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If this is your last laptop.

I would probably go for the 32 GB (or 24GB).

My current model is a M4 Macbook Air 16GB and 256GB storage.

16GB seems to be okay and I don't feel the need for more.

But it will not be my last laptop and if things change I may upgrade to 32GB with my next purchase.
My recommendation would be to spend far less and upgrade more often. Unless you need the RAM and SSD and whatever else *now*, why would you want to spend for it *now*?

Yes, I know the AI / TimCook price increase makes that less appealing than it once did, but my money’s making 10-20% returns in index funds; I have no desire to tie it up in technology I don’t need, particularly if the M8 in 3 years time is going to be drastically better.

The math for me: $900 for base model, $1400-$1600 with all the fancy bits. But if I spend ‘just’ $900 now, I can upgrade in 4 years or so, keep $500-$700 in my pocket for a rainy day, and spend close to the same money in a few years, and get something far better. However good the M5 Air is, we all know the M8 Air will be vastly better. 🙂
 
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My recommendation would be to spend far less and upgrade more often. Unless you need the RAM and SSD and whatever else *now*, why would you want to spend for it *now*?

Yes, I know the AI / TimCook price increase makes that less appealing than it once did, but my money’s making 10-20% returns in index funds; I have no desire to tie it up in technology I don’t need, particularly if the M8 in 3 years time is going to be drastically better.

The math for me: $900 for base model, $1400-$1600 with all the fancy bits. But if I spend ‘just’ $900 now, I can upgrade in 4 years or so, keep $500-$700 in my pocket for a rainy day, and spend close to the same money in a few years, and get something far better. However good the M5 Air is, we all know the M8 Air will be vastly better. 🙂
I think the OP said it will be his last laptop.

It also depends on his age.

If the OP is 70 and plans to retire it may well be his last laptop.

If he is 50 and goes into early retirement. Hard to imagine him being there at the age of 80 with the same laptop.
 
I think the OP said it will be his last laptop.

It also depends on his age.

If the OP is 70 and plans to retire it may well be his last laptop.

If he is 50 and goes into early retirement. Hard to imagine him being there at the age of 80 with the same laptop.
If he's 70 now, unless he plans to die quite young, I suspect this won't be his last laptop (those who've made it all the way to 70 tend to live longer than the average lifespan, given that they've avoided all the other causes of death so far...). Given that, spending less and updating faster (or not!), IMHO, is still the smart move - especially if he's elderly and will (or may) need to save money.
 
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