403(b) Savings Calculator without Employer Match
403(b) Savings Calculator without Employer Match Definitions
- Amount to contribute
- This is the amount that you contribute to your 403(b) plan each year. Participants can contribute up to 100% of their annual income, subject to an annual maximum.
- Annual salary
- This is your annual salary from your employer before taxes and other benefit deductions. Since your contribution and any company match are based on the salary paid to you by your employer, do not include any income you may receive from sources other than your employer.
- Current age
- Your current age.
- Age at retirement
- Age you wish to retire. This calculator assumes that the year you retire, you do not make any contributions to your 403(b). For example, if you retire at age 65, your last contribution occurs when you are actually 64.
- Current balance
- The starting balance or current amount you have invested or saved in your 403(b).
- Annual rate of return
- The annual rate of return for your 403(b) account. This calculator assumes that your return is compounded annually and your deposits are made monthly. The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2019, had an annual compounded rate of return of 13.2%, including reinvestment of dividends. From January 1, 1970 to December 31st 2019, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.7% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.
- Annual salary increase
- The annual percentage you expect your salary to increase. We assume that your salary will continue to increase at this rate until you retire.
- Annual Investment Fee
- This is an annual fee based on the balance of the account.
- Annual contribution limits
- Your total contribution for one year is based on your annual salary times the percent you contribute. However, your annual contribution is also subject to certain maximum total contributions per year. The annual maximum for 2020 is $19,500. If you are age 50 or over, a 'catch-up' provision allows you to contribute an additional $6,500 into your 403(b) account. It is also important to note that employer contributions do not affect an employee's maximum annual contribution limit.
In addition, an additional catch-up provision for participants that did not participate in the plan earlier in their tenure may be available. These special catch-up provisions are subject to length of employment and other contribution rules. Determining your maximum contribution based on these additional catch-up provisions is beyond the scope of this calculator.