Each year, International Living magazine rates the best places to retire based on costs, health care, safety, taxes and other factors.

This year, it named Mexico No. 1 so its time to look at Mexico for Retirement, citing its “perfect mix of centuries-old traditions and contemporary lifestyles.”

In 2003, Annie Reutinger and Jay Clark sold their home in the Oakland, Calif., hills and moved to San Miguel de Allende, an artsy, colonial town in central Mexico often compared to Santa Fe.

The couple rented for two months before buying a five-bedroom place in the center of town for $370,000 in cash. Because it was not in the restricted zone, they could own it outright.

Two years later, they sold it for $600,000 and put the money into a 4,000-square-foot house on a bigger lot 2 miles from town. Property tax is only $400 a year.

Shortly after moving to Mexico, Reutinger got the chance to buy a small business that rents properties owned primarily by North Americans to vacationers.