403(b) Calculators
Our 403(b) calculators are designed to simplify retirement planning and financial planning. The 403(b) Savings Calculator lets you see how your retirement savings might grow over time. Just enter your contributions, any employer matching, and your expected annual returns, and you’ll get a clear picture of how your funds could increase. Meanwhile, our 403(b) Payout Calculator uses annuities to show how much guaranteed lifetime income you can receive in retirement.
403(b) Payout Calculator For Retirement
Our 403(b) retirement calculator uses annuities to provide precise figures, not just estimates, to help you plan your retirement income. We use annuities with Guaranteed Lifetime Withdrawal Benefits to determine the monthly payout because they contractually guarantee payment for the rest of your lifetime. This automates your income during retirement, alleviating the stress of worrying about running out of money before you pass away. Any remaining balance you have will be passed down to your beneficiaries.
Helpful Tip: Annuity options for teachers can complement a pension or school retirement plan by filling income gaps, protecting rollover assets, and coordinating survivor income.
To use the calculator, simply:
- Enter your age.
- Input your resident state.
- Input your current 403(b) balance,
- When would you like to collect your 403(b) payout (Start My Benefits)?
Note: Income amounts are updated in real-time. Some top results may initially show a higher income, but with a future decrease. These specialized products should be ignored. The income column should match both the 10-year and 30-year values.
403(b) Growth Calculator
Our 403(b) Growth Calculator is designed to give you a detailed forecast of how your investments will increase over time based on your starting balance, how often you contribute, and the interest rates you expect. This tool helps you make informed choices and adjust your savings plan to achieve your financial goals effectively.
Just enter your annual salary, the percentage you’d like to contribute, any expected salary increases, your current age, the age you plan to retire, and the anticipated rate of return. Don’t forget to include any employer-matching contributions if they are available. The calculator will then display your estimated savings total by the time you retire.
403(b) Basics
What It Is
A 403(b) plan, also known as a tax-sheltered annuity (TSA) plan, is a retirement savings plan similar to a 401(k) that is available to employees of public schools, universities, churches, and nonprofit organizations. It works much like a 401(k) but is tailored to nonprofit and educational employers. Here’s how it works, why it’s useful, and who it makes sense for.
Who Is Eligible
403(b) plans are specifically designed for employees of:
- Public schools, colleges, and universities
- Churches and church-related organizations
- Charitable entities that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code
How Contributions To A Tax-Sheltered Annuity Are Treated
- Taxation on Withdrawals: Withdrawals from a TSA are taxed as ordinary income. If funds are withdrawn before age 59½, they may be subject to a 10% early withdrawal penalty, in addition to regular income tax, unless an exception applies.
- Pre-Tax Contributions: Contributions to a TSA are typically made through payroll deductions and are taken out before federal (and often state) income taxes are calculated. This reduces the employee’s taxable income for the year in which the contributions are made.
- Tax-Deferred Growth: The investments within the TSA grow tax-deferred, meaning that investment earnings (such as interest, dividends, and capital gains) are not taxed until the money is withdrawn from the account.
What Are The Contribution Limits
The IRS sets annual contribution limits for 403(b) plans, which can change each year. For the year 2026, the general contribution limit is $24,500. However, if you’re aged 50 or older, you can make catch-up contributions—an additional $8,000, bringing your total contribution limit to $32,500. If you are between 60 and 63, you can add $11,250, bringing your total contribution to $35,750.
403(b) Withdrawal Options
You can begin withdrawing from your 403(b) plan without penalties when you reach the age of 59½. Withdrawals taken before this age are subject to a 10% early withdrawal penalty in addition to being taxed as regular income.
Upon retirement, you typically have several options for withdrawing from your account:
- Lump-Sum Distribution: Receive your entire account balance at once.
- Regular Installments: Schedule regular withdrawals (monthly, quarterly, etc.) based on your personal financial needs.
- Annuities: Convert your 403(b) balance into an annuity, which provides regular payments for life or a specified period.
Pros of a 403(b)
- Tax-deferred growth helps savings compound faster.
- Contributions reduce taxable income if pre-tax.
