Understanding Your 403b Calculator and Terms
A 403b calculator lets you to compute how much money you can save in your 403b plan when your retirement comes. 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 the age in years that you plan 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 haven’t begun funding your 403b plan, 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. Otherwise, then enter zero.
Employer Maximum (Percentage of Salary)
Employers will sometimes only match up to a certain percentage of the salary of their employees. If your employer has a maximum that applies to their match, that amount goes here. The present limit on employer matches is 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 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 expected salary when you come to the retirement age you’ve previously indicated.
Annual Income from 403b (US Dollars / Year)
This is the yearly retirement income your 403b account may be expected to provide you. 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 part of your salary upon retirement age that could your 403b funds can replace. As a rule of thumb, all sources of retirement income have to replace 70% to 80% of your final pay. A 403b calculator certainly comes in handy for this and all other related calculations.