From First Contribution to Retirement

Every Step Shapes the Retirement You’re Working Toward.

Your 403(b) can evolve with you. Explore five important stages and the questions to consider along the way.

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Stage 1

Begin the Journey

Starting matters more than how much you start with. Contributing to a 403(b) allows you to begin setting aside money directly from your paycheck and establish a savings habit at any point in your career.

Your first contribution may be modest. Whether you are early in your career or getting started later, the goal at this stage is to begin, build a savings habit, and choose a contribution amount that fits your current budget.

This is also an important time to learn more about your state or employer pension system. Understanding how your pension is calculated and what it may provide in retirement can help you better understand the role your 403(b) may eventually need to play.

Meeting with a financial professional can also help you learn more about the 403(b), understand how it works alongside your pension, and begin developing a retirement strategy.

Education employee beginning to review retirement information.

Stage 2

Build Momentum

As you progress in your career, your contributions should grow too and not stay where they started. Your salary will increase; step raises, promotions, paid-off debt, or other changes may create opportunities for you to increase the amount you save. Pay yourself first!

Even small increases, made consistently over time, will amount to a meaningful change in how much you accumulate by retirement.

A useful habit is to review your contribution annually, or at least every other year, rather than letting the amount you set years ago remain unchanged indefinitely.

Mid-career professional reviewing financial information at a desk with a laptop.

Stage 3

Strengthen Your Position

As you move further into your career, your financial picture may begin to change. For example, your mortgage may be smaller or paid off, children may become financially independent, student loans may be paid off, or your income may simply be higher than it was earlier in your career.

These changes can create an opportunity to increase your 403(b) contribution. At this stage in your career, the focus shifts from simply contributing to determining whether you are building enough. Review your projected pension, current 403(b) balance, other retirement savings, and expected retirement timeline.

If a gap begins to appear between the income your pension and other sources may provide and the resources you may need in retirement, you may still have meaningful time to save more and strengthen your position.

For many employees, this stage of their career can be one of the most important times for increasing retirement savings and preparing for retirement.

Education employee strengthening a retirement plan later in a career.

Stage 4

Prepare for the Transition

The years immediately before retirement are an important planning period. Instead of looking only at an account balance, begin thinking about how your different retirement resources may work together to provide monthly income.

Estimate your expected pension, Social Security if applicable, 403(b), other retirement accounts, and available savings. Then compare those resources with realistic retirement expenses.

If an income gap remains, this is the time to understand its size and determine how your 403(b) may help address it.

This stage is also an opportunity to evaluate your retirement date, healthcare costs, taxes, expected lifestyle, and the amount of financial flexibility you may want after leaving employment.

Education employee preparing for the transition into retirement.

Stage 5

Retirement: Income & Flexibility

In retirement, your 403(b) takes on a new role. After years of contributing, the account can become a resource that works alongside your pension and other retirement assets.

For some retirees, the 403(b) may provide a regular source of retirement income. Others may access it periodically when additional money is needed, while some may use a combination of both approaches.

The 403(b) can also provide something a pension alone may not: access to a pool of retirement savings for larger or changing expenses, such as home repairs, vehicle purchases, travel, healthcare costs, family needs, and other expenses that do not always fit neatly within a fixed monthly income.

The goal is to determine how your 403(b) can work alongside your other retirement resources to provide both income and flexibility throughout retirement.

Retired education employee considering income and financial flexibility.

One Journey. Different Starting Points.

This hypothetical illustration shows how consistent saving and contribution increases can shape the journey from different starting ages.

Starting earlier may provide more time for growth, but starting later and increasing contributions over time can still make meaningful progress.

Hypothetical 403(b) saving journeys from ages 30, 40, and 50 to age 65 Each saver begins with $250 monthly, increasing the monthly contribution by $50 every five years. At a hypothetical 6% annual return compounded monthly, the age-65 values are approximately $490,378 for the age-30 starter, $222,574 for the age-40 starter, and $84,387 for the age-50 starter. These are illustrative values, not actual investment results. Hypothetical 403(b) saving journeys from ages 30, 40, and 50 to age 65 Each saver begins with $250 monthly, increasing the monthly contribution by $50 every five years. At a hypothetical 6% annual return compounded monthly, the age-65 values are approximately $490,378 for the age-30 starter, $222,574 for the age-40 starter, and $84,387 for the age-50 starter. These are illustrative values, not actual investment results.
Starting at age 30 $490,378 at age 65 · hypothetical
Starting at age 40 $222,574 at age 65 · hypothetical
Starting at age 50 $84,387 at age 65 · hypothetical
Monthly contribution begins at
$250
Increase every 5 years
+$50 per month
Assumed annual return
6%
Saving continues until
Age 65

Hypothetical illustration for general educational purposes only; not actual investment results. Contributions are made at month-end, with 6% annual interest compounded monthly (0.5% per month). No fees, taxes, withdrawals, or employer contributions are included. Actual returns and outcomes will vary.

Your Next Step

Where Are You on Your 403(b) Journey?

Whether you are making your first contribution, increasing what you save, preparing for retirement, or deciding how to use an existing account, a conversation can help you identify what to consider next.

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