If you’re a retiree in California, you don’t need anyone to tell you that life is expensive.
Property taxes, insurance, groceries, gas, eating out—it all adds up. For many, the “California dream” has quietly turned into a spreadsheet problem: Can I actually afford to stop working here?
That’s why more and more retirees are looking at living in San Felipe, Mexico, a small town on the Sea of Cortez just a few hours south of the border. The question isn’t just, “Is it pretty?” It’s:
“What does my real monthly budget look like in San Felipe vs California?”
Let’s break down the comparison with real numbers and realistic expectations so you can see how far your retirement income might stretch.
1. Big Picture: Mexico vs California in Pure Cost Terms
Before zooming into San Felipe, it helps to look at macro data:
- Overall, Mexico’s cost of living is around 39–40% lower than the U.S., with rent nearly 60% lower on average. Doble Nacionalidad Express+1
- Comparing Mexico vs California specifically, one analysis found California is about 2.6 times more expensive overall, with housing more than 3.5 times higher and restaurants and groceries also dramatically more expensive. MyLifeElsewhere
Now layer San Felipe on top of that:
- San Felipe is in Baja California (north)—generally less expensive than high-tourism southern Baja (Los Cabos) and major Mexican cities. Mexperience+1
- Guides focused on San Felipe describe the local cost of living as moderate by Mexican standards but significantly more affordable than typical U.S. coastal towns. Mexperience+1
Bottom line: if Mexico is already cheaper than California overall, San Felipe is one of the “value pockets” inside that cheaper country—especially for housing.
2. Housing: Where You Feel the Biggest Difference
For retirees, housing is usually the #1 budget line. This is where San Felipe quietly changes the game.
California snapshot
In popular coastal areas like San Diego:
- Cost of living is estimated around 44% higher than the U.S. average.
- Median home prices sit around the high six figures, with one recent analysis citing a median near $790,000+. Investopedia+1
Even if your mortgage is paid, property taxes and insurance keep climbing—especially on high-value homes.
San Felipe snapshot
In San Felipe and similar Baja coastal towns:
- Property prices and property taxes are dramatically lower.
- One San Felipe-oriented community estimates that housing and medical costs in Mexico can run around one-third of U.S. levels, with an example of a 2,000 sq ft home paying roughly $150 USD per year in property tax, versus thousands per year in the U.S. for a comparable property. Playa del Paraiso
Of course, taxes and prices vary by property and region—but the pattern is consistent:
👉 Housing and ownership costs are where retirees feel the most drastic relief when moving from California to San Felipe.
3. Groceries & Eating Out: Everyday Savings
You don’t retire on a spreadsheet—you retire on daily habits: coffee, groceries, meals out, little treats.
Groceries
Across Mexico:
- Groceries generally cost significantly less than in the U.S., especially local products and fresh produce. International Living+1
- Some comparisons show groceries 70%+ cheaper in Mexico than in California, depending on category. MyLifeElsewhere
In San Felipe specifically:
- Access to fresh seafood (shrimp, fish, clams) and local produce keeps many essentials affordable.
- Anecdotal expat reports note daily life budgets where high-quality local food is a fraction of California prices, with examples like low-cost fresh tortillas, bakery bread, and inexpensive local meals. Playa del Paraiso
Eating out
In Baja California as a whole, average restaurant prices look like:
- Casual restaurant meals in the equivalent of USD $10–$14 range per person for mid-level restaurants. Numbeo
In San Felipe, basic taco stands and family restaurants often run lower than that.
For California, it’s not unusual to spend:
- $18–$25 per person (or more) for a simple sit-down meal, especially in coastal cities—plus tax and tip.
Over a month, the difference between eating out a few times per week in San Felipe vs California can easily be hundreds of dollars.
4. Utilities, Internet & Transportation
Utilities
In Baja coastal towns, guides commonly estimate:
- Combined utilities (electricity, water, gas) for a modest home often landing in the $50–$100 USD/month range, depending on AC use. Baja123.com+1
In California, similar utilities for a comparable home often run:
- $150+ USD/month, especially where air conditioning, heating, and higher utility rates apply. Baja123.com+1
Internet & phone
- Home internet in Mexico is often around $25–$35 USD/month in many regions. Baja123.com+1
- Mobile plans can be surprisingly inexpensive, especially local prepaid or postpaid packages.
In California, high-speed internet alone can be $60–$80+ USD/month, and mobile service often stacks on top of that.
Transportation
In San Felipe:
- Many retirees drive less—no long commutes, mostly short trips into town or to the beach.
