The IRS increased 401k contribution limits by $500—here's what that means for you
Doesn't sound like a big deal? It is. That extra $500 could help you more than you may think.

Contribution limits were last increased in 2015 when they went from $17,500 to $18,000.

On Thursday, the IRS announced that 401(k) contribution limits will increase by $500 . In 2018, employees who participate in the employer sponsored plan will be able to contribute as much as $18,500 per year, up from $18,000.

As personal finance site NerdWallet points out, it could mean up to $70,000 more in your retirement account.

The site calculated how much bigger your retirement fund would get if you started investing an additional $500 a year. It assumed a retirement age of 67 and a 6 percent annual rate of return.

To give you an idea of just how powerful compound interest is, NerdWallet also highlighted how much money you'd have if you didn't invest the $500 a year and simply kept it as cash:

If a 30-year-old starts investing an extra $500 a year, it could mean an extra $70,212 in retirement, versus $18,500 saved in cash.

If a 40-year-old starts investing an extra $500 a year, it could mean an extra $34,712 in retirement, versus $13,500 in cash.

If a 50-year-old starts investing an extra $500 a year, it could mean an extra $15,202 in retirement, versus $8,500 in cash.