4 Lessons Learned: Tips

Defining Terms with Your 403b Calculator

A 403b calculator allows you to estimate the amount you can save in your 403b plan when you retire. There are many different 403b calculators today, but they work in pretty much the same manner and require pretty much the same information to be used for computation.

General 403b calculator Definitions

Current Age in Years

This is your present age in years.

Anticipated Retirement Age in Years

This is your age in years as you expect 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

If you have a 403b fund at present, then this is where you enter the amount in that account on your 403b calculator. If you have not yet started funding your 403b plan, then just enter zero.

Annual Contribution to 403b (Percentage of Your Salary)

This is how much you want to contribute, or are currently contributing, to your 403b plan expressed in terms of a specific percentage of your salary. By raising or lowering your annual contribution percentage, you can see the effect on your 403b fund balance upon 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, put that percentage here. If not, then simply enter zero.

Employer Maximum (Percentage of Salary)

Certain employers will only match up to a particular percentage of their workers’ salary. If your employer’s maximum applies to their match, put that that amount here. Employer matches are currently limited at 6%.

Expected Annual Return on 403b Fund (Percentage)

This is your expected annual rate of return, which you plan to realize on your 403b fund between today and your retirement.

403b Fund Growth Over Time (in US Dollars)

This is the computed 403b fund increase over time as you become older. This series of numbers, which is affected by employee-employer matching and your inputted growth rate, and limits your contributions to what the law (2015) currently allows.

403b Fund Balance at Retirement (in US Dollars)

This will be your 403b fund at retirement age, if you make yearly contributions to the accounts and attain your expected rate of return, and your employer keeps matching funds at your indicated rate.

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 retirement income per year you can expect to get from your 403b account. 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 at retirement age that may be replaced by your 403b funds. The rule of thumb is, all retirement income sources must replace 70% to 80% of your final pay. A 403b calculator definitely comes in handy not just for this but for all other related computations.