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August 12, 2017


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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 lots of 403b calculators nowadays, but they work in a rather similar manner and require rather similar pieces of information to be used in the 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 have not started your 403b funding yet, you can 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. 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, enter the percentage here. Otherwise, just 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’s maximum applies to their match, put that that amount 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 estimated salary upon reaching the retirement age you’ve earlier specified.

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 portion of your salary at retirement age that may be replaced by your 403b funds. 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.