1) If you don't itemize your deductions, donate some of your RMD to charity.
2) If you are in a lower bracket this year than you will be next year, or at retirement, convert some of your pre-tax IRA money to a Roth IRA.
3) Bump your 401(k) deduction to boost your savings.
4) Check the expenses within your 401(k). I saw an interview with John Bogle and read the transcript regarding the high expenses within 401(k) accounts. Then, I was told that he was working off old data. Now the recent issue of Forbes, the 2007 investment guide, talks again about this very problem. Next month, I will discuss the fees that are high enough to have me advise staying clear of the 401(k) account altogether, but for now, check those fees.
5) If you have some cash you can invest consider an IRA deposit before year end, even if you can't deduct it, the law will kick in allowing you to convert it to a Roth in 2010. You can stash $20K over the next five years, convert to a Roth, and let the money grow tax free.
6) Update your will. You do have a will don't you? My own will has one catch for my beneficiaries. They must produce an executed will to collect their inheritance. I figure that's not too tough a demand. I won't even suggest where they leave it, a friend, a charity, their choice. Accidents happen, people die. Get a will.
7) You are richer than you think. Pop quiz - the person in the world who makes the median income (i.e. half the world makes more, half, less) brings home how much per year?
Give up? $850!! If you make $40,000/yr only 3% of the people in the world make more than you. See Global Rich List for details.
8) Now that you're feeling so rich, think about finding a new charity. Andrew Tobias mentioned The Smile Train on his web site some time back, and I've donated every year since. Also see New England Shelter for Homeless Veterans - this shelter does work for a good cause. (I'd be happy to find them one new donor this season)
Next month - 401(k) ripoff. Save a fortune. HAPPY NEW YEAR!