How have you decided when it’s worth it to fix an old car?
Rick Connor | May 23, 2025
My 2014 Honda Accord recently hit 99,000 miles. It’s nothing fancy to look at, but it drives well. Recently I’ve been having an issue with the starter. The push start works intermittently. Sometimes it starts on the first push, sometimes it takes multiple tries. I think the most it has taken is 6 tries. I’ve kept up with the maintenance, but I drive it infrequently, so the time between service has spread out. It was due for an oil change, so I decided to have the starter checked out. Long story short the car needed a new starter. It also needed brake work, new calipers, and a few other things. The total cost (after some discount coupons) was about $2,500. I elected to have the car repaired and plan to drive it for a while. It’s a reliable second car. But it got me thinking about the age-old question of when is it worth it to repair an old car? I did some research and the Kelley Blue Book private sale value ranged from about $9,800 to $11,900, depending on the condition. Carvana had similar cars for sale in the $16,500 range. So, the repairs are at most 25% of the car’s private sale value. I checked a few sources on the web and a general rule of thumb indicated that if the repair was more than 50% of the car’s value, it’s not worth it. I also found recommendations that said it was worth it if the repair cost was below the total value of the car. Obviously, there are a number of considerations in this decision, many of them personal. Is the car generally safe and reliable? Are there likely to be other major repairs coming soon? Does your wife hate the car? Is it the ugliest car…
Read more » Paid to Wait
Richard Connor | Jun 6, 2022
ARE YOU IN YOUR 60s and worried about rising consumer prices? It’s worth understanding how inflation affects Social Security benefits—especially its impact on those who postpone claiming their monthly check. Social Security benefits jumped 5.9% in 2022, thanks to the annual cost-of-living adjustment. This inflation increase was based on the Bureau of Labor Statistics’ CPI-W. This was the largest adjustment since 1982, and it affected nearly 64 million retirees. The increase took effect in January. Based on current inflation, another significant increase is also predicted for 2023. Several other Social Security limits also rose in 2022. For workers, the maximum amount of earnings subject to the Social Security payroll tax climbed to $147,000. For those in their 60s, the earnings limit—the amount of earned income that folks receiving benefits can collect before their Social Security check is reduced—also increased. This earnings limit kicks in if you’re younger than your full retirement age (FRA), which is age 66 or 67, depending on the year you were born. Social Security defines full retirement age as the age when you’re eligible for an unreduced retirement benefit. For people younger than their FRA in 2022, the earnings limit increased to $19,560. For people who reached their full retirement age in 2022, it rose to $51,960. If your earned income is above these thresholds, your benefit is reduced. Interestingly, these values didn’t rise by the same 5.9%. The maximum income subject to payroll taxes increased 2.94%, the pre-FRA earnings limit rose 3.16% and the FRA year earnings limit rose 2.85%. The increase in these values is based not on CPI-W, but on changes to the National Average Wage Index, which increased 2.83% for 2020, the latest year for which data are available. Although my wife and I are now eligible for Social Security, we’ve decided to…
Read more » Refi or Not?
Richard Connor | Aug 10, 2020
MY WIFE AND I BOUGHT our first home in the mid-1980s. We were thrilled to get an 8% mortgage, though we had to pay three points—an upfront fee equal to 3% of the loan amount—to get that rate. Many of our friends had bought a few years earlier and were paying 14%, a common occurrence back then, according to Freddie Mac data. We kept our eyes open for opportunities to refinance our high rate. If I recall correctly, the prevailing rule of thumb said you needed a two-percentage-point reduction in interest rate—and you might need to stay in the home for another seven years—for a refinancing to make sense. How times have changed. My son and daughter-in-law purchased a home in May 2019. Thirty-year mortgage rates were 4.125%. When my wife and I bought our current vacation house in November 2019, rates had fallen to 3.375%. Now, they’re down around 3%. At these low rates, the two-percentage-point rule no longer makes sense. A little internet research indicates that a one-point reduction is the new rule of thumb. What about paying points to get an even lower rate? You rarely hear about that these days. There’s a number of reasons to consider refinancing—including these four: Reduce your monthly payment. This is the No. 1 reason people refinance. A lower interest rate leads directly to a lower monthly principal-and-interest payment, assuming you opt for a mortgage of the same length. Switch from an adjustable-rate to a fixed-rate mortgage. Adjustable-rate mortgages, or ARMs, can reset to a higher rate, sometimes leaving homeowners with payments they can’t afford. If you plan to stay in your home, you may want to refinance into a stable, fixed-rate loan. Reduce the term of your mortgage. If rates drop enough, it may make sense to switch from a…
Read more » Cheat Sheets
Richard Connor | Feb 25, 2020
