A 403(b) plan — sometimes called a tax-sheltered annuity — is the retirement account offered to public-school teachers, government employees, and workers at 501(c)(3) non-profit organizations. It looks and feels a lot like a 401(k), but it lives in the public and non-profit world, uses annuity and custodial accounts instead of the big 401(k) menu, and often comes with employer matching that many school districts quietly provide. This 403(b) calculator projects your balance at retirement from your salary, contribution rate, employer match, expected return, and years until you stop working — and it also estimates the annual tax savings you get from contributing pre-tax dollars.
Adjust any slider and the result card updates instantly. Because the math compounds year by year, small changes in your contribution rate or assumed return can move the final balance by hundreds of thousands of dollars, so it is worth running a few scenarios.
How to Use
- Enter your Current 403(b) Balance — the total already sitting in your account, including any old plans from previous employers. If you are just getting started, leave it at zero.
- Type your Annual Gross Salary before any pre-tax deferrals. This is the base the contribution percentage is applied to.
- Set Your Contribution as a percent of salary. A common starting point is 10–15%; contributing at least enough to capture the full employer match is the single highest-impact move.
- Fill in the Employer Match — typically 50 cents on the dollar up to a cap — and the Match Cap as a percent of salary. If your employer does not match, set both to zero.
- Choose your Expected Annual Return. A diversified stock-and-bond fund menu is commonly modeled at 6–8% per year; test a lower and higher number to stress your projection.
- Enter Years Until Retirement — how many more years you will keep contributing before you withdraw.
- Optionally set your Current Marginal Tax Rate (your federal bracket, often 12%, 22%, or 24%) to see the annual tax break you receive from pre-tax contributions.
The result card then shows your projected balance at retirement, the total dollars you and your employer will have added, and the estimated tax savings over the whole horizon.
The Future-Value Formula Behind the Number
The projection uses the standard future-value-of-an-ordinary-annuity formula used by every major retirement calculator:
FV = PMT × ((1 + r)ⁿ − 1) / r + PV × (1 + r)ⁿ
Where:
- PMT is your total annual contribution (yours plus the employer match).
- r is the annual return as a decimal (7% becomes 0.07).
- n is the number of years until retirement.
- PV is your current 403(b) balance.
Worked example: on a $60,000 salary, contributing 10% ($6,000/yr) with a 50% match up to 6% of salary ($3,000/yr), at a 7% return for 30 years, the annual contribution is $9,000. The annuity part grows to roughly $818,000 of contributions compounded, and with zero starting balance the projected nest egg is about $850,000. Of that, only $270,000 came out of paychecks — the rest is compound growth. If the return is 0%, the formula divides by zero, so the engine simply sums contributions: $9,000 × 30 = $270,000.
403(b) vs 401(k): What Is Actually Different?
If you have only seen a 401(k) in a private company, the 403(b) world has a few quirks worth knowing:
- Who offers it. 403(b) plans are for public schools, colleges, government agencies, and 501(c)(3) non-profits. A private-sector job gives you a 401(k); a public-school or non-profit job gives you a 403(b).
- Investment menu. Historically 403(b) plans focused on annuity contracts, but most modern plans now offer low-cost mutual funds through custodial accounts. The investment menu is often narrower than a 401(k)’s, so fees matter.
- Shortened eligibility. 403(b) plans may allow special early withdrawal rules, including the age-55 separation rule and loans, but these vary by plan and should be confirmed with your HR office.
- Match timing. Some public-school districts only start matching after you have been employed for a few years, or match in the summer paycheck rather than every pay period.
- No automatic enrollment pressure. 403(b) plans were historically exempt from some of the auto-enrollment rules that push 401(k) participants in, so many contributors have to opt in themselves.
The annual contribution limits are the same federal rules that apply to 401(k)s — the 2025 elective deferral limit is $23,500, plus a $7,500 catch-up for age 50 and over, plus a separate 15-years-of-service catch-up for certain long-time public-school employees.
