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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 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

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 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 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)

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. If not, then simply enter zero.

Employer Maximum (Percentage of Salary)

Certain employers will only match up to a particular percentage of their workers’ salary. If your employer’s maximum applies to their match, put that that amount 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 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 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 retirement income you can expect your 403b account to give you annually. 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.

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