WHEN MY YOUNGEST son graduated college, he had two solid job offers. One would have allowed him to live at home for free and the other was halfway across the country. Guess which one he picked? In fairness, the job far from home was more interesting to him and provided a great start to his career. I remember him sitting down with his mother and me, and telling us he was planning to move to Texas. We discussed the job, benefits and salary. Then he asked a question I’ll never forget: How do I know this is enough to live on? I was working in the same industry, so I knew it was a good offer. But that doesn’t tell you what it takes to live in a different part of the country. I asked him to give me a few days to look into it. My first instinct was to create a budget in Excel and research costs in the Dallas-Fort Worth region. But instead, I searched for existing budget templates—and discovered Microsoft had templates available for free on the web. I downloaded a monthly budgeting template and got to work. It was logically constructed and easy to use. My son is an IT professional, tech savvy and way smarter than me, so I knew he would easily take to it. It had defined income and expense sections. The expense section was broken down into useful categories and easily customized. Being an engineer, I had to improve it. I added a separate worksheet that mimicked his future paystub, so he could see the impact of taxes, 401(k) contributions and other deductions—such as those for medical and dental insurance—on his take-home pay. I sent it to my son, and he added data on housing costs, utilities and so on. It showed…
Read more » Should you include SS and pensions in your net worth?
Rick Connor | Aug 1, 2024
A recent comment in the Forum got me thinking about the inherent value of certain fixed income instruments. The commenter said they did not include their traditional pension or Social Security retirement benefit in their balance sheet when calculating net worth. This makes sense since neither of these is easily convertible to cash. But pensions and SS clearly have significant value, and in many cases are the largest asset a retiree owns. I think it’s useful to get a feel for these amounts. You can compare them to your retirement savings and see how they stack up. There are several ways to do this. You could build a spreadsheet using the Present Value function with appropriate variables. You could price a commercial annuity that would provide the same monthly benefit. Or you could take advantage of Mike Piper’s Open Social Security tool – he’s done all the work for you. Let’s consider someone who was born in 1957. Their full retirement age is 66 years and 6 months. In January 2024, the average Social Security monthly retirement benefit was $1,907. The maximum benefit for someone retiring in 2024 at their Full Retirement age is $3,822. The average expected longevity of our retiree is about 16 years for a man, or 19 years for a woman. The table below shows the results from Open Social Security. The current value of future social security payments for an average benefit is about $320,000 for men, and $372,000 for women. For men and women receiving the maximum benefit, the current value is about $640,000 and $746,000. Men Women Men Women Monthly Payment $1,907 $1,907 $3,822 $3,822 Open SS PV Estimate $319,641 $372,060 $640,623 $745,681 Pensions often have a lump sum option. When this is available, you have a direct estimate of the present…
Read more » Four Decades Later
Richard Connor | Jun 15, 2022
LAST MONTH MARKED 40 years of wedded bliss for my wife and me. I’m amazed at how fast the time has gone. I still remember the day we met. It was at a party celebrating her high school graduation. I gave her a ride to pick up a pack of cigarettes, all the while lecturing her on the dangers of smoking. I believe I saved her from a lifetime of smoking. She saved me from everything else. We’ve been blessed these past 40 years with a large and wonderful family, friends, great careers and now the chance for a happy retirement. We’ve had our challenges for sure, including early financial struggles, family troubles, illnesses, elder care and career hiccups. Through it all, we worked together and got through the tough times. I’ve heard it said that love and a long-lasting marriage are a choice. I know there were many days my wife woke up, and decided to stay in love and married to me, even though she may not have liked me very much that day. Both of our parents had long marriages. They were hardly perfect, but they showed what it meant to stay faithful and committed, despite lots of flaws and challenges. This shaped my wife and me, and seems to have rubbed off on our two sons. They both married fantastic women—beautiful, strong, smart, loving, independent. Just like their mother. They have given us near-perfect grandsons—grandpas can say such things—and they’re excellent parents. We couldn’t be more proud. Lest you fear that I’ll keep waxing poetic about marriage, let me be a bit more prosaic—and mention the economic benefits: Cost of living. They say two can live more cheaply than one. Sharing a home, utilities and real estate taxes helps reduce a couple’s per-capita expenses. In my…
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Adam M. Grossman is the founder of Mayport, a fixed-fee wealth management firm. Sign up for Adam's Daily Ideas email, follow him on X @AdamMGrossman and check out his earlier articles.
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