This 403b calculator allows you to figure out how much money you can save in your 403b plan by retirement. The calculator will predict the 403b fund balance at retirement, a projection of the annual income you might expect from this type of account, as well as the percentage of final pay replaced by this fund.
The variables used in our online calculator are defined in detail below, including how to interpret the results.
This is your current age in years.
This is your expected retirement age.
This is your life expectancy when you reach your estimated retirement age. For example, at age 65, the average life expectancy is 83 years of age. Alternatively, many financial planning software tools use a more conservative value of 90 years of age.
If you currently have a 403b fund, then enter the amount in that account here. If you have not yet started funding your 403b plan, then you can simply enter zero.
This is how much you'd like to contribute, or are presently contributing, to your 403b plan stated in terms of a percentage of your salary. By increasing or decreasing your annual contribution percentage, you can see the impact on your 403b fund balance at retirement.
Most employers will match employee contributions, both to provide a benefit to employees, and to encourage participation in the company's program. If your employer matches your contribution, then enter that percentage here. If not, then enter zero.
Some employers will only match up to a certain percentage of their employee's salary. If your employer has a maximum that applies to their match, then enter that amount here. The current limit on employer matches is 6%.
This is your projected annual rate of return, which you expect to realize on your 403b fund between now and your retirement age. Once again, by increasing or decreasing the expected annual return, you can see the impact on your fund's balance.
This is the computed 403b fund growth over time, showing the fund's growth, as you grow older. This series of values takes into account your inputted growth rate, employee and employer matching, and limits your contributions to the current maximums allowed by law (2011).
For example, an employee can currently contribute up to $16,500 and the employer can match up to $8,250 on a before tax basis. At age 50, this limit increases to $22,000 for employees and $11,000 for employers. This calculator uses these contribution rules when calculating the fund's growth over time.
This is the balance you will have in your 403b fund at retirement age, if you make annual contributions to the accounts, you achieve your expected rate of return, and your employer continues to match funds at the rate you've specified.
This is your projected salary when you reach the retirement age you've indicated earlier.
This is the annual retirement income you might expect to receive from your 403b account. Keep in mind that withdrawals from 403b funds are taxable, and inflation will decrease the buying power of these future dollars.
This is the percentage of your salary at retirement age that could be replaced by your 403b funds. The rule of thumb financial planners will typically use is that all sources of retirement income should replace 70 to 80% of your final pay.
403b Savings Calculator - Copyright © 2009 - 2011 Money-Zine.com
Disclaimer: These online calculators are made available and meant to be used as a screening tool for the investor. The accuracy of these calculations is not guaranteed nor is its applicability to your individual circumstances. You should always obtain personal advice from qualified professionals.