Finance

--- name: finance description: >- Personal finance planning — 5-pillar framework (cash flow, net worth, debt, emergency fund, investing), tax optimization, insurance review, retirement planning (FIRE, 4% rule, Mega Backdoor Roth), and document retention. license: MIT compatibility: opencode metadata: workflow: finance audience: personal version: "3.0.0" triggers: - create a budget - track spending - plan debt payoff - review investments - optimize taxes - organize financial documents - get a financial plan - retirement planning - how much to save - emergency fund - net worth negatives: - stock trading advice - cryptocurrency speculation - day trading strategies - options trading - individual stock picks

Disclaimer: Educational financial planning information. Not professional financial advice.

Workflow

Follow in order. Skip pillars already covered.

1. Assess Cash Flow

1. Calculate real monthly income (take-home after taxes, insurance, retirement)
2. Track expenses for 30 days
3. Classify into Needs (50%), Wants (30%), Savings (20%)
4. Identify surplus or deficit

2. Calculate Net Worth

1. List all assets (cash, investments, property, retirement accounts)
2. List all liabilities (credit cards, loans, mortgage, student debt)
3. Net Worth = Total Assets - Total Liabilities
4. Track monthly — direction matters more than the number

3. Eliminate High-Interest Debt

1. List all debts with balance, rate, minimum payment
2. Choose avalanche (highest rate first) or snowball (smallest balance first)
3. Attack with surplus from cash flow
4. Debt is emergency if total > 6 months income OR rate > 10%

4. Build Emergency Fund

1. Phase 1: $1,000 or 1 month (starter)
2. Phase 2: 3-6 months of essential expenses (full)
3. Phase 3: 6-12 months (conservative / irregular income)
4. Keep in HYSA only. Never invest it.

5. Invest for Retirement

1. 401(k) up to employer match → free money
2. HSA (if eligible) → triple tax-advantaged
3. IRA (Roth or Traditional) → $7,000/yr ($8,000 if 50+)
4. 401(k) up to max ($23,500)
5. Taxable brokerage → no limits

5-Pillar Framework

1. Cash Flow      → Income - Expenses = Surplus
2. Net Worth      → Assets - Liabilities = Net Worth
3. Debt           → Avalanche or Snowball
4. Emergency      → 3-6 months essential expenses in HYSA
5. Invest         → Tax-advantaged accounts first

Pillar 1: Budgeting

50/30/20 Rule

Budgeting Methods

Pillar 2: Net Worth

• Track monthly via spreadsheet or app
• Direction > absolute number
• Milestones: $0 → 3 months expenses → 1x income → 10x income

Pillar 3: Debt Payoff

Debt is emergency if: total > 6 months income OR interest rate > 10%

Pillar 4: Emergency Fund

Where: High-yield savings account (HYSA). Never invested.

Pillar 5: Investing & Retirement

Account Contribution Hierarchy

1. 401(k) up to employer match → free money, do this first
2. HSA (if eligible) → triple tax-advantaged
3. IRA (Roth or Traditional) → $7,000/yr ($8,000 if 50+)
4. 401(k) up to max → $23,500/yr
5. Taxable brokerage → no limits, less tax-advantaged

2026 Contribution Limits

3-Fund Portfolio

- US total market (VTI / FSKAX):    60-70%
- International (VXUS):             20-30%
- US bonds (BND / FXNAX):           10-20% (age - 20 = bond %)

Target expense ratio: 0.03-0.07%. Rebalance annually.

Savings Benchmarks (Fidelity)

Withdrawal Rules

• 4% rule (25x annual expenses) — traditional retirement
• 3-3.5% for early retirement / longer horizons
• RMDs start at age 73 (SECURE 2.0)

Mega Backdoor Roth

1. Check if 401(k) allows after-tax contributions + in-plan Roth rollover
2. Contribute up to $69,000 - $23,500 (elective) - employer match = after-tax capacity
3. Request in-plan Roth rollover (automatic if plan supports it)
4. Growth on after-tax is taxable if not rolled over promptly

Pro-rata rule does NOT apply to 401(k) after-tax → Roth conversions

Backdoor Roth IRA

1. Contribute $7,000 to Traditional IRA (non-deductible)
2. Convert to Roth IRA
3. Pay tax only on earnings between contribution and conversion

Pro-rata rule: if you have other Traditional IRA balances, conversion is partially taxable Fix: roll Trad IRA into 401(k) before converting

Tax Optimization

2026 Standard Deduction (estimated)

• Single: ~$15,000
• Married filing jointly: ~$30,000
• Head of household: ~$22,500

Itemize only if deductions exceed standard.

Insurance Check

Financial Document Retention

Error Handling

Production Checklist

• Income: calculated take-home (not gross)
• Expenses: tracked for ≥ 30 days
• 50/30/20: verified categories add up
• Net worth: baseline recorded
• Debt: all debts listed with rates and minimums
• Strategy: avalanche or snowball chosen
• Emergency fund: at least starter phase in HYSA
• Retirement: 401(k) match captured
• HSA: maxed if eligible
• IRA: funded for current year
• Asset allocation: 3-fund portfolio set
• Insurance: life, health, disability, auto/home reviewed
• Tax: withholding checked, prior year return reviewed
• Documents: retention schedule applied

Anti-Patterns

Sources

• IRS Publication for contribution limits 2025-2026
• Fidelity retirement savings benchmarks
• Bogleheads — 3-fund portfolio
• SECURE 2.0 Act provisions
• Kitces.com — Backdoor Roth, Mega Backdoor, tax strategies
• Morningstar — SWR research

Checklist

• Skill loads without errors in the AI agent
• YAML frontmatter is valid (description, compatibility, audience)
• Workflow section provides clear step-by-step instructions
• Error handling section covers common failure modes
• All referenced files (references/, scripts/, assets/) exist
• Skill triggers correctly for intended use cases
• No broken links or missing resources