- Early access to loans and hardship withdrawals in some plans.
- Certain employees with 15 or more years of service may be eligible for extra “catch-up” contributions.
- Strong protection from creditors under federal law.
Cons of a 403(b)
- Withdrawals before 59½ usually face a 10% IRS penalty plus taxes.
- Fewer investment options compared to 401(k)s or IRAs.
- Higher fees, especially when annuity-based plans dominate.
- Some plans lack employer matching.
Who Needs a 403(b) and Why
- Teachers, professors, ministers, and nonprofit employees who don’t have access to a 401(k).
- Mid-career professionals in nonprofits who want tax-deferred savings with higher contribution limits than IRAs.
- Employees nearing retirement who want to maximize catch-up contributions.
Who Doesn’t Need a 403(b) and Why
- Workers in the private sector have access to a 401(k) that offers more investment options and a stronger employer match.
- Self-employed individuals who may benefit more from a Solo 401(k) or SEP IRA.
- Those with high-fee annuity-based 403(b) plans who could save more efficiently in IRAs or brokerage accounts.
Related Insurance and Protection to Consider
- Life insurance to protect dependents in case of premature death.
- Disability insurance to safeguard income if you can’t work—especially critical for educators and nonprofit workers with limited employer benefits.
- Long-term care insurance to protect retirement savings from nursing home or in-home care costs.
Bottom Line
A 403(b) can be an excellent retirement savings vehicle for employees of nonprofits, schools, and religious organizations; however, it comes with certain limitations. It’s not always the best option if your plan is filled with expensive annuities or lacks employer contributions. Comparing your 403(b) with an IRA or even rolling funds into an annuity may provide better results, depending on your situation.
👉 Contact The Annuity Expert for free quotes and to compare whether keeping your 403(b), rolling it into an IRA, or buying an annuity makes the most sense for your retirement plan.
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Questions From Our Readers
Is contributing to a 403(b) worth it?
A 403(b) plan can be a great retirement option if you work for a nonprofit organization. It works like a 401(k) plan and offers several benefits, including tax deductions and exemptions, the opportunity to have a Roth IRA, and different catch-up contribution limits. Additionally, some employers may also offer a matching contribution.
How much should you have in your 403(b) by age 30?
To achieve financial stability, saving a specific amount based on age and income is advisable. By turning 30, I aim to save an amount equivalent to my yearly earnings. For instance, if your annual income is $50,000, save $50,000 for retirement. By age 40, the target should be to save three times your annual income; by age 50, you should aim to save six times your yearly salary.
How does a 403(b) grow?
Traditional 403(b) retirement plans utilize pre-tax funds, which grow tax-deferred. This implies that while you won’t pay tax on the money now, you will be charged tax when withdrawing it after retirement. A Roth 403(b) uses money that has already been taxed. It is not taxed when withdrawn after retirement.
How much should I have in my 403(b) to retire?
A common rule of thumb is to aim for a retirement fund that is 10 to 12 times your annual salary. For example, if you expect to retire on an annual income of $50,000, you should aim for $500,000 to $600,000 in your 403(b)
How much should I put in my 403(b) each month?
The amount an individual should contribute to their 403(b) retirement account each month depends on factors such as income, financial goals, and age. Generally, financial advisors recommend contributing 10-15% of one’s income towards retirement. To determine the specific amount, it is advisable to consult with a financial professional who can assess the individual’s unique circumstances and make recommendations tailored to their needs.
What is the average rate of return on 403(b)?
The average rate of return on a 403(b) retirement plan can vary depending on several factors, including the investment options chosen and market conditions. However, historically, the average rate of return on a 403(b) has been around 5-8%.
What are the contribution limits for a 403(b) plan?
For 2026, you can contribute up to $24,500 per year in elective deferrals. If you’re age 50 or older, you can make an additional $8,000 catch-up contribution for 2026. If you’re between ages 60 and 63, the higher SECURE 2.0 catch-up limit is $11,250 for 2026.
Beginning in 2026, certain higher-income employees must make catch-up contributions on a Roth basis. This applies if your prior-year FICA wages from the same employer exceeded 0,000.
