A Brief History of Tips

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 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 your age in years as you expect 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 started your 403b funding yet, you can 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. If you increase or decrease your annual contribution percentage, you will see the impact of such action on your 403b fund balance as you retire.

Employer Match (Percentage of Contribution)

Majority of employers will match employee contributions to provide them benefits, and to encourage them to participate in the company’s program. If your employer does this, put that percentage here. If not, then simply 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 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 part of your salary upon retirement age that could your 403b funds can replace. The rule of thumb is, all retirement income sources must replace 70% to 80% of your final pay. A 403b calculator certainly comes in handy for this and all other related calculations.