There's a new best country in the world for retirement, according to the experts at International Living (IL), an authority on global retirement and relocation opportunities. In its Annual Global Retirement Index, Mexico - one of the most popular countries among U.S. expats - has edged out last year's No. 1, Panama.

But truth be told, Mexico (which was ranked No. 3 in 2016), Panama and Ecuador are within a hair of each other in the new International Living rankings. "There's just a tenth of a percentage point difference in their total rankings," said Dan Prescher, an International Living senior editor who lives with is wife Suzan Haskins in Cotacachi, Ecuador.

Retiring Abroad Is Growing in Popularity

If you're considering joining the expat community, you're in good company.

Six of IL's Top 10 places in this year's ranking are nearby, in Latin America - either in North America (No. 1 Mexico), Central America (No. 2 Panama, No. 4 Costa Rica and No. 8 Nicaragua) or South America (No. 3 Ecuador and No. 5 Colombia).

Just three are in Europe (No. 7 Spain, No. 9 Portugal and a new addition to the winners' list, No. 10 Malta); just one is in Asia (No. 6 Malaysia). Thailand, No. 7 in last year's rankings, fell out of the Top 10.

Incidentally, communities in Mexico, Colombia, Spain, Nicaragua and Portugal are also in the recently-released "Top 10 Best Places to Live Overseas in 2017" report from Live and Invest Overseas.

How International Living Ranks Countries for Retirement

To compile its 2017 ranking, International Living's editors, correspondents, contributors and contacts around the world crunched data and personal insights for 10 categories - from 'Cost of Living' to 'Visas & Residence' to 'Fitting In' to 'Climate.'

Cost of living is a major retirement concern for Americans, according to a recent Transamerica Center for Retirement Studies survey of U.S. workers. Respondents told Transamerica that an affordable cost of living was their most important criteria for where to live in retirement.

Where the Buys Are

"The big news for U.S. citizens in the past year regarding retiring around the world was the strength of the dollar. It has made living in some countries, especially Latin America, incredibly cost effective," said Prescher. "The exchange rate was outrageous in our favor. The Mexican peso today is 20 to 1 against the U.S. dollar, which has made Mexico an incredible deal."

Expats in Mexico told IL that they live well there on as little as $1,200 a month. "My rent is $575 a month for a two-bedroom apartment with a great modern bathroom and nice kitchen," San Francisco native turned Puerto Vallarta resident Jack Bramy told International Living.

So What Else Makes Mexico So Great?

Mexico was best among International Living's Top 10 for Entertainment & Amenities, but also had impressive scores in every other category.

I asked Prescher why Mexico scored so well for entertainment and amenities. Turns out, he and his wife were visiting the picturesque town of Ajijic, in western Mexico, at the time. "Oh man, there’s nothing like good quality Mexican food and music," he said. "We're just 50 minutes from Guadalajara, the second largest city in Mexico and a world-class city like Miami. If you can't find it or do it in Guadalajara, it's not worth finding or doing."