Understanding Your 403b Calculator and Terms
A 403b calculator enables you to determine how much cash you can save in your 403b plan upon retirement. 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 once you have reached your expected retirement age.
Current Amount in 403b Fund in US Dollars
If you have a 403b fund at present, then this is where you enter the amount in that account on your 403b calculator. 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. 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, key in 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 has a maximum that applies to their match, that amount goes here. Employer matches are currently limited at 6%.
Expected Annual Return on 403b Fund (Percentage)
This is your anticipated annual rate of return, which you intend to realize on your 403b fund from now to your retirement age.
403b Fund Growth Over Time (in US Dollars)
This is the computed 403b fund increase over time as you become older. This series of values is influenced by your inputted growth rate and employee-employer matching, and confines your contributions to the present maximums the law (2015) permits.
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. All retirement income sources need to replace 70% to 80% of your final pay as a rule of thumb. A 403b calculator sure comes in handy for this and all other related computations.