403(b) Retirement Calculator

How 403(b) plans work

A 403(b) is a tax-deferred retirement account available through public schools, hospitals, 501(c)(3) nonprofits, and churches. You contribute pre-tax dollars, your money grows without being taxed annually, and you pay ordinary income tax when you withdraw in retirement. It works the same way a 401(k) does for private sector employees.

Employer matches vary a lot in the nonprofit world. Corporate 401(k) plans often match 3-6% of salary. Many nonprofits and school districts match far less, sometimes a flat dollar amount like $1,000-$2,000 per year, and some match nothing at all. The calculator lets you enter whatever your employer actually contributes so the projection reflects your real situation.

Vesting schedules matter here too. Your contributions are always yours, but employer contributions often vest over two to six years. If you leave before you're fully vested, you forfeit some or all of that employer money. Check your plan documents before making job decisions based on projected match totals.

The 15-year rule

This is the one feature that sets 403(b) plans apart from 401(k)s, and most employees who qualify for it don't know it exists.

If you've worked for the same qualifying employer (a school, hospital, or nonprofit) for at least 15 years, and your average annual contribution over that period has been less than $5,000 per year, you may be eligible to contribute an additional $3,000 per year on top of the standard limit. The IRS caps the lifetime total of these extra contributions at $15,000, so after five years of using the rule you've exhausted it.

Not every 403(b) plan administrator supports this feature, even when you're otherwise eligible. Confirm with your HR department or plan provider before assuming you can use it. The IRS applies the 15-year rule before the age-50 catch-up when calculating your maximum allowed contribution for the year.

403(b) vs. pension: which to prioritize

Most public school teachers and many hospital employees have access to both a defined benefit pension and a 403(b). The pension is usually mandatory. Your contributions come out of every paycheck whether you want them to or not.

The 403(b) is voluntary and supplemental. The right order: contribute enough to get any employer match first, since that's an immediate 100% return on that money. Then keep funding your pension obligations. Then direct additional savings into the 403(b) up to the annual limit if your budget allows.

Teachers in states with strong pension systems, like California, Illinois, or New York, often have substantial pension income replacing 60-80% of their pre-retirement salary after a full career. The 403(b) fills the gap, covers years before pension eligibility, and provides a hedge if the pension system faces funding pressure down the road.

403(b) vs. 401(k): the actual differences

The contribution limits are identical in 2026: $23,500 for employees under 50, $31,000 for employees 50 and older after the catch-up. The investment options are often similar, though some older 403(b) plans still default to annuity contracts with high fees, while most 401(k)s offer low-cost index funds. If your 403(b) is full of insurance-wrapped products with expense ratios above 1%, that's worth pushing back on with your employer.

The 15-year rule is the only meaningful structural advantage 403(b)s have over 401(k)s. Everything else, the tax treatment, the rollover rules, the required minimum distribution schedule, the rule of 55 separation exception, is the same.

One practical difference: 403(b) plans at churches and some smaller nonprofits aren't subject to ERISA, which means fewer protections for participants. If your plan isn't ERISA-covered, you have less recourse if the employer mismanages contributions.