Yes, you need visa if you retire or work in Mexico. Any American or Canadian can get a tourist visa upon arrival in Mexico, which is good for 6 months. You can come and go on that type of visa as often as you like but if you are going to be here for more than 6 months then you must get one of two other visas, which is temporary or permanent.
The process to get either of these two visas has to be initiated back in your home country at the closest Mexican consulate. There are slightly different requirements for either the temporary or the permanent visa but the most important requirement is that you meet an economic threshold either by having a certain amount in savings or by having a certain amount of regular monthly income. If you can prove either of those two things, then you will be given a visa. Once you get pre-approved at the Mexican consulate in your home country then I believe you have 6 months to come to Mexico to finalize the process, which usually takes 3 to 4 weeks once you come down here. A temporary visa has to be renewed every year or every 4 years depending on the type of visa that you apply for. Commonly, I guess, you have to be in Mexico to do your renewal so it can affect travel plans or those kinds of things. A permanent visa, on the other hand doesn’t have to be renewed.
In order to work in Mexico legally, technically, you must have either a temporary or a permanent visa. If you have a permanent visa, you just have to notify the immigration department that you are working and why you are working. If you have a temporary visa, then you actually have to work with your company in order for them to tell immigration and check through everything and make sure everything is alright.
You can work here in Mexico if you have a proper visa and you can stay here year round as well if you have the proper visa. You can come and go as you please on a tourist visa. As of December 2015, if you have a 6-month visa, you can just step across the border and come back and get another 6 months. You could drive your car over to the US and then come back to Mexico. Loreto is only a 12-hour drive.
In real estate, it’s important for homeowners to get either a temporary or a permanent visa when they are thinking of selling because that is the only way you can get an exemption on paying capital gains. If you can prove residency, which you can prove by having either a temporary or a permanent visa, then you can sell your home in Mexico and get an exemption like you’re paying back home. The exemption is good once every two years.