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Predicting what a 403(b) retirement account will eventually be worth is challenging. There are a lot of variables to take into account that can make a huge difference in the growth of your nest egg. There's not only your annual contributions and return on investment to consider, but also investment fees, expected salary increases, employer contributions, years to retirement and more. While it's nearly impossible to predict the exact performance of your retirement account, this 403(b) Savings Calculator can help you nail down a good ballpark figure or a range of best- to worst-case scenarios for the growth of your 403(b) account up through your retirement. It also lets you see how making certain changes, like increasing contributions or working longer, will affect the eventual size of your retirement account and guide you in making financial decisions.
403(b) plans are a type of defined contribution retirement account available to certain employees of schools and various nonprofit organizations, including hospitals, charities and members of the clergy. They're almost identical to 401(k) plans, which are the type used in the for-profit sector, with a few differences. The main differences are that 403(b)s may vest immediately or over a shorter period of time than a 401(k), but sometimes offer fewer investment options.
A 403(b) is a type of tax –sheltered annuity plan, which allows you to invest pretax earnings in a retirement account and allow those funds to grow tax-free as well. You are only taxed on the disbursements you take after retirement, though you'll likely have to pay a 10 percent penalty on any money you withdraw before age 59 ½.
As with a 401(k), your employer can make pretax matching contributions to your account, which you are only taxed on when you make withdrawals.
Another option is a Roth 403(b), in which you make after-tax contributions, but your earnings and eventual withdrawals are tax-free, provided the latter are qualified distributions.
As with a 401(k), there's a limit on how much you can contribute to a 401(b) each year. For 2016, that figure is $18,000, though investors age 50 and older can make an additional "catch-up" contribution of up to $6,000 a year, for a maximum of $24,000.
Those who have worked at the same nonprofit for at least 15 years can make a catch-up contribution of $3,000 a year, regardless of age, provided their previous contributions have averaged less than $5,000 a year.
Note that you typically designate your contributions as a percentage of your salary and not as a figure.
The calculator will not only take into account your current salary, but also anticipated salary increases and the higher contributions you can expect as a result.
Most of the entries in the calculator are self-explanatory, but the following may be helpful.
For employer contributions:
When you are finished, the calculator will show you how much you can expect your 403(b) account to contain at the time your retire. For a more complete breakdown, click "Show report" at the top of the page.