fire-calculations

name	fire-calculations
description	Computes FIRE readiness metrics from a user's financial snapshot — savings rate, savings leak, FIRE number, time to FI, and lever scenarios (extra savings / shifted retirement age / different lifestyle). Use this skill whenever the fire-ready interview has finished collecting data and needs the numbers computed for the snapshot. Pure functions — no conversational logic.

FIRE Calculations

Compute the numerical outputs for the FIRE Ready snapshot. Pure functions. No conversation.

If a code execution tool is available in the runtime, use it for the time-to-FI calculation — iterative numerical solving is more reliable than algebraic rearrangement done by hand. If not, compute year-by-year and report the year the portfolio crosses the FIRE number.

Input

A populated snapshot data model from the fire-ready skill (see fire-ready/SKILL.md for the full shape).

Output

{
  "savings_rate_percent": number,
  "current_monthly_savings_gbp": number,
  "monthly_capacity_gbp": number,
  "leak_gbp_per_month": number,
  "fire_number_gbp": number,
  "current_portfolio_gbp": number,
  "projected_fi_age": number,
  "high_interest_debt_total_gbp": number,
  "high_interest_blended_apr": number,
  "leak_caveat_required": boolean,
  "leak_low_confidence": boolean,
  "negative_savings_rate": boolean,
  "levers": {
    "extra_savings_200": { "new_fi_age": number },
    "extra_savings_500": { "new_fi_age": number },
    "retire_5_years_later": { "delta_years_to_target": number },
    "downshift_lifestyle": {
      "new_fire_number_gbp": number,
      "delta_gbp": number,
      "new_target_band": "modest" | "comfortable"
    }
  }
}

Formulas

Savings rate and leak

total_spending = sum(spending categories)
monthly_capacity = monthly_net_income - total_spending
current_monthly_savings = explicitly captured if available, else assume 0
savings_rate_percent = (current_monthly_savings / monthly_net_income) * 100
leak_gbp_per_month = monthly_capacity - current_monthly_savings

If monthly_capacity < 0: set negative_savings_rate = true. Don't proceed with FIRE projections as if they're meaningful — the report-generator will surface this as a critical insight instead.

FIRE number

Lifestyle band → annual spend mapping (MVP):

• modest → £18,000/year
• comfortable → £30,000/year
• generous → £50,000/year

If the user gave an explicit target_annual_spend_gbp, use that; otherwise use the band mapping.

fire_number_gbp = target_annual_spend_gbp * 25

Current portfolio

Liquid wealth that compounds toward FIRE — excludes property equity (not income-producing in the same way and creates accommodation cost confusion if drawn down).

current_portfolio_gbp = cash_savings + isa + pension + investments

Projected FI age

Use a 5% real annual return assumption (conservative post-inflation expectation for a global equity portfolio).

Solve for years n such that:

current_portfolio * (1+r)^n + monthly_savings * 12 * ((1+r)^n - 1) / r = fire_number

Where:

• r = 0.05
• monthly_savings = current_monthly_savings (project at their actual rate, not aspirational capacity)

projected_fi_age = current_age + n

If current_monthly_savings = 0 and current_portfolio = 0: projected_fi_age = "never at current rate". Surface this honestly — the lever panel becomes the main story.

If n > 100: same — report as "not reachable at current rate". Don't print a meaningless 200-year projection.

High-interest debt

high_interest_debts = filter(liabilities, d => d.apr_percent > 10)
high_interest_debt_total_gbp = sum(d.balance_gbp for d in high_interest_debts)
high_interest_blended_apr = sum(d.balance * d.apr) / sum(d.balance)
leak_caveat_required = high_interest_debt_total_gbp > 0

Low-confidence flag

low_conf_count = count(spending categories with confidence == "low")
leak_low_confidence = low_conf_count > 3   // more than half of 7 categories

Levers

Three scenarios. Each holds everything else constant and varies one input.

Lever 1 — Extra savings (£200/month and £500/month)

Recompute time-to-FI with monthly_savings + 200 and again with monthly_savings + 500. Report new projected FI age for each.

levers.extra_savings_200.new_fi_age = current_age + solve_n(monthly_savings + 200, ...)
levers.extra_savings_500.new_fi_age = current_age + solve_n(monthly_savings + 500, ...)

Lever 2 — Retire 5 years later

This lever frames "what if you accept retiring 5 years later than your target". Compute the gap between projected FI age and (target_retirement_age + 5):

levers.retire_5_years_later.delta_years_to_target = projected_fi_age - (target_retirement_age + 5)

If positive: still a gap even with the extra 5 years. If zero or negative: pushing 5 years closes the gap entirely. The report-generator will phrase this contextually.

Lever 3 — Downshift lifestyle by one band

Compute new FIRE number for the band one step lower:

• generous → comfortable
• comfortable → modest
• modest → modest (no further downshift; report null and let report-generator hide the row)

new_target_band = downshift(goals.target_lifestyle)
new_target_annual_spend = band_to_annual(new_target_band)
new_fire_number_gbp = new_target_annual_spend * 25
delta_gbp = fire_number_gbp - new_fire_number_gbp

Output rounding

• £ figures: round to nearest £100. (FIRE numbers can be rounded to nearest £1,000.)
• Percentages: round to nearest 0.5%.
• Ages: round to nearest year.
• APRs: round to nearest 0.5%.

Sanity checks before returning

• If leak_gbp_per_month is negative (user is saving more than capacity suggests, e.g., they reported some saving but their stated spending leaves no surplus): set leak_gbp_per_month = 0 and flag in a comment. This usually means the user under-reported some spending category, and the negative leak is a calculation artefact.
• If fire_number_gbp < 100,000: double-check the lifestyle band wasn't entered as a per-month figure. £18k/year is realistic; £18k FIRE number is not.
• If projected_fi_age < 30: double-check the inputs — almost certainly something was input wrong.