puerto Peñasco enjoys miles of wide, sandy beaches bordered by the warm waters of the Sea of Cortez. The waters are warm, clear and calm all year long. The grade going into the water is gentle, making it perfect for visits from grandchildren. For sun lovers, Puerto Peñasco sees brilliant sunshine year-round. The town is on the edge of the Altar Desert, one of the driest and hottest in the Americas. If you’re a boater, you’ll appreciate the large, sheltered marina, which hosts both commercial and pleasure craft.

Best of all, properties in Puerto Peñasco can be quite a bargain, even on the beachfront. You’ll often see listings from $110,000 to $150,000. A walk-out-onto-the-sand townhouse will run you $204,000, and beachfront condos start at about $149,000 in good areas. An ocean-view home three blocks from the beach will set you back $109,000. Luxury properties in high-end developments can easily exceed $500,000.

Disadvantages of Puerto Peñasco. Puerto Peñasco does not have an attractive historic center, so there are better places to enjoy a downtown lifestyle near the sea. The seafront restaurant district is fairly touristy, so it’s hard to enjoy the seafront promenade without the annoyances of vendors and tour guides looking for your business. There are no big cities nearby, so it can be difficult to obtain some of the practical items that larger cities offer. There are also no direct flights to the U.S. or Canada.

Advantages of Puerto Peñasco. Puerto Peñasco is just over an hour from Arizona. The area has a large expat community, and you’ll have plenty of neighbors from Arizona and California. U.S. dollars are accepted almost everywhere, except at the gas station. You’ll get a better deal spending pesos, but it’s nice to know you can use dollars in a pinch.

[Read: 8 Reasons Mexico is America's Favorite Place to Retire Abroad.]

San Carlos, Sonora

This city was born as a well-planned tourist destination in the mid-1950s. It had formerly been three large ranches. As such, you won’t find a colonial historic center in San Carlos, but you also won’t find poverty or run-down neighborhoods .

San Carlos is a popular drive-to destination for people in the western U.S. and Canada. It’s as far south as you can go in western Mexico without having to get a vehicle permit. It’s an easy drive down Highway 15 from Arizona.

The town has a positive, upbeat atmosphere, bolstered by the abundance of cheerful cafés, bars, shops and restaurants. Most venues cater to the American and Canadian residents, so you’ll see plenty of burger joints along with a good selection of seafood restaurants.

Sandy beaches highlight the entire area, bordering warm, calm waters. The city sits at the top of a giant cove, and the San Carlos coastline actually runs east and west, rather than north and south. In town, the mile and a half of beaches are mostly behind oceanfront homes and buildings. But as soon as you leave town heading down the coast, you’ll encounter over three miles of beautiful, uninterrupted beach. Heading north, it’s just as beautiful.

San Carlos is a noted diving destination, and visibility is commonly 100 feet or more and sometimes over 200 feet. It’s also a fishing destination and a good place for boaters, with two marinas.

Properties in San Carlos are a good deal. A modern beachfront condo will start at about $200,000 for a two-bedroom, 1,400-square-foot, on-the-sand building. One listing for a two-bedroom, one-bath, 1,300-square-foot home about a block from the beach had an asking price of only $83,000. A nice beachfront house on a large lot in the Bahia sector will start at $325,000.

Disadvantages of San Carlos. San Carlos is a planned city that came into being fairly recently. So you won’t have the feel of Mexican heritage that you see in most Mexican cities. You will, however, see many homes in the colonial style. There are no direct flights to the U.S. or Canada.

Advantages of San Carlos. San Carlos is an easy drive from the U.S. border, with no vehicle permit required. It’s a noted diving location with good diving facilities. There are two nice marinas with plenty of slips. It’s adjacent to Guaymas, which has good services and commercial establishments.

[See: 10 Tips for Finding a Great Place to Retire.]

Mazatlán, Sinaloa

Mazatlán is an established and well developed resort city on the Mexican coastal mainland opposite the tip of Baja California. It’s a fairly large city with resort areas and a historic center along the coast. There's also a seaport, tuna fleet and industrial area. Most expats and part-year residents live on or near the coast.

One thing that sets Mazatlán apart is that it has a large and well-maintained colonial historic center. Further upgrades are underway. Road crews are actually converting the paved roads in Centro back to cobblestones. They’re also widening the boardwalk, adding bike lanes, expanding many of the sidewalks and improving the lighting.

What originally made Mazatlán famous were the beaches. There's about 20 miles of white sand, bordering clear, warm waters, with a boardwalk running adjacent to the beach for about 10 miles. You’ll also find a good offering of big city amenities. There are hospitals, theater, jazz, classical concerts and fine dining, along with the waterfront seafood restaurants and beach scene. Mazatlán is a great place to combine colonial city living with a beachside lifestyle.

The city also offers several golf courses and a large marina district with good marine facilities as well as residential developments. Fishing is a big attraction in Mazatlán, with a good-sized fleet of boats to service the influx of anglers going for sailfish, wahoo, mahi mahi and yellowfin tuna, as well as the area’s record-setting marlin.

