Hey, big saver! The IRS won't increase the maximum amount you can squirrel away in your retirement plan next year.
That means that in 2017, employees can defer up to $18,000 in their 401(k) plan — the same amount as this year. The limit also applies to 403(b) plans, most 457 plans and the federal Thrift Savings Plan.
The catch-up contribution limit for employees who are at least 50 years of age is $6,000, the same as it was this year.
The Internal Revenue Service makes cost-of-living adjustments to dollar limitations for pension plans and other retirement-related items based on the Consumer Price Index.
"The government's inflation numbers are coming in low, but I don't feel like that's what the average consumer is experiencing," said Debbie J. Freeman, director of tax and financial planning at Peak Financial Advisors in Denver.
Holding steady
It has been nearly three years since the Internal Revenue Service increased the maximum amount that savers can sock away into a retirement plan.
See below for a chart on how the contribution limits have changed over the last 10 years.
For those of you who save in an individual retirement account, the annual contribution limits will also hold steady from 2016. In 2017, you'll be able to contribute up to $5,500 to your IRA, plus an additional $1,000 if you're 50 or over.
Keep saving
Even if Uncle Sam won't raise the amount you can defer into your 401(k), odds are that you could be saving more.
Don't grow complacent if you're contributing enough to get a match from your employer (if offered). Increase your savings rate each year and with every raise, even if it's incremental.
"That's where you see the most impact," said Freeman. "That annual adjustment, even if it's half of a percent, will make a difference 30 years down the road."