Even if Jim loses his job this year, they may be able to have their house and keep their standard of living, says Bedda D'Angelo, a planner in Durham.

Jim would get a buyout of one year's pay; he's also guaranteed a $2,000-a-month pension. Assuming they put $300,000 on a custom home, the payment for a $350,000, 30-year mortgage at 6 percent is more than $2,000 a month.

That should be fine if Jim works till age 63, which he plans to do even if at another company. Later "the combination of his pension and their Social Security will cover basic living expenses and the mortgage," says D'Angelo.

But they must use more savings to stay at $100,000 a year. As an alternative, they might look at an existing home, which would knock the price to $400,000 and the mortgage to $1,200 a month.

Whether or not they build, they must make their investments work harder to ensure that they'll be able to maintain their lifestyle for the next 30-odd years, says D'Angelo.

Now 18 percent of their portfolio is in costly mutual funds; 15 percent is in bank money-market funds. They should transfer their investments to no-load, low-fee funds; all but $50,000 of their money market should go into diversified stock and bond funds; the rest, in a lowcost tax-free money market.

Says Jim in response: "We're happy to scale back a bit. We're not putting aside our dream to build just yet, but we are going to look at existing homes."