We have $5 million in savings and earn nearly $7,000 a month. Should we spend over $2.1 million to build our dream home?
Dear MarketWatch. We are thinking about building a modern home on 26 acres in the Texas Hill Country. We would pay cash; the estimated costs to build excluding the land is $2.1 million. Including land, it would be close to $3 million in value. We are retired and this would be our forever home and an investment. The land is in a much sought-after subdivision located 45 minutes southwest of Austin, Texas.
Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Jacob Passy at [email protected] average, baby boomers have around $102,000 in personal savings and $139,000 in retirement savings, according to a 2021 study from Northwestern Mutual. And inflation has only gotten worse this past year.
I’d argue, though, that you’re asking the wrong questions. Your main concern seems to be whether building this home is a good investment. I’m worried that you may not be able to afford the house, without cutting corners elsewhere. “I spoke with a client this weekend who found his ‘dream retirement home’ for almost $1 million, but soon realized that he hadn’t factored a $36,000 annual property tax bill into his retirement living expenses,” said Tim Sobolewski, president of the Financial Planning Center, a financial advisory firm based in Amherst, N.Y.
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