How is New Mexico for retirement?

If your dream retirement is to spend your golden years in a place with lots of sunny days, unique culture, and rich history, you won't go wrong with New Mexico. Here are the pros and cons of retiring in New Mexico.

3 min read

New Mexico has earned its reputation as the land of enchantment. Its breath-taking desert landscapes, vibrant culture, and temperate climate makes it one of the top retirement destinations for retirees looking for a laid-back retirement. Here are some benefits of retiring in New Mexico.

New Mexico is a good state for retirement due to its moderately-friendly tax system, low cost of living, rich history, stunning landscapes, and temperate weather. The state exempts social security from income taxes, while other retirement incomes are taxed at your state income tax bracket. New Mexico has a rich history, vibrant culture, and is home to three UNESCO heritage sites. The expansive landscapes, numerous lakes, and mountains provide opportunities for fishing, kayaking, skiing, hiking, rafting, and horseback riding.

Is New Mexico a tax-friendly state for retirees?

New Mexico is a moderately tax-friendly state for retirees. The state recently enacted a law that exempts social security from taxation up to $100,000 for individuals or $150,000 for couples. This exemption became effective in 2022.

Other retirement incomes are subject to income taxes, but seniors above 65 may be eligible for an $8,000 deduction if their annual income is below $28,500 for single filers, $51,000 for married people filing jointly, or $25,500 for married couples filing separately. If the retirement income exceeds this deduction, it is taxed at the state's income tax bracket which ranges from 1.7% to 5.9%.

New Mexico does not have a sales tax; instead, it levies a gross receipts tax on businesses, and the tax may be passed on to consumers. The statewide gross receipts tax is 5.125%, while local government taxes average 2.71% to 4.31%. The state exempts groceries and prescription drugs from gross receipts tax, which offers some relief to retirees.

How much are property taxes in New Mexico?

New Mexico has an average effective property tax rate of 0.78%. In most counties, homeowners pay annual property taxes of less than $1,500. Seniors above 65 with a household income below $32,000 can apply for a freeze on their property value. This freeze protects them from the annual increases in property taxes.

Pros of retiring in New Mexico

Low cost of living

If you want to retire on a budget, New Mexico could be a good bet. New Mexico has a low cost of living, and you should expect to incur less cost on groceries, transportation, and utilities like gas, water, and electricity. In some towns where the cost of living is below the state’s average, retirees can live off their social security benefits only.

Good climate

Once you retiree, you will want to enjoy unlimited sunshine and temperate climate most times of the year. New Mexico gets all four seasons, and you will have plenty of things to do in each season. In the summer, you can enjoy up to 280 days of sunshine, with temperatures reaching a high of 84 degrees. In the winter, there is a moderate amount of snow, with temperatures falling to a low of 23 degrees.

Rich history and culture

Originally, Native Americans were the dominant tribes in New Mexico, and the state has various historical sites dating back to the 12century. The state is home to three UNESCO heritage sites, one of the most you will ever find in any state. Also, the population is culturally diverse, and you will find Native American tribes, Black Americans, Asians, Hispanics, and Latinos. You can also enjoy different cultural cuisines and some of the best wineries.

Recreation opportunities

If you love the outdoors, you will find plenty of recreation opportunities in New Mexico. The state boasts of many lakes, rivers, mountains, hills, and semi-arid landscapes, and you can find activities that interest you. You can go fishing, hiking, kayaking, skiing, or horse riding. If you move to the coastal towns, you can enjoy the sandy beaches or go for evening trails along the coastline.

Additionally, New Mexico has a thriving arts scene, and there are many popular musicians, artists, and writers you can follow. You can also attend music festivals and concerts that are held every year across the New Mexico cities.

Healthcare and essential amenities

If you are moving to New Mexico to access healthcare services, you will find more than a dozen hospitals both in the urban areas and rural areas. Although the cost of healthcare is high, the state has invested in affordable healthcare and prescription drug availability across the state.

Cons of retiring in New Mexico

High crime rate

The frequency of criminal activities in New Mexico is higher than the national average. Statics show that the likelihood of violent crimes in New Mexico is 8.6 per 1000 residents. However, despite the high crime rates, there are neighborhoods where there is a low crime rate, and residents feel relatively safe. Some of these neighborhoods include Los Alamos, North Valley, and Farmington.

Best cities to retire in New Mexico

Santa Fe

New Mexico’s capital, Santa Fe, offers a good deal to retirees looking to create memories in retirement. Its temperate climate, beautiful scenery, friendly people, and outdoor activities make it a popular retirement destination. The city has a rich history, and you can explore the historic cathedrals, buildings, and numerous museums and art galleries. You can also enjoy the annual art festivals, restaurants, wineries, and breweries.


Taos is a desert town located in Northern New Mexico, and it is a top destination for retirees. It is surrounded by mountains where you can go skiing or hiking. It is also close to the Rio Grande Gorge, a popular spot for fishing, boating, rafting, and hot air balloons. There are plenty of restaurants, art galleries, golf courses, and tennis courts in this city.


Placitas is located northeast of Albuquerque, in the foothills of Sandia Mountains. This city gives you a small-town feel, and its cost of living is below the statewide average. Even with the high desert climate, there are plenty of recreation opportunities for seniors such as biking, hiking, golfing, and horse riding. Taos is close to a train station and an international airport.

Las Cruces

Las Cruces is the second-largest city in New Mexico, and it sits in an agricultural area where residents can buy farm-fresh produce from farmer's markets. Retirees get easy access to quality healthcare, a booming economy, and year-round golfing.