403(b) Calculator

The 403(b) calculator projects how a tax-sheltered annuity or nonprofit retirement plan may grow by retirement age. Enter your current salary, contribution percentage, starting age, planned retirement age, current balance, expected return, salary increase, and employer contribution percentage to estimate the future account balance.

How to use

Start with your current annual salary and the percent of pay you plan to defer into the 403(b). Add your current age and planned retirement age to set the investing period. Enter any existing 403(b) balance, an expected annual return, your expected annual salary increase, and the employer contribution percentage if your workplace contributes.

The calculator gives a long-term projection, not tax or investment advice. Actual returns move year to year, contribution limits change, and many plans have vesting schedules or special catch-up rules. Compare your result with the 401(k) calculator, compound interest calculator, and retirement calculator for broader retirement planning.

How it works

The projection compounds the current account balance once per year. At the end of each modeled year, it adds the employee contribution and employer contribution based on that year’s salary. Salary then increases by the salary-growth assumption and the process repeats until retirement age.

This annual model is easy to understand and close enough for retirement planning. Monthly payroll deposits can produce slightly different results, but uncertainty in future returns usually matters far more than the deposit timing.

Formula

For each year:

$\text{balance}_{t+1} = (\text{balance}_t \times (1+r)) + \text{employee contribution}_t + \text{employer contribution}_t$

$\text{employee contribution}_t = \text{salary}_t \times \text{employee rate}$

$\text{salary}_{t+1} = \text{salary}_t \times (1 + \text{salary growth})$

Examples

Common mistakes

• Forgetting employer vesting rules or assuming every employer contribution is immediately yours.
• Ignoring current IRS limits and age-based catch-up contributions.
• Treating a smooth return as guaranteed; real portfolios have volatile years.
• Comparing a pre-tax balance with after-tax cash without considering future income tax.