Understanding Your 403b Calculator and Terms

A 403b calculator allows you to estimate the amount you can save in your 403b plan when you retire. There are lots of 403b calculators nowadays, but they work in a rather similar manner and require rather similar pieces of information to be used in the computation.

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 that you plan to retire.

Life Expectancy in Years

This is your life expectancy once you have reached your expected retirement age.

Current Amount in 403b Fund in US Dollars

On your 403b calculator, this is where you enter the amount in your account. 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. 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 usually match employee contributions to provide employees benefits, as well as to encourage their participation in the company’s program. If your employer does this, put that percentage here. Otherwise, then enter zero.

Employer Maximum (Percentage of Salary)

There are employers that only match up to a specific percentage of their employee’s salary. If your employer’s maximum applies to their match, put that that amount here. Six percent is the current limit on employer matches.

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 403b fund increase over time as you become older. This series of values is influenced by your inputted growth rate and employee-employer matching, and confines your contributions to the present maximums the law (2015) permits.

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 retirement income per year you can expect to get from your 403b account. Remember that withdrawals from 403b funds are taxable, and inflation will reduce the buying power of such future dollars.

Percentage of Final Pay

This is the portion of your salary at retirement age that may 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 certainly comes in handy for this and all other related calculations.