Can I roll a 403(b) into an IRA without facing tax penalties?
Yes. You can roll over a 403(b) into an IRA or an IRA annuity without any tax implications.
How much will my 403(b) grow if I stop contributing?
If you stop contributing to your 403(b), the growth will depend on various factors like the current balance, investment returns, and the time until retirement. One can estimate potential growth by using a retirement calculator that takes these variables into account. It is essential to continue saving regularly to maximize the potential growth of your 403(b) account.
Can ministers use their 403(b) with housing allowance designation to generate retirement income?
Yes, and the minister’s housing allowance offers a unique tax advantage. If your 403(b) is 100% designated for housing allowance, you can withdraw income in retirement and exclude it from taxable income—up to your actual housing costs or fair rental value. That alone makes your 403(b) more powerful than a standard retirement account.
However, since you mentioned being stuck with poor fund choices and needing better growth, moving into an annuity right now may not be the right move—especially if your account value is low. Annuities prioritize income and safety, not growth.
Instead, look for a low-cost, growth-focused brokerage IRA with access to a wider range of index funds or ETFs. If your 403(b) allows an in-service rollover or you qualify for a transfer, you could gain access to better investment options without sacrificing the housing allowance treatment (as long as the new custodian supports ministerial accounts).
Stick to low-cost index funds or growth ETFs in sectors like technology, healthcare, or total market funds. Focus on building value now. When you near retirement and want to convert that growth into lifetime income, you can revisit annuities at that time.
For now, your priority should be optimizing growth while retaining the housing allowance benefit. Ensure that any provider you use can properly maintain the clergy designation to avoid losing the tax advantage later.
This approach helps you build more wealth now, while preserving the option for tax-advantaged income in retirement.
Can using an annuity now help you retire earlier than relying solely on your 403(b)?
Yes, using an annuity now can help you retire earlier if the guaranteed income meets your needs. By turning your current 403(b) balance into lifetime income, you secure a predictable monthly payment and can use future savings to fund early retirement. Just be careful about the type of annuity—GLWB riders on fixed indexed annuities are more flexible than immediate annuities and still provide guaranteed income for life. Compare products before committing.
Is a 403(b) an annuity, IRA, or pension?
A 403(b) is not an IRA or pension but can offer annuity or mutual fund investments. Pensions provide a fixed lifetime income, whereas 403(b)s depend on contributions and investment growth.
What is the 15-year service rule for 403(b)?
Some long-term employees may contribute an extra $3,000 per year if they’ve worked at least 18 years with the same eligible employer.
What happens if you put too much in your 403(b)?
Excess contributions must be withdrawn and taxed. Failure to correct could result in penalties.
Are 403(b) withdrawals taxed?
Yes. Pre-tax contributions and earnings are taxed as ordinary income when withdrawn. Roth contributions are tax-free if the rules are met.
How can I avoid paying taxes on a 403(b) withdrawal?
You can’t avoid taxes on pre-tax contributions, but using Roth contributions or rolling into a Roth IRA may reduce taxes long-term.
Can I withdraw from my 403(b) to pay off debt or buy a house?
Yes, but early withdrawals before 59½ usually incur taxes and penalties. Loans may be an option, but they must be repaid.
What are the disadvantages of rolling over a 403(b) to an IRA?
You may lose special 403(b) benefits, such as the 15-year catch-up, and potentially face higher fees if you are not careful with your investments.
What happens to my 403(b) if I quit or get fired?
You can leave it with your old employer, roll it into an IRA or new employer plan, or cash out (though taxes and penalties may apply).
What happens to a 403(b) when you retire?
You can withdraw funds, roll them into an IRA, or convert them into annuity payments. Withdrawals are taxed unless they are from a Roth account.
Who can inherit a 403(b)?
Spouses, children, or other beneficiaries can inherit. Taxes and distribution rules apply depending on the nature of the relationship.
Are 403(b) plans worth it?
Yes, if your employer offers a match or if you’ve maxed out other retirement savings. However, compare fees and investment choices carefully.
What are typical fees on a 403(b)?
Fees may include administrative costs, investment expense ratios, and annuity contract charges.