403(b) plans are only available for employees of certain nonprofit tax-exempt organizations: 501c(3) corps, including colleges, universities, schools, hospitals, etc. If you are an employee of one of these organizations, a 403(b) can be one of your best tools for creating a secure retirement. It provides you with two important advantages. First, all contributions and earnings to your 403(b) are tax-deferred. You only pay taxes on contributions and earnings when the money is withdrawn. Second, many employers provide additional contributions to your 403(b).
403(b) Employee Savings Plan: |
403(b) Employer Contribution/Match: |
Your total is $584,367.58 without fees and $467,778.17 with fees, after 35 years. |
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.
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.
Your current age.
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.
The starting balance or current amount you have invested or saved in your 403(b).
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 2023, had an annual compounded rate of return of 15.2%, including reinvestment of dividends. From January 1, 1970 to December 31st 2023, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.9% (source: www.spglobal.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.
The annual percentage you expect your salary to increase. The tool assumes that your salary will continue to increase at this rate until you retire.
This is an annual fee based on the balance of the account.
An employer contribution or match is in addition to your annual contributions. If it is based on a percentage of your annual salary enter that amount here and the dollar amount will be calculated.
An employer contribution or match is in addition to your annual contributions. If it is based on an annual dollar amount, enter that amount here and the annual percentage will be calculated.
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 2024 is $23,000. If you are age 50 or over, a 'catch-up' provision allows you to contribute an additional $7,500 into your 403(b) account. The SECURE 2.0 Act of 2022 increases the catch-up contribution beginning in 2025 for individuals age 60 to 63 to 50% of the standard contribution limit. Beginning in 2026 catch-up contributions must be made as Roth contributions for individuals making more than $145,000 (adjusted for inflation) in the previous year. The current calculator does not include the future catch-up contribution limit or Roth requirement which are subject to pending IRS rule finalization and clarification. 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.
Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues. The S&P 500 is an unmanaged index of 500 widely held stocks. It is not possible to invest directly in an index. The performance mentioned does not include fees and charges which would reduce an investor returns. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, or state or local taxes. Profits and losses on federally tax-exempt bonds may be subject to capital gains tax treatment. Fixed income risks include, but are not limited to, changes in interest rates, liquidity, credit quality, volatility, and duration.
Calculators are provided by an independent third party and are being made available to you as self-help tools for your independent use and are not intended to provide investment advice or be representative of actual results. We do not guarantee their applicability or accuracy in regards to your individual circumstances. The determinations made by these calculators should not be construed as guarantees or projections. Moreover, the reasonableness of certain information may change over time because of changes in tax law, investment trends and your personal circumstances. The information contained here is based on current law and has been obtained from sources believed to be reliable, but we do not guarantee its accuracy. Investment results can vary considerably depending on the type of securities involved, general market conditions and other factors. It is important that you periodically review and update your plans. Raymond James does not provide tax or legal advice. You should contact your tax or legal advisor concerning your particular situation. All investments carry a degree of risk, and past performance is not a guarantee of future results.