I’ve spoken with many educators about retirement planning over the years, and if you’ve ever been frustrated trying to make sense of your 403b retirement fund statement, don’t worry, you’re not alone. 403b statements tend to be a little tricky to calculate when compared to other monthly or quarterly retirement investment statements from your bank or financial advisor. Maybe you’ve glanced over the statement for years without taking the time to do the math, but now you’re getting close to retirement, and it’s time to get serious about what you have in savings, and how much you may still need. There are several important things that you need to consider when trying to determine your 403b calculation. Here I want to focus on the key pieces of information you need to know to bring your retirement picture into focus.

Essential information needed to for your 403b Calculation

Generally speaking, there are eight key pieces of information that you will need in order to calculate the current and future status of your 403b retirement fund. The most important of these are the combined contributions from both you and your employer, and your annual rate of return.

While the rate of return cannot be determined with exact accuracy, the law of large numbers can be applied to estimating investment returns based upon the allocation of your portfolio. Here are some key pieces of information that will help you determine your retirement savings 403b calculation.

Your Annual 403b Account Contribution

The IRS recently increased the maximum amount of annual contributions from $18,500 to $19,000. This means that each year you teach you can bank up to $19,000 in your 403b plan with pre-tax dollars. Even by conservative estimates, your savings plan should grow exponentially with compounding interest. The growth of your retirement savings will also grow tax-deferred.

The Account Balance of your 403b

According to a recent CNBC report, the average 403b retirement account balance was about $85,500. Remember, that figure is average, which means in takes into consideration those younger employees who may have less than $5,000 in their accounts. For example, a teacher who is in their fifth year of teaching is going to have a considerably smaller retirement savings account compared to a teacher who has 25 years in the classroom.

Your Annual Rate of Return

According to Morningstar (investment research), historical returns for stocks have proven to be about 10%, while more conservative investment vehicles like bonds have generated returns of about 5.5%. Generally, the average 403b plan may produce an annual rate of return of about 7%.

Your Employer’s Contribution Match

403b plans that are qualified for Qualified Automatic Contribution Arrangement (QACA) are required to maintain some standards such as minimum employer contribution match of at least 3.5% and employee participants being vested in 2 years. While 403b plans may vary among teachers, it’s important to know what your employer has contributed, and is currently contributing to your 403b retirement plan.

Other Important Factors for your Calculation

  • Your current age
  • Your retirement age
  • Your annual salary
  • Your estimated annual salary increases
  • Your contribution percentage

Now that you have Your Numbers

Unless you teach AP Microeconomics, you may not be completely comfortable calculating compounded interest and putting together a multi-step investment return formula. Thankfully, there are several free online 403b calculator tools that can make life easy for you. Check out one of these and use the factors that I have outlined above to plug your numbers into the calculators:

Bankrate 403(b) Savings Calculator: https://www.bankrate.com/calculators/retirement/403-b-calculator.aspx

CalcXML: https://www.calcxml.com/calculators/pay11

Money-zine: https://www.money-zine.com/calculators/retirement-calculators/403b-savings-calculator/

Final Thoughts: Don’t Stress

Because of variation in the size of your account balance and your return on investment, it’s important to point out that your calculation will be an estimate. But trust me, with steady personal contributions, employer matches and conservative to moderate growth, you’ll probably be surprised at how quickly your 403b retirement savings account will grow over the span of your career.

In preparation for retirement, many investors make the mistake of obsessing over their current 403b statement and other personal savings accounts while completely overlooking the social security income they will also have each month. My suggestion would be to take a deep breath and try to relax. With continuous funding and a decent rate of return on your investments – you’re likely to be in a good position to enjoy retirement!


Michael Garvin



Michael Garvin is a Financial Advisor with 10 years of experience in retirement planning and investment management. Michael holds insurance Licenses for all personal & commercial insurance lines including life, disability and health.



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