A Beginners Guide To Funds

Understanding Your 403b Calculator and Defining 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 upon reaching your anticipated 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. 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 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, put that percentage here. Otherwise, just 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 applying to their match, then that amount should be entered 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 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 estimated salary upon reaching the retirement age you’ve earlier specified.

Annual Income from 403b (US Dollars / Year)

This is the retirement income per year you can expect to get from your 403b account. Note that 403b withdrawals are taxable, and inflation will weaken the buying power of these dollars in the future.

Percentage of Final Pay

This is the portion of your salary as you reach retirement age that could be replaced by your 403b funds. The rule of thumb is, all retirement income sources must 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.

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