Properties in Mazatlán vary from basic vacation construction to high-end luxury. A large, two-bedroom beachfront condo away from the historic center will start at about $199,000. A waterfront home in the marina district will go for $189,000 for a three-bedroom, 2,100-square-foot unit. The best luxury addresses on the water will sell two-bedroom, 2,100-square-foot units starting at about $340,000. If you want a luxury seafront unit in the historic center, you’ll pay about $350,000.

Disadvantages of Mazatlán. If you’re driving, Mazatlán is about the limit for a one-day drive. While the 14-hour drive from the border may be doable in one day, you could break it into two days if you’re not in a rush. In the main tourist area you’ll find plenty of touristy annoyances, such as tour guides and vendors. As a resident, you probably won’t spend much time there. Mazatlán can also get noisy downtown during weekends and holidays.

Advantages of Mazatlán. Mazatlán offers city amenities, such as theater, orchestra and city-style shopping. You’ll find plenty of fine dining, cafés and hole-in-the-wall bars to enjoy. Most of the beaches are directly accessible, without buildings blocking access. There are a variety of lifestyles to choose from, including quiet or bustling and historic or modern. You can choose to live among expats or Mexicans. Convenient flights make the trip to Phoenix less than two hours. There are four nonstop flights to the U.S. and five to Canada.

Is the Sea of Cortez right for you? Puerto Peñasco is perfect for those who want a convenient, short-term getaway. It's feasible for a weekend destination or part-time vacation home for people from the western U.S. San Carlos is within an easy drive of the U.S., and offers many amenities to expat and part-time residents. It can also be a base of exploration from which to discover more of interior Mexico. Mazatlán is best for full-time or long-term living, offering the chance to combine colonial city living with a beachside lifestyle.

The Sea of Cortez is calm, warm, sheltered and close to the U.S. If you’re looking for an easy-access seaside home, there’s a good chance that one of these cities will be right for you.

RELATED: 11 ways to retire with $1M

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Make a Commitment to Save for Retirement

If saving for retirement isn’t a priority for you, consider this: If you’re struggling to get by now on a small paycheck, how will you get by in retirement without savings and no paycheck? You don’t want to retire broke and live on Social Security benefits alone.

“It can certainly be challenging to build up a good-sized nest egg, but it will certainly be impossible if you never try,” said Belinda Rosenblum, a certified public accountant and president of Own Your Money. “It all starts with a commitment.”

To ensure you follow through on your commitment to saving, let your family or friends know about your financial goals, said Polly Scott, spokeswoman for the 2017 National Retirement Security Week promoted by the National Association of Government Defined Contribution Administrators.

“If you talk about it … you’re more likely to do it,” she said.

Know Your Number

You might be asking yourself, “How much do I need to retire? Do I really need to save $1 million?” The answer will vary from person to person.

“One million dollars isn’t the magic number,” Scott said. “In most cases, it doesn’t even have to be close to that number.”

So, the first thing you need to do is calculate how much you need to have to retire and how much you should save each month to reach that goal. There are plenty of free online retirement calculators — such as ones at Fidelity, Schwab and Vanguard — that can help.

Once you know how much you need to set aside each month to reach your savings goal, you can create a plan to make it happen.

“Even if you don’t get to $1 million and you only get to $100,000, at least you’re not retiring on just Social Security,” Scott said.

Start Saving as Soon as Possible

The sooner you start saving, the less you’ll have to set aside each month to save $1 million for retirement — which is good news if your income is low.

“If you are age 30 today and invest $600 a month from now to age 65, if your investments earn an average return of 7 percent a year, by age 65 you’ll have $1 million,” said Dana Anspach, founder and CEO of financial planning firm Sensible Money. “If you’re starting at age 40, you’ll need to be able to put away about $1,300 a month to get to $1 million by age 65 — still assuming a 7 percent return.”

If you start saving at age 20, you could set aside less than $300 a month and have $1 million by age 65, assuming a 7 percent annual return. By starting at this younger age, you’d need to save half as much each month as you would have to if you waited until 30 and about one-fourth as much if you waited until 40 to start building a $1 million nest egg.

Find Room in Your Budget to Save

If you’re making less than $50,000 a year, you might be wondering how you can find room in your budget to save several hundred dollars a month.

“First, you have to want financial freedom just as much as you want other things in life,” Anspach said. Focusing on that goal helps you see the payoff from cutting costs from your budget, which can range from finding less-expensive housing to buying things used rather than new, she said.

“Even something as small as giving up soft drinks in favor of water can lead to big savings,” Anspach said. “Suppose you spend an average of $12 a week on soft drinks and tea. That’s $624 a year.”

Rosenblum said you can cut $250 out of your monthly budget easily to put into savings by opting for a lower-cost cable TV package, slashing your grocery bill by planning meals to eliminate food waste, and eating out or getting take-out less often. Resources such as 5 Dollar Dinners can help you make low-cost meals at home, she said.

