Meet Bill and Karen, a couple in their early 60s who have recently become empty nesters. With their children grown and out of the house, they’ve started thinking about upgrading their home, dreaming of a $150,000 renovation to finally get the perfect kitchen and expanded living space for entertaining. They can pay for the renovation in cash, but doing so would likely push their retirement back by five years. This trade-off is giving them second thoughts—should they move forward with the renovation or prioritize retiring as planned?
Bill and Karen’s situation is one that many empty-nesters face as they approach retirement. After years of hard work and saving, they’re balancing the desire to enjoy their home with the need to preserve their financial security. Here are some factors they can consider in order to make the best decision.
This post was updated on October 10, 2025 to clarify the nature of situation-specific finances, inflation as a part of calculations, that real returns fluctuate, the typical recouped value on home renovations, and fee-only vs fee-based distinction.
1. Assess the Financial Impact of the Renovation
Before moving forward, Bill and Karen need to understand the full financial impact of spending $150,000 on the renovation. While they plan to pay in cash and avoid taking on debt, this would significantly reduce their savings and could slow the growth of their retirement investments. Even though it feels good to avoid debt, using this large sum now means losing the potential returns it could generate if left invested.
For example, if they left the $150,000 in a well-diversified portfolio earning an average return of 5% annually, it could grow to nearly $190,000 in five years (though after inflation, its real value might be closer to $170,000). By spending it now, they may miss out on that growth, and their overall retirement fund may not be as robust as they had planned. (of course, assuming a steady 5% annualized return is only hypothetical— real returns fluctuate, especially for retirees approaching withdrawal phase.)
2. Consider the Emotional and Lifestyle Benefits
It’s also essential for Bill and Karen to consider the emotional and lifestyle benefits of the renovation. With their children no longer living at home, they now have the flexibility to focus on themselves and their dream home. If a new kitchen or a more open living space will bring them more enjoyment and improve their quality of life, the investment might be worth it—even if it means working a few extra years (however, for people in their 60s, health or job market changes can make that unrealistic).
However, they should ask themselves whether this renovation is a necessity or just a luxury. If the renovation addresses significant issues like aging infrastructure or making their home more comfortable for retirement, it may be a smart investment. On the other hand, if it’s purely for aesthetic reasons, they might want to reconsider whether it’s worth delaying their retirement goals.
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3. Explore Scaling Back the Renovation
Bill and Karen could explore scaling back their renovation plans to achieve a balance between upgrading their home and maintaining their retirement timeline. Instead of the full $150,000 project, they might be able to focus on the most impactful parts of the renovation—such as updating the kitchen or improving energy efficiency—while delaying or eliminating other, less critical upgrades.
Renovation costs have risen sharply in recent years — according to HomeAdvisor, average remodel costs in 2025 are up roughly 20% from 2020. By cutting the renovation budget to $75,000 or $100,000, they could still make meaningful changes to their home without putting their retirement goals in jeopardy.
4. Evaluate the Return on Investment (ROI)
Bill and Karen should also consider the potential return on investment (ROI) of the renovation. While they don’t plan on selling their home immediately, certain home improvements—like a kitchen remodel or energy-efficient upgrades—can significantly increase their home’s resale value. This could make the renovation a worthwhile investment, especially if they plan to downsize in the future.
That said, they should be cautious not to over-improve their home relative to the neighborhood, as the renovation could add more value than the market can support. Major renovations often improve enjoyment and resale appeal but rarely pay for themselves fully. Remodeling Magazine’s 2024 Cost vs. Value Report found that the average major kitchen remodel recoups only 49–57% of its cost, not a full return. Even high-end remodels typically recoup about half their cost at resale. Additionally,
5. Postpone the Renovation
Another option for Bill and Karen is to delay the renovation until after they retire. If they can stick to their original retirement timeline and wait until they have a clearer picture of their post-retirement finances, they might find that they can complete the renovation without delaying retirement. By waiting a few years, they could let their investments grow, and they might even find that the renovation is more financially feasible once they’re settled into retirement, despite the fact that retirement income is usually fixed.
6. Talk to a Pro
Lastly, Bill and Karen could consult a fiduciary financial advisor who can help them assess the impact of the renovation on their retirement. Fiduciary advisors are legally required to act in their best interest, providing objective advice. They should look for a Certified Financial Planner (CFP) for expert guidance.
Fee-only advisors are compensated solely by clients, while fee-based advisors may also earn commissions on products sold. Opting for a fee-only advisor ensures the advice is unbiased and not influenced by commissions, helping Bill and Karen make an informed decision that aligns with their long-term goals.
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