The Ultimate Guide to Resources

Understanding Your 403b Calculator and Defining Terms

A 403b calculator allows you to estimate the amount you can save in your 403b plan when you retire. There are several types of 403b calculators these days, but they work in generally the same manner and call for generally the same information to be used in the calculation.

General 403b calculator Definitions

Current Age in Years

This is your present age in years.

Anticipated Retirement Age in Years

This is the age in years you intend to retire.

Life Expectancy in Years

This is your life expectancy as you reach your predicted retirement age.

Current Amount in 403b Fund in US Dollars

On your 403b calculator, this is where you key in the amount you have in that account. If you haven’t begun funding your 403b plan, just enter zero.

Annual Contribution to 403b (Percentage of Your Salary)

This is the amount you’d like to contribute, or are currently contributing, to your 403b plan in terms of a certain percentage of your salary. The effect of decreasing or increasing your yearly contribution percentage will be seen on your 403b fund balance on your retirement.

Employer Match (Percentage of Contribution)

Employers will typically match employee contributions in order to provide employee benefits, and to make them participate in the company’s program. If your employer does this, key in that percentage here. If not, then simply enter zero.

Employer Maximum (Percentage of Salary)

Employers will sometimes only match up to a certain percentage of the salary of their employees. If your employer has a maximum that applies to their match, that amount goes here. Employer matches are currently limited at 6%.

Expected Annual Return on 403b Fund (Percentage)

This is your predicted annual rate of return, which you are expecting to realize on your 403b fund beginning now and when your retirement comes.

403b Fund Growth Over Time (in US Dollars)

This is the computed increase in your 403b fund as you grow older. This series of figures, which are affected by your inputted growth rate and employer-employee matching, restricts your contributions to the present maximums by the law (2015) allows.

403b Fund Balance at Retirement (in US Dollars)

This is how much you will have in your 403b fund when you retire, provided if you make annual contributions and achieve your target rate of return, and your employer consistently matches funds at the rate you’ve given.

Salary at Retirement Age (US Dollars/ Year)

This is your predicted salary as you reach the retirement age you’ve specified previously.

Annual Income from 403b (US Dollars / Year)

This is the yearly retirement income your 403b account may be expected to provide you. Be aware that 403b fund withdrawals are taxable, and inflation will lower the purchasing power of these future dollars.

Percentage of Final Pay

This is the portion of your salary as you reach retirement age that could be replaced by your 403b funds. All retirement income sources need to replace 70% to 80% of your final pay as a rule of thumb. A 403b calculator sure comes in handy for this and all other related computations.

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