Be Consistent

In reality, “becoming a millionaire is less about how much you make and more about consistency,” said Deacon Hayes, founder of WellKeptWallet.com and author of the forthcoming book, “You Can Retire Early!”

“One way to ensure that you actually invest consistently is by setting up an automatic transfer from your bank to your investing account," he said. "This way, you can stick to your investing strategy without much thought required each month.”

If your employer offers a workplace retirement plan such as a 401k, you can have contributions automatically deducted from your paycheck. If you were automatically enrolled in your employer’s plan, check your contribution amount to make sure you’re saving enough each month to reach your savings goal. “You need to be contributing a minimum of 10 percent of pay,” Scott said.

If you don’t have access to a workplace retirement plan, you can save for retirement on your own by setting up automatic transfers from your checking account to an individual retirement account, such as a Roth IRA or a solo 401k if you’re self-employed.

“Make [the] commitment to pay yourself first then work your lifestyle around what’s left,” Scott said.

Take Advantage of Matching Contributions From Your Employer

A great way to boost your retirement savings is to find out if your employer will match your contributions to your workplace retirement account. The most common match is a dollar-for-dollar match. But, typically, you have to save a certain percentage of your income to get the full match.

Twenty-five percent of employees miss out on this free money because they don’t contribute enough to their retirement plan to get their employer’s full matching contribution, according to Financial Engines, an independent investment adviser website.

“If you work for an employer that offers a retirement plan and a company match, be sure to contribute enough to receive the full employer match,” Anspach said. “Many employers match up to 3 percent of your pay. At $50,000 a year of income, that adds up to $1,500 a year of employer-provided funds.”

Save Your Tax Refund

If you get a big tax refund, you should put that money into retirement savings, Rosenblum said. The average refund for the 2017 filing season was $2,782, according to the IRS. If you earn $50,000 a year, stashing a refund of that size would be equivalent to saving about 6 percent of your income, she said.

Or, you could adjust your tax withholding by filling out a new Form W-4 to put more money back into your paycheck each month rather than get a big refund each spring. Then, use that extra money in your paycheck to boost your automatic contribution to your 401k or workplace retirement account.

Get a Side Gig to Boost Savings

Another way to come up with more cash to retire with $1 million is to get a side gig to boost your income. Both Scott and Rosenblum recommend finding a second job and stashing those earnings into a retirement or investment account.

You could open a Roth IRA and contribute up to $5,500 a year if you’re single and your modified adjusted gross income is less than $118,000 or married with a modified AGI of less than $186,000. The big benefit of this account is that you can withdraw money tax-free in retirement. Withdrawals in retirement from a 401k or traditional IRA are taxed as regular income.

Choose Investments That Offer Growth

To increase your chances of having $1 million in retirement, you need to invest your savings in assets that will grow.

“No one gets rich by saving in the bank,” said Byrke Sestok, a certified financial planner and president of Rightirement Wealth Partners in White Plains, N.Y. “If you have 30 years before retirement and 30 years during retirement, then you have the time to participate heavily or totally in the stock market, and ignore the big drops and focus on the fact that stocks have historically proved to be a better-performing asset class over bonds and cash.”

That doesn’t necessarily mean it’s up to you to pick the right stocks, though. See if your 401k or workplace retirement plan offers index funds, which track the performance of a broad stock market index such as the S&P 500. Or, Scott recommends target-date funds, which have managers who shift your portfolio allocation over time from stocks to more conservative investments as you near retirement age.

Opt for Alternative Investments

If you make less than $50,000 a year, there’s only so much you can afford to set aside in savings each month. So rather than save your way to $1 million, build your net worth through investing in real estate or starting a business, said Todd Tresidder, wealth coach at Financial Mentor.

“Think outside the traditional model — go to alternative assets,” he said.

Don’t assume your lower income limits your ability to pursue either of these alternative assets. You don’t necessarily have to have money to start a business, Tresidder said. You just need an idea, and you have to be willing to put in the hard work to make it happen.

If you want to invest in real estate, Tresidder said you can get a loan for a small, inexpensive property, fix it up on your own and flip it for a small profit. Then you can use that equity to buy your first rental property that will generate a stream of income.

Don’t Tap Retirement Savings Before You Retire

You can cash out a 401k when changing jobs, but that will seriously hurt your chances of saving $1 million for retirement.

“Don’t ever do that,” Scott said. “That is very destructive to your retirement security.”

Not only will you have to pay state and federal income taxes, but also you will have to pay a 10 percent early withdrawal penalty on the money you withdraw. Plus, most people don’t go back and replace what is withdrawn, Scott said. So, they miss out on investment earnings.

To avoid having to tap retirement savings — whether it’s to get you through a period of unemployment or to pay for emergencies — Scott recommends that you build an emergency fund. Set aside cash in a savings account each month so you can access if you’re hit with an unexpected expense.

“You don’t want to be in a situation where you’re in an emergency and raid your retirement account,” she said. “That’s counterproductive.”

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