Decision: [One-sentence framing] Time Horizon: [X] years Generated on: [Date]
WARNING: For educational/informational purposes only. Does not constitute financial advice.
Executive Summary
Recommendation: [Scenario A or B] — [reason in one sentence] Confidence: [High / Medium / Low] Determining Factor: [The single number that tips the decision]
Scenario A: [Name]
Assumptions:
- [List each assumption with its value]
10-Year Projection:
| Year | Cash Outflow | Assets/Value | Cumulative Net Income |
|---|---|---|---|
| 1 | $X | $Y | $Z |
| 5 | $X | $Y | $Z |
| 10 | $X | $Y | $Z |
Total Cost (10 years): $X Final Value: $Y Net Position: $Z
Scenario B: [Name]
[Same structure as Scenario A]
Side-by-Side Comparison
| Metric | Scenario A | Scenario B | Winner |
|---|---|---|---|
| Total Cost (10 years) | $X | $X | A/B |
| Final Value | $X | $X | A/B |
| Net Position (10 years) | $X | $X | A/B |
| Monthly Cash Flow | $X | $X | A/B |
| Opportunity Cost | $X | $X | A/B |
| Tax Impact (annual) | $X | $X | A/B |
| Liquidity (1–10) | X | X | A/B |
| Concentration Risk | X | X | A/B |
| Reversibility | X | X | A/B |
Opportunity Cost Analysis
If the higher-cost scenario costs $X more per month, investing that difference at a 7% real return over 10 years would result in $Y.
That's the real cost of choosing [scenario].
Risk Profile
Scenario A Risks:
- [Specific risk + magnitude]
- [Specific risk + magnitude]
Scenario B Risks:
- [Specific risk + magnitude]
- [Specific risk + magnitude]
Break-Even Analysis
Scenario A becomes cheaper than B in year [N], if [assumption holds]. Scenario A becomes WORSE than B if [trigger condition].
Sensitivity Analysis
What would change the answer?
| If This Variable Changes | Recommendation Reverses To |
|---|---|
| Stock returns < 4%/year | [Scenario] |
| Real estate appreciation < 2%/year | [Scenario] |
| Change of residence within 5 years | [Scenario] |
| Tax rate change | [Scenario] |
Recommendation
Choose [Scenario A or B].
Reasoning:
- [Primary reason with number]
- [Secondary reason]
- [Tie-breaker criterion]
Notes:
- [What would change this decision]
- [Personal preference factor]
Actions for This Week
- [Specific concrete action]
- [Specific concrete action]
- [Specific concrete action]
WARNING: For educational/informational purposes only. Does not constitute financial advice. Consult a licensed financial advisor, CPA, or tax professional before making major financial decisions. All projections depend on assumptions that may not hold. Past performance does not guarantee future results.
Common Pitfalls to Avoid
- Do not ignore taxes — The choice between Roth and Traditional changes completely depending on the future vs. current tax rate
- Do not ignore transaction costs — Buying a home incurs selling costs of ~6% later
- Do not count appreciation twice — If you assume 7% returns, don't also assume 7% real estate appreciation (real estate is closer to 3-4% over the long term)
- Do not ignore behavioral factors — Forced savings through a mortgage may outperform "invest the difference" if the user doesn’t actually invest
- Do not assume linear costs — Cars depreciate nonlinearly; homes have irregular maintenance costs
Scenario-Specific Models
Buy vs. rent
Track: mortgage principal and interest, property tax, insurance, maintenance, opportunity cost of the down payment, versus rent + investing the down payment. Tipping point: years spent in the home. Less than 5 years generally favors renting.
Pay Off Mortgage vs. Invest
Compare the mortgage APR (after the tax deduction) with the expected market return. If the mortgage is 7% and the expected return is 7%, the guaranteed return wins.
Roth vs. Traditional
Compare your current marginal tax rate with the expected rate in retirement. Higher now → Traditional. Lower now → Roth.
New Job vs. Staying
Factor: pay gap, stock compensation, retirement match, benefits cost difference, commute, career trajectory.
WARNING: For educational/informational purposes only. This does not constitute financial advice.
--- skills/finance-retirement/SKILL.md ---
name: finance-retirement description: Retirement projection with Monte Carlo simulation logic. Calculates the required nest egg using the 4% rule and 25x expenses, projected-to-needed gap, contribution recommendations, age-based asset allocation, Social Security claiming optimization, healthcare cost projections, and withdrawal sequence planning. Use when the user says "/finance retirement", "am I on track for retirement", "how much do I need to retire", "Social Security timing", or asks any question about retirement.