- Gas is not “cheap,” but driving patterns are often lighter than freeway-heavy California life.
In California, even if you’re retired:
- Insurance, registration, maintenance, and fuel are all priced at U.S. levels.
- In many areas, you still end up driving frequently for errands, medical appointments, and social life.
5. Healthcare: A Quiet but Powerful Factor
Healthcare is where many California retirees feel trapped: great hospitals, but high costs and premiums, especially before Medicare or for supplemental coverage.
In Mexico in general:
- Private medical care can run 50–70% less than in the U.S. according to multiple Baja-focused resources. Playa del Paraiso+1
- One guide for Mexico retirees suggests local health insurance for a couple can range roughly $80–$300 USD/month, with general doctor visits in the $5–$20 USD range. Mexico Relocation Guide
For San Felipe:
- You’ll find local clinics and basic services in town, with more advanced hospitals in Mexicali and Tijuana. Mexperience
- Many expats mix local private care in Mexico with Medicare or U.S. specialists for major issues.
In California, high premiums, deductibles, and copays can quietly eat into even well-planned retirements—especially for couples who retire before 65 or need specialized care.
6. Sample Monthly Budgets: San Felipe vs California
Let’s build two very rough sample budgets for a retired couple. These are not promises—just illustrative ranges based on current data and common expat reports. Your numbers will vary by neighborhood, lifestyle, and health situation.
Scenario A: Retired Couple in Coastal California
- Housing (rent or equivalent ownership costs): $3,000–$4,000+
- Utilities (electricity, water, gas, trash): $200–$250
- Internet & phones: $120–$160
- Groceries: $700–$900
- Eating out & entertainment: $400–$600
- Transportation (fuel, insurance, maintenance): $300–$500
- Health insurance & out-of-pocket: highly variable, but often $600–$1,000+
Estimated total: easily $5,300–$7,400+ per month, depending on exact housing and health costs. (In some high-cost California cities, analyses show annual household expenses over $80,000+ per year for a two-adult household. Investopedia)
Scenario B: Retired Couple in San Felipe, Baja California
Assuming you own a modest home or lot+house in a community near San Felipe:
- Property taxes: often a few hundred USD per year or less, divided monthly it’s negligible compared to California. Playa del Paraiso
- Utilities (electricity, water, gas): $70–$140/month
- Internet & phones: $40–$80/month
- Groceries: $300–$500/month (using Mexico-wide averages and Baja cost comparisons). Numbeo+1
- Eating out & entertainment: $200–$400/month
- Transportation: $150–$300/month (lighter driving, similar fuel costs, lower insurance)
- Health insurance & out-of-pocket: maybe $150–$400/month depending on plan mix and age. Mexico Relocation Guide+1
Estimated total: Many couples report living comfortably in Mexico in the $1,500–$2,900/month range, and in value areas like San Felipe, budgets closer to the lower-middle of that band are realistic if housing is already owned. Mexico Relocation Guide+1
That doesn’t mean “everyone can live on $1,500”—but it does show how moving from $5,000–$7,000+ in California to $2,000–$3,000 in San Felipe is plausible for many retirees.
7. Beyond the Numbers: Lifestyle Tradeoffs
Money isn’t the only variable. Moving to San Felipe also means:
Pros
- Quieter, slower pace of life
- Strong sense of small-town community
- Access to sea, desert, and outdoor activities
- Lower financial stress, which for many retirees equals better quality of life
Tradeoffs
- Smaller town: fewer big-box stores and “instant” conveniences
- Hotter summers; some retirees snowbird (winters in San Felipe, summers elsewhere)
- Need to adapt to another culture and language (a plus for some, a challenge for others)
- For major healthcare, you may travel to Mexicali, Tijuana, or across the border
For many retirees from California, the real question becomes:
“Would I rather continue paying California prices… or trade some convenience for a calmer life where my budget finally breathes?”
Is the Cost of Living in San Felipe Worth It for You?
If you’re running retirement numbers and feeling squeezed in California, San Felipe offers three powerful levers:
- Radically lower housing and property tax costs
- Cheaper day-to-day living—groceries, utilities, eating out
- Access to more affordable healthcare options
The best next step isn’t to sell everything overnight. It’s to test it:
- Spend a week or two in San Felipe.
- Track real daily expenses: groceries, meals, gas, small purchases.
- Talk to other retirees about their monthly budgets and what surprised them.
From there, your decision about San Felipe vs California stops being theoretical and starts being personal—and that’s where the numbers really click.
Disclaimer: Prices are subject to change trough time per diverse factors make a informed decision before taking a decision.
