• Review your investment strategies. Your life can change significantly over the course of a year. You may have gotten married or remarried; you might have had a child or grandchild; you might have decided to change jobs or open your own business - the list could go on and on. And for every single one of these changes in your life, you very well might need to change your investment strategies.

• Add to your retirement plan. If you have a 401(k), 403(b) or 457(b), your employer may allow you to make extra contributions before the end of the year. Since you typically make these contributions with "pre-tax" dollars, the more you contribute, the lower your taxable income may be. And of course, your money grows on a tax-deferred basis.
• Sell off some of your "winners." The stock market had a pretty good year in 2006, so you may well end up with some large net capital gains. If that's the case, you might want to consider selling some stock to generate a loss before year-end - a move that could reduce the amount of tax you pay this year. Keep in mind, though, that if you do sell stock to generate a loss, the IRS' "wash sale" rules will prohibit you from purchasing substantially similar stock within 30 days before or after the sale that generated the loss.
• Make a charitable gift. By making to a gift to a charitable organization, you'll help a group whose work you support - and you'll also help yourself. You'll get an immediate tax break for your contribution, and, if you give an appreciated asset, such as stock, you'll avoid having to pay the eventual capital gains taxes when the stock is sold. Plus, you'll be removing an asset from your estate, thereby reducing the likelihood of incurring estate taxes. Before making any moves, though, check with your tax professional.
• Put extra money to work. If you have a large amount of cash to invest, and it's "sitting around" earning interest, you might want to shift some of the income to next year by investing in a short-term Certificate of Deposit or Treasury bill that matures in 2007.
• "Grade" your investments' performance. It's a good idea to review your investment portfolio at least once a year - and the end of the year is as good a time as any. As you look over your year-end statements, ask yourself if your investments have performed as you had anticipated. While no one can predict the future, the best investors plan for, and often achieve, a certain rate of return - or at least a return that lies in a fairly narrow range - each year. How do they do it? By understanding their investments - and by choosing a mix that best reflects their individual risk tolerance and time horizon. So, if each year you find yourself "unpleasantly surprised" at your portfolio's performance, you probably need to make some changes.

By taking these steps before 2006 ends, you just might make 2007 a happy new year.

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