Examples
Example 1 — A teacher starting at 35. A public-school teacher earns $60,000, defers 10% ($6,000/yr), gets a 50% match up to 6% of salary ($3,000/yr), assumes a 7% return, and has 30 years until retirement at 65 with a 22% marginal bracket. The projected balance is about $850,000, total employee contributions are $180,000, total employer match is $90,000, and the annual tax break is about $1,320. Over 30 years the pre-tax contributions save roughly $39,600 in federal tax.
Example 2 — An already-funded account. A librarian with a $1,000,000 existing 403(b) balance earns $80,000, defers 15% ($12,000/yr), gets a 100% match up to 8% of salary ($6,400/yr), assumes a 6% return, and has 20 years to retire with a 24% bracket. The existing million-dollar balance alone grows to about $3.2 million, and new contributions add roughly $684,000, for a projected total near $3.88 million.
Example 3 — The free-money gap. On the same $60,000 salary with a 50%-up-to-6% match, contributing only 3% instead of 10% leaves the employer match capped at just $900/yr instead of $3,000/yr. Over 30 years at 7%, that single choice costs roughly $280,000 in projected balance. Contributing enough to get the full match is the clearest 50–100% instant return in retirement saving.
FAQ
What is a 403(b) plan and who is eligible?
A 403(b) is a tax-advantaged retirement plan for employees of public schools, colleges, universities, and 501(c)(3) non-profit organizations. If you teach at a public school, work for a state or local government, or are on staff at a charity, your employer almost certainly offers a 403(b) rather than a 401(k). The plan lets you defer part of your salary before income tax, and the money grows tax-deferred until withdrawal.
How much can I contribute to a 403(b)?
The 2025 elective deferral limit is $23,500, plus a $7,500 catch-up contribution if you are age 50 or older. Certain public-school employees with 15 or more years of service at the same employer can use an additional special catch-up of up to $30,000 over their career. Employer matching contributions do not count against your personal elective limit, but combined employer-and-employee contributions are capped at a much higher total limit.
Does my employer match count toward my projected balance?
Yes. This calculator adds your employer’s match to your annual contribution and compounds it alongside your own money. Because the match is effectively free return, capturing the full match is usually the highest-return decision you can make — often an instant 50% or 100% return on the first few percent of salary.
How is the projected 403(b) balance calculated?
The balance uses the future-value-of-an-annuity formula: your total annual contribution (yours plus the match) is grown each year at your assumed return, and your existing balance is compounded at the same rate. For example, $9,000 contributed each year at 7% for 30 years grows to about $850,000. If you set the return to 0%, the engine simply sums contributions because the compounding formula divides by zero.
Are 403(b) contributions tax-deductible?
Traditional pre-tax 403(b) contributions reduce your taxable income in the year you make them. If you earn $60,000 and defer $6,000, you are taxed on $54,000 that year. At a 22% marginal bracket, that $6,000 deferral saves about $1,320 in federal income tax. Withdrawals in retirement are then taxed as ordinary income. Some plans also offer Roth 403(b) contributions, which are taxed up front but come out tax-free.
What is the difference between a 403(b) and a 401(k)?
Both are tax-advantaged defined-contribution plans with similar contribution limits, but a 401(k) is offered by private companies while a 403(b) is offered by public schools and 501(c)(3) non-profits. 403(b) plans historically focused on annuity contracts, often have narrower investment menus and higher fees, and may offer special long-service catch-up contributions. The long-term growth mechanics are otherwise nearly identical.
Disclaimer
This 403(b) calculator is provided for informational purposes only and does not constitute financial, tax, or investment advice. Projections are based on the inputs you enter and the standard future-value formula; actual returns vary by investment, fees, salary growth, and plan rules. Contribution limits, catch-up provisions, and tax brackets change annually and are not modeled dynamically. Always confirm your plan terms, contribution limits, and tax situation with a qualified advisor or your plan administrator before making retirement decisions.