A 403b calculator enables you to determine how much cash you can save in your 403b plan upon retirement. 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 upon reaching your anticipated 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 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 intend to contribute, or are contributing at present, to your 403b plan expressed as a 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 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, enter the 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 has a maximum applying to their match, then that amount should be entered 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 rise in your 403b fund increase over time as you become older year after year. 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 the amount you will have in your 403b fund upon retirement, if you make contributions annually, you achieve your projected rate of return, and your employer keeps matching funds at the rate you’ve indicated.
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 you can expect your 403b account to give you annually. Note that 403b withdrawals are taxable, and inflation will weaken the buying power of these dollars in the future.
Percentage of Final Pay
This is the portion of your salary at retirement age that may be replaced by your 403b funds. As a rule of thumb, all sources of retirement income have to replace 70% to 80% of your final pay. A 403b calculator sure comes in handy for this and all other related computations.