I'm 63 and spending $95,000 on a roof deck for my $500,000 home. Am I being extravagant?

By Quentin Fottrell

'I have a net worth of $2.3 million and my only debt is a 15-year mortgage'

"I have always wanted to create a way to access the patio directly from the kitchen." (Photo subject is a model.)

Dear Quentin,

I am 63 and work part-time. I have a net worth of $2.3 million, and my only debt is a 15-year mortgage with an outstanding balance of $295,000. My house, which was built in 2000, is worth $500,000, the median value for my area. I bought it in 2020, and my boyfriend pays rent.

The house has a tiny balcony and a walkout patio overlooking a yard and a pond. I have always wanted to create a way to access the patio directly from the kitchen, and I plan to stay in this house for the next couple of decades.

I recently received a quote from a reputable construction company to build a roof extension, a screened porch, a deck and a staircase. The total cost would be $95,000 if I opted for all the premium materials.

My boyfriend says he wouldn't spend that much on the project, but that if it would make me happy, I should go ahead. First and foremost, it would make me happy. I have two cats, and I think we would all enjoy having a screened porch.

I've also read that porches and decks in my area can recoup 80% of their construction costs in increased home value. What do you think? Am I being sensible, or am I spending too much on a home improvement project? What other financial priorities should I have?

House Proud

Related: 'I have no financial safety net': I'm 66, rely on Social Security and have just $500 in savings. What hope do I have?

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

Make sure that the stairs are "future-proofed" for your 73- and 83-year-old selves in terms of safety.

Dear Proud,

The logistics may take some finessing, but your overall finances are solid.

If you can't have the house you want at 63 with a $2.3 million net worth and $295,000 left on your mortgage, we should all pack up and go home (hopefully, to a home that suits our needs and is relaxing to spend time in). It's not a small renovation either from a financial or a disruption perspective, but you have lived there long enough to know what you want.

You have three questions to answer: (1) Where will the $95,000 come from? (2) Can you afford to take this money from your savings? (3) Will you get the value of this investment back if you decide to sell your house? Based on multiple reports on wooden roof decks, they can attract buyers and provide a meaningful return on investment, especially in warmer climates.

Still, I recommend taking such estimates with a grain of salt. If you plan to stay in your house for another 20 years, your $95,000 renovation works out to $4,750 a year, excluding maintenance and the opportunity cost of spending that money. In other words, you are investing $4,750 a year to improve your quality of life.

Your $95,000 renovation works out to $4,750 a year over 20 years.

Let's say your mortgage is $3,500 a month and your boyfriend pays $1,500; that leaves you with $2,000 a month to pay. If you add in Social Security, when you choose to take it, it could cover your mortgage, based on the average Social Security check. Your boyfriend's rent is not, strictly speaking, guaranteed income, but I assume you could find a lodger if you needed one.

In retirement, I want you to be financially comfortable and comfortable in your home. I'll deduct your mortgage from your net worth. If you withdrew 4% of a $2 million portfolio every year - a percentage generally recommended by advisers, and adjusted for inflation in subsequent years - you would have roughly $6,600 a month to supplement your income.

You are right not to scrimp on materials or workmanship, especially when it comes to a roof extension, deck and stairs. Make sure the stairs are "future-proofed" for your 73- and 83-year-old selves in terms of safety, materials, guardrails and gradient, especially considering that you are planning to stay in this house for the foreseeable future.

Don't miss: 'He was heartbroken': My husband's kids abandoned him when he was dying. Was he right to leave everything to me?

Future-proofing the staircase

Staircases are a source of accidents. More than 1 million people visit emergency rooms each year for stair-related injuries, with young children and older adults more likely to injure themselves this way, according to a study in the American Journal of Emergency Medicine. Women are injured more often than men. Older adults are also more likely to suffer fractures.

If you are indeed planning to stay another 20 years and age in place, make sure you address issues like slip-resistant decking, properly designed handrails, good lighting on the stairs and access to your patio, comfortable stair-riser heights and tread depths, proper drainage and weather protection, and even space for a ramp or alternative access.

So make sure you are completing renovations that will take your existing and future self into account. This new roof deck and stairs to your patio below may be an opportunity to fix other issues with your house. For example, you may wish to have a downstairs bathroom if you don't have one already, or make other adjustments to benefit you in 10-plus years.

Address issues like guardrails, adequate lighting and slip-resistant decking.

There are a few things missing from your letter. Do you have an emergency fund of 12-24 months that would get you through unexpected medical expenses, home repairs, a downturn in the market or a period without rental income? How much of your net worth is in traditional versus Roth accounts? When do you expect to collect Social Security? Now? At 67? 70?

It's a good time for Roth conversions before your required minimum distributions kick in at 75; you may have a tax window now that you're working occasionally and/or part-time, depending on your filing status and tax bracket. Roth conversions make sense during low-income years to reduce taxes on your RMDs, and with a $2.3 million net worth, you have some leeway.

You can convert a portion of your traditional IRA or 401(k) each year when it suits you, or even make multiple conversions throughout the year, while staying within your desired tax bracket. Good times to make such a decision are later in the year, when you know exactly how much income you have for the tax year, and/or during a market downturn.

Your deck dilemma provides an opportunity to explore other financial questions.

Related: My 93-year-old father changed his will at the 11th hour, leaving my brother his entire $500,000 estate. Can I challenge it?

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:

'Just watch Judge Judy': I'm in my 70s. Why do people keep making the same avoidable financial mistakes?

'It feels like he's quietly building a separate life': My husband inherited $500,000, but he refuses to spend it on our home

'I have $400,000 in equity': I'm 80. Should I sell my house because of dangerous stairs - or spend thousands renovating?

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-Quentin Fottrell

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11-12-26 0945ET