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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 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 enter the amount in your account. If you haven’t begun funding your 403b plan, just enter zero.

Annual Contribution to 403b (Percentage of Your Salary)

This is how much you intend to contribute, or are contributing at present, to your 403b plan expressed as a 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, enter the 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. 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 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 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 expected salary when you come to the retirement age you’ve previously indicated.

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 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 certainly comes in handy for this and all other related calculations.