They recently announced their engagement, and for the holidays Josh Duhamel and Fergie decided to retreat to Mexico. Ole!

Throughout the duration of their vacation, the “Fergalicous” singer and her fiancé have been enjoying a casual mix of relaxation and night life. Last night they were spotted grabbing some dinner with a few friends.

And according to witnesses, the happy twosome seemed in good spirits and “very festive.” This retreat may be a sign of things to come from Fergie.

She recently told press that she’s looking forward to a much slower-paced year in 2008, with less business and more time with her loved ones.

The “Big Girls Don’t Cry” signer confessed, “In 2008, I just want to have a balance. I’ve been touring for about four-and-a-half years straight. So for me, I love when I get to go home now and see my dogs. It’s important for me to see more of my family, see more of my sister, my mom and dad.”