403(b) Savings Calculator

How it works

A 403(b) is the workplace retirement plan for people who do not work at a company: public school teachers and staff, nonprofit and charity employees, hospital and university workers, and some clergy. Functionally it is the nonprofit world’s 401(k). Money is deferred straight out of your paycheck before income tax is worked out, your employer may add a contribution of its own on top, and the combined amount is invested until you retire. Because both pieces are set as a percent of salary rather than a flat dollar amount, the monthly figure falls out of your pay:

• S — your annual salary
• c — your contribution, as a percent of salary
• e — your employer’s match, as a percent of salary
• M — the total landing in the plan each month, yours and theirs together
• B — the plan balance at retirement
• i — monthly return (annual rate ÷ 12)
• n — months until you retire

With the defaults above, a $62,000 salary at 8% sends $413 a month of your own pay into the plan, and the 3% match adds another $155, so $568 a month is invested. Over 25 years at 7% that builds to roughly $460,391: $124,000 from you, $46,500 from your employer, and $289,891 of growth. The employer’s $46,500 is not the interesting number, though. Left alone for 25 years it turns into $125,561 of the final balance, comfortably more than a quarter of the whole thing.

The projection assumes you hold this salary and this percent for the entire timeline, which nobody does, and it starts from a zero balance today, so anything already sitting in the plan grows on top of what you see here. Read it as the trajectory your current settings point at, then re-run it when your pay changes. It does not enforce the IRS limit on what you can defer, and it takes the return you type at face value, which matters more in a 403(b) than in most plans.

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A worked example: a teacher on $62,000 with a 3% match

Say you teach on a salary of $62,000 and you defer 8% of it into your district’s 403(b). That is $413 a month out of your pay. The district adds a 3% match worth another $155 a month, so $568 lands in the plan every month while you get on with your job. Over 25 years at 7% it grows to $460,391.

Now set the match to 0%, the reality in plenty of nonprofit roles, and change nothing else. Your own 8% still goes in, untouched, for the same 25 years at the same return. The projection falls to $334,830. So the 3% you never noticed leaving a payslip is worth $125,561 by the time you retire, because the district’s $46,500 spent 25 years compounding exactly as hard as your own $124,000 did.

That is the entire case for filling the match before you optimize anything else. Enter your salary, the percent you defer, and whatever your employer actually promises in writing, and see what the free part of your plan is worth to you.

The match is the whole argument for funding this first

Look at the two contribution lines in the breakdown. Yours reads $124,000 over 25 years, taken out of pay you would otherwise have spent. Your employer’s reads $46,500, taken out of nothing at all. You did not earn it by saving harder or by picking better funds. It arrived because you filled in a form.

Left invested, that $46,500 becomes $125,561 of your final balance. Set the match to 0% in the calculator, leaving your own 8% exactly where it is, and the projection drops from $460,391 to $334,830. Same salary, same effort, same 25 years, $125,561 poorer.

This is why the standard advice puts the match ahead of everything else, including an IRA you might well prefer on its merits. A match is an instant, guaranteed return on the money you contribute, banked before the market does anything at all, and nothing else available to you competes with it. Contribute at least enough to collect the full match, then take whatever is left over and argue about IRAs. Leaving match on the table is not a cautious choice, it is declining part of your salary.

Check what the plan charges before you trust the return

Here is the part of 403(b) history nobody advertises. Unlike a typical corporate 401(k), many plans, and K-12 school district ones in particular, hand staff a long list of approved vendors and leave the vetting to them. A good share of those vendors sell insurance annuity products rather than plain mutual funds, marketed in the staff room by reps who are paid to be there. Those products carry layers an ordinary fund does not: an insurance charge stacked on the fund’s own expense ratio, and a surrender schedule that bills you for leaving early.

The damage never looks dramatic on a statement. It looks like a slightly smaller return. Put it in the calculator and it stops looking small. At 7% the default plan projects $460,391. At 5.5%, roughly what 7% feels like once a fee-heavy product takes its cut, the identical contributions land at $364,891. That gap is roughly $95,500, paid for paperwork you never read.

Ask your plan for the fee disclosure or the prospectus, then look for the expense ratio, any mortality and expense charge, and a surrender schedule. If a low-cost index fund sits on the vendor list, it is usually the one nobody mentioned.

Pre-tax now means taxed later

A 403(b) is the mirror image of a Roth, and it pays to know which side of the trade you are on. Your 8% leaves your salary before income tax is calculated, so although $413 a month disappears from your pay, your take-home drops by less than $413. The difference is tax you did not pay this year. That is a real, immediate benefit, and for anyone in a decent bracket it is the main reason to fund the plan past the match.

The bill is deferred, not cancelled. Every dollar you withdraw in retirement counts as taxable income, so the $460,391 above is a pre-tax figure. What you can spend is that number minus whatever your rate turns out to be, and it comes with required withdrawals once you reach a certain age.

None of which makes the pre-tax choice wrong. It makes it a bet that your tax rate will be lower in retirement than it is now, which is reasonable for most people in their peak earning years. Just do not read the balance as spending money. If your plan offers a Roth 403(b) option, splitting contributions between the two hedges the bet without predicting anything.