At the start of 2018, the limit on 401(k) contributions rose from $18,000 to $18,500. This may not seem like a huge difference, but that extra chunk of money can mean thousands of more dollars in the long run. Here are some of the top reasons why you should be hitting this new maximum limit.

The Added Tax Benefit

Rather than keep that extra $500 for whatever plans you may have for it, consider that the government will get a portion of that money come tax season. However, if you decide to contribute that money into a 401(k) instead, you don’t have to worry about losing a portion of it to taxes. According to ”6 Ways Meeting the 2018 401(k) Contribution Limits Will Brighten Your Future,” being a high tax bracket could mean “that $500 could actually just represent about $300 in your paycheck.” As such, contributing that extra money will give you more money later down the line.

Cutting Out Bad Habits to Save More

Many of us have bad spending habits, whether it be getting that Starbucks drink in the morning or going out to eat too much during the week. Furthermore, most of us need some reason to break these habits other than just a desire to do so. By framing your new budget in the light of saving more for when you retire, that can help you clean up your spending habits and buckle down on a budget. In doing so, you will find that you will not only have more money to put towards retirement, but you will also have more money, in general, to save for other things such as vacations.

The Unknown Future

Fortunately, contribution limits have been rising or staying the same. Talk about decreasing limits has circulated through Congress before, although it has recently been abandoned. However, that doesn’t mean that these limits could change in the future. According to “401(k) Contribution Limits for 2018,” the long-term pattern of low inflation will probably translate as “several more years of either low or nonexistent increase in contribution limits.” Whenever there is an increase, it is more beneficial to contribute up to the new limit for the fact you may never know what that limit will be later down the line.

Things That Aren’t Changing

Although the 401(k)-contribution limit was increased, the Feds also chose not to increase other things such as the “catch-up contributions for employees ages 50 and over,” which is still set at $6,000 according to “Here Are the New 401(k) and IRA Contribution Limit for 2018.” The IRA deduction phaseouts also changed this year. For the foremost, the deduction phaseout for single taxpayers with a workplace retirement plan is now $63,000 to $73,000, for married couples filing jointly, it is now $101,000 to $121,000, and for couples where their spouse and not the individual contributor is covered, it has increased from $189,000 to $199,000. Now is the time to start thinking about saving more for retirement. Hitting the maximum each year is key to ensuring you have enough money when you do finally retire.