What’s missing from this is medical costs. His income in CA (where I live) would make him eligible for Medi-Cal. If that’s how he’s obtaining medical care, good for him. If not, then he should apply.
He’s young and healthy…for now. One accident could change that. As he grows older, what’s the plan for medical costs?
Agreed. We solved for his current year cap on spending. How he allocates is his choice. At his age, Mike may see the premium as avoidable….I hear what you are saying, though.
At his current income level, his eligibility for Medi-Cal most likely would be without a premium. (Source: my years working in health insurance and helping a couple of family members apply for Medi-Cal.) Take the opportunity now. However, I understand young people (more so men than women) are willing to take the risk to go without health insurance. I get it.
Mike isn't in a good position, and the answer isn't for him to save more. He's paid too little. I'm not familiar with the cost of living where he is -- my mortgage payment is less than half of what he pays for rent, because central Illinois is a different world. I'm willing to concede he may not be able to find a cheaper place to live in his area (although I'd definitely try to get a roommate. Easier said than done to find a reliable person, though.)
Even so, it's also true that his wages are higher than what I made running a newsroom less than a decade ago. So even if he were to move to a place with a lower cost of living, that won't help him because his pay will be slashed to about half as much.
Even if he eats from dumpsters so he can stop buying food, the little bit he can save isn't going to be enough to allow him to invest anything meaningful for his retirement.
He's not in a good position. He's not going to be able to pay for his retirement unless something changes quite dramatically.
To tell someone whose entertainment budget for the year is $180 that he needs to cut spending is, quite frankly, cruel.
Mike is in California. What may not be apparent is his reported living standard is sustainable. It captures his current financial attributes, human capital, Social Security retirement benefits (under current law), and taxes (under current law).
Mike would automatically increase his living standard by moving to a lower cost state, take on a roommate, etc…..there are a bunch of opportunities that can be scenarios considered.
What’s missing from this is medical costs. His income in CA (where I live) would make him eligible for Medi-Cal. If that’s how he’s obtaining medical care, good for him. If not, then he should apply.
He’s young and healthy…for now. One accident could change that. As he grows older, what’s the plan for medical costs?
Agreed. We solved for his current year cap on spending. How he allocates is his choice. At his age, Mike may see the premium as avoidable….I hear what you are saying, though.
At his current income level, his eligibility for Medi-Cal most likely would be without a premium. (Source: my years working in health insurance and helping a couple of family members apply for Medi-Cal.) Take the opportunity now. However, I understand young people (more so men than women) are willing to take the risk to go without health insurance. I get it.
Mike isn't in a good position, and the answer isn't for him to save more. He's paid too little. I'm not familiar with the cost of living where he is -- my mortgage payment is less than half of what he pays for rent, because central Illinois is a different world. I'm willing to concede he may not be able to find a cheaper place to live in his area (although I'd definitely try to get a roommate. Easier said than done to find a reliable person, though.)
Even so, it's also true that his wages are higher than what I made running a newsroom less than a decade ago. So even if he were to move to a place with a lower cost of living, that won't help him because his pay will be slashed to about half as much.
Even if he eats from dumpsters so he can stop buying food, the little bit he can save isn't going to be enough to allow him to invest anything meaningful for his retirement.
He's not in a good position. He's not going to be able to pay for his retirement unless something changes quite dramatically.
To tell someone whose entertainment budget for the year is $180 that he needs to cut spending is, quite frankly, cruel.
Mike is in California. What may not be apparent is his reported living standard is sustainable. It captures his current financial attributes, human capital, Social Security retirement benefits (under current law), and taxes (under current law).
Mike would automatically increase his living standard by moving to a lower cost state, take on a roommate, etc…..there are a bunch of opportunities that can be scenarios considered.
Much of my Substack work is rolled up and easier to view here https://www.finplanllc.net/personal-finance-economics.