[Ram]

Hello Friends, Admittedly anti-FI but thought of asking you all before making a decision.

We are thinking of either making an addition to our home (less expensive than moving and buying a new home). Cost will be around 250k. This extra space is a “want”.

Option is to take a home equity loan vs selling mutual funds in taxable brokerage to finance this “want”. Current home is paid off. Retirement is about 15 years away.

Maximize retirement contributions and have adequate in 529.

Thank you in advance for the advice.

[Zane]

How old are kids? When they move out will you need less space? The headache and stress of working with contractors on a 250k renovation will be crazy.

[Rick]

How far away is retirement without the want? It’s definitely a non zero number of years.

[Angela]

Not what you asked, but speaking as an empty nester:
We had about 4 to 6 years when, due to our kids’ ages, our house was too small and we were going to add on.

Frankly, we were too lazy and other things took up our time and we never got around to it.

Now, as empty nesters, our house is too big. If we had added on a few years ago, it would be WAY too big and we would probably be moving now.

So glad we waited the kids out!

[Frank]

I would borrow it from the equity right now. You can pay it down early later if that makes sense.

My answer would be different if you are grossly over-saved for retirement, but people who pay their mortgages down early are usually behind in retirement saving/investing.

[Chris]

Do the comps support it? Does the neighborhood support it? Right now the market is softening a little in some areas.

Especially large houses.

You could consider buying a house that has what you want in it. These are the questions I ask myself.

[Kelly]

Don’t. Either buy a retirement home that you can run as a rental business

Or a duplex in the college town your kids will attend

[Matt]

Money is meant to serve you and your personal goals. If ANYTHING is legal, and doesn’t mess up your financial/ life plan, go nuts.

You do you. Personal finance is personal.

[Katharina]

Use your equity. My husband has wanted a shop for the 25+ years we’ve been married and now we are planning it with a small apartment inside for our retirement years.

Kids or tenants can live in the current house (we are on 2 acres).

[Shawn]

Happy you asked this question as we’re in the same boat. For us, the additional space will be beneficial not only for the kids (they share a bedroom now) but also give us a space for our older parents to move in if they need it.

Right now that wouldn’t be an option and we don’t want to be caught unprepared.

[Krisa]

Have you consulted a realtor to see if this is a good investment into this home?

Vs moving to another home that’s everything you want.

[Author]

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