Discovering The Truth About Retirements

Understanding Your 403b Calculator and Defining 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 as you reach your predicted 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 the amount you’d like to contribute, or are currently contributing, to your 403b plan in terms of a certain 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)

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. Otherwise, then 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 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 403b fund increase over time as you become older. 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 yearly retirement income your 403b account may be expected to provide you. Remember that withdrawals from 403b funds are taxable, and inflation will reduce the buying power of such 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 definitely comes in handy not just for this but for all other related computations.