upgrade path for soon-to-be retiree on a budget

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A friend has an audiophile setup which is truly astounding —it's like Sam Phillips is sitting on a stool six feet away and singing of martinis and bikinis— but I'm on a budget and about to retire and I'm looking for a modest ($700) "birthday-present" upgrade to our current system, which is a pair of Henry Kloss Cambridge Soundworks M50 bookshelf speakers, a CS powered subwoofer, a Yamaha NS-C210 center channel speaker, and two tiny CS Henry Kloss Surround IV cubes about the same size as the foam dice you used to see hanging from rearview mirrors. Would I do better to keep the subwoofer and center-channel and get a pair of 2-way speakers, or ditch the center channel and subwoofer and get a pair of 3-way speakers? Most of the time I just want to hear what the actors in a movie are saying. But sometimes, sometimes, like when listening to a Beethoven or Shostakovitch symphony, or My Life in the Bush of Ghosts, I want to crank the volume up to a truly immersive level.
 
You could just keep what you have been happy with for so long and buy a really good pair of headphones. That will give you all the immersive sound you want. Then maybe, at your leisure, look to swap out individual bits for good second hand stuff, piece-meal, if you get my meaning.

There are some real gems to be had, second-hand which don't cost an arm and a leg. Rather than empty your retirement pot in one hit and regret what you spent it on.
 
As the OP seems to be in USA then for that money a 10 year old pair of Magneplanar speakers should be doable (half the price and much more common than they are in UK). A decent and quite high power amplifier would be needed.... Adcom, Hafler to the rescue there.
 
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