What a deductible retirement plan is

A deductible retirement plan is one whose contributions you can subtract from your income in the annual return, within the legal limit: up to 10% of your taxable income for the year, without exceeding five annualised UMA. In 2026 those five annualised UMA come to $213,973.20, because the UMA was set at $42,794.64 a year from 1 February 2026.

In practice that means part of the money you were going to pay in income tax turns into a credit in your favour, and the SAT — Mexico's tax authority — returns it to you. That is an immediate return before the money has even started being invested.

The detail almost nobody mentions: deductibility is a bonus, not the strategy. If the underlying product overcharges or invests badly, no tax refund rescues it. First you choose the investment, then you take advantage of the deduction.