Increasing the amount of money that can be contributed to a 401k is important because it can lead to a larger nest egg. If you are self-employed, for instance, and your business had a profitable year, you can make especially large contributions or even max out the annual limit as some people choose to do.
Also, many people may not realize their employer offers a 401k plan as an employee benefit.
Some Americans are already maxing out their 401k contribution and investing as much as they can in order to save for retirement. The government has set the cap at $19,500 a year for people under 50 years of age and $26,000 a year for people above the age of 50 years. The annual cap was originally set at $2,750 in 1978.