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 that you plan 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 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. 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 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 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 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. 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. 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.