We have $5 million in savings and earn nearly $7,000 a month. Should we

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.

We have $3 million in retirement savings, a 401(k), stocks, bonds and cash, and the $2.1 million is in addition to this. We have a monthly income of close to $7,000 from bonds and pension. We are both approaching 65 years of age. We think this would be a better investment for the $2.1 million instead of putting it into the stock market or bond market.

We are questioning at our age should we do this, and should we do it during this time of high inflation?  We are not getting any younger and this would be our last build. Thinking we would live in the home as long as we could.

What are your thoughts and suggestions?


To Build or Not to Build?

The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.

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

Dear Build,

You and your husband are certainly in an enviable position.

On 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. With the cost of living rising so quickly, many Americans face a great deal of difficulty squirreling away even a fraction of the amount you have in savings.

I mention all of this so you can reflect on how lucky the two of you are to even have the ability to consider building what sounds to be quite a luxurious home.

I’m glad to see that you’re thinking carefully about this decision before putting money down to reserve a lot — because I think this could be a bad deal.

Someone with only $100,000 in their bank account might think it sounds crazy to suggest to someone with around 50 times that amount saved up that building their dream home isn’t a good idea.

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.

But really, the money you spend upfront is just part of the equation. As you say, your combined income is $7,000, which is only $84,000 per year. That’s solidly middle class. The median income for a three-person household as of 2020 was $90,131, according to Pew Research Center.

You almost certainly have enough money to build the home. Though, I’ll warn you that it could cost more than you realize. Most home builders are still…

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