'He grew up wealthy': My husband inherited $3 million. He wants a vacation home. I want to save for retirement.

By Quentin Fottrell

'I keep thinking about giving each child $750,000 toward a house'

"He's a partner at a consulting firm and makes about $350,000 a year. I work in healthcare administration and make $145,000." (Photo subjects are models.)

Dear Quentin,

My husband, who is 59 and an only child, recently inherited $3 million from his father. I'm 57, and we've been married since we were in our 20s. We've always kept most of our money separate, although we split the household bills and own our house together.

He grew up wealthy. His family had a big house, belonged to a country club and paid for his college and graduate school. He's always been comfortable spending money on things I think of as luxuries. My parents were middle-class and worked hard, but they never had much saved.

We both still work. He's a partner at a consulting firm and makes $350,000 a year. I work in healthcare administration and earn $145,000. We have $1.6 million in retirement accounts, a little more than half of which belongs to my husband. We owe $280,000 on our $1.1 million house.

Our daughter is 27 and a lawyer in Chicago. She makes $165,000, has a 401(k), and has a $310,000 mortgage on a condo she bought two years ago. Our son is 24 and works in software in Denver. He makes $120,000, also has a 401(k), and owes about $18,000 in student loans.

'We have a lovely home and travel several times a year.'

Neither of them is struggling, exactly. They pay their bills on time and have good careers. But neither could buy a home without taking on a large mortgage, and I worry about how long it will take them to build real wealth.

My husband wants to spend about $1.2 million on a second home somewhere warm, where we could spend the winters and have the kids and our friends come stay. He says we could invest the rest and still leave the children a lot when we die. I don't see the point.

We have a lovely home, travel several times a year, and have more than enough for the life we want. I keep thinking about giving each child $750,000 toward a house, putting another $500,000 into two investment accounts, and keeping the last $500,000 for ourselves.

I'd also be fine with smaller gifts and putting the rest toward our retirement. I just want the money to make a difference while they're young enough to benefit from it. My husband says I'm being generous with money that isn't mine to give away.

What do you think?

The Wife

Related: After 46 years working, I'm not retiring - instead, I take a vacation every month. Is that a good life in your 70s?

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.

Drawing a line between your respective backgrounds and your response to this $3 million is too easy.

Dear Wife,

Let's get the awkward stuff out of the way: the inheritance belongs to him.

That said, I think it's too easy to draw a straight line between your respective backgrounds and your reactions to the $3 million. Perhaps the difference in your upbringings plays a part. But you could just as easily go the other way: say yes immediately to the idea of a fancy holiday home, show it off to your friends and family on Instagram, and make your high school and college friends pea-green with jealousy.

But you have a more frugal outlook and wonder whether it would be better to give your two children a leg up on the property ladder - no small feat given that the 30-year mortgage rate currently exceeds 7.3% and prices are near all-time highs in many markets. It makes sense to give a chunk of money to your kids, put several other chunks aside for investments, retire in place and enjoy that passive income.

This debacle is a first-world embarrassment of riches.

But I can also see the other side of the argument, if it is an argument. You only live once, you are a happily married couple and this money is life-changing, giving you the opportunity to build something even more valuable than equity in the stock market - memories in a completely new environment where you can enjoy the company of your children and grandchildren. As the cherry on top, this property could increase in value as much, perhaps, as stocks and bonds would.

You could meet each other halfway, which is the easy option, frankly. Put $500,000 aside for your own retirement in the form of an investment account, put another $500,000 aside for your retirement in the form of that holiday home (which is also an investment, after all), and give your children $500,000 each. That still leaves you with $1 million. This debacle over your future is a first-world embarrassment of riches. That's a good thing.

Life-changing sum of money

You may not wish to retire, given that you both make healthy six-figure salaries and, I presume, enjoy your work. You are in your late 50s - your peak earning years - and you have the benefit of workplace health-insurance plans. (To state the obvious, you won't qualify for Medicare until you're 65.) What's more, you still have $280,000 left to pay on your $1.1 million home, so you may wish to clear that before planning your respective retirement parties.

With $1.6 million in retirement accounts, you could reasonably take 4% a year ($64,000) or even 4.5% ($72,000). Not bad if you didn't have any other housing expenses, especially on top of that inheritance. But it's still quite a comedown from your existing lifestyle. If you did buy a lakeside cabin (which could be as rustic or fancy as you wish), spending time there would mean spending less money on cars, restaurants and other expensive leisure activities.

The $3 million is a gift because it allows you to open up.

It may be that this money, frankly, annoys you. Your husband appears to have had an easy life, without much financial friction, given that his education was paid for by his parents. He started life on third or fourth base. Seeing him use this inheritance for a holiday home (and maybe he'll want a new car and a motorboat, too) might rub you the wrong way. It's more money for more stuff, when you should be at least pretending to care about the future.

It's a clash of personalities and priorities. It may or may not be a culture clash that pits your middle-class childhood against your husband's privileged one. You could acknowledge both the financial thriftiness and the sense of adventure that this inheritance has ignited in each of you: "I'd like to find a way to satisfy both those urges, so I can really forget about the real world when we're enjoying our second home." The $3 million is a gift because it allows you to open up.

Your $3 million windfall is a luxury, a blessing and, only if you let it, a curse.

Related: 'We lived within our means': I earned $30,000 as a pastor and still retired comfortably. Why don't you tell people that?

By emailing your questions to The Moneyist or posting your dilemmas on The Moneyist Facebook group, you agree to have them published anonymously on MarketWatch.

More columns from Quentin Fottrell:

'I'd rather be on a beach in Bali': My husband resents my $8 million net worth. Should I pay for his retirement?

'I'm never selling': I'm 47 and buy bitcoin with every dollar I earn. Am I crazy?

I'm 77, pay rent and live off Social Security, but I help homeless people. Why are so many people going hungry?

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-Quentin Fottrell

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10-07-26 0515ET