Cross these 4 items off your year-end investing checklist

Bad news: You will need to take action — and soon.

Use this simple checklist to save money and prepare your finances for 2018.

Perhaps you began the year intending to max out your 401(k). If that has not happened yet, you have until Dec. 31 to fund your account.

The IRS imposes strict contribution limits on tax-advantaged retirement plans. People younger than 50 can save as much as $18,000 in a 401(k) in 2017, and the limit will increase to $18,500 in 2018. Those 50 and older can save as much as $24,000 this year and next. Find out how close you have come to the max this year, then calculate how much of the difference you can set aside by year-end without upending other financial goals.

Finally, ask at work about rules for lump-sum contributions and cutoff dates for plan changes.

Even if you can't hit the max, your late-year contributions will grow over time thanks to compound interest — and they will lower your taxable income. Keep the max-out mentality going into 2018 and you won't face a last-minute scramble again.

Don't ignore taxes until April, especially if you are a mutual fund investor. Hold off on buying funds between now and January to avoid an unnecessary tax burden.

Seasoned mutual fund investors may prefer a proactive approach to avoid capital gains taxes. Eric Aanes, president and founder of Titus Wealth Management, a registered investment adviser, recommends selling actively managed mutual funds before the ex-dividend date and buying index funds instead. Be sure to check the capital gains tax implications before doing so.

This strategy requires precision, and there's a short window of opportunity. "Once the ship has sailed, it's over," Aanes said.

Want a useful end-of-year ritual? Spend some time reviewing your portfolio.

Kate Warne, investment strategist at Edward Jones, recommends doing these three basic maintenance tasks by Dec. 31:

1. Offset gains and losses. Also known as tax-loss harvesting, this involves selling investments at a loss before Dec. 31. The goal? Lower or eliminate the taxes on gains you made in taxable accounts during the year. Note: Investors may claim a limited amount of losses on taxes in a given year.

3. Diversification. Now is a good time to check your portfolio's diversification among assets, such as stocks and bonds, and categories within each. You want stocks and bonds representing different company sizes, industries and locations, for example. Diversification reduces your investment risk by ensuring you are not overly exposed to any individual investment.

Don't wait until January to strategize for 2018.

It's been a remarkable year for stocks, marked by dozens of record highs and low volatility, but don't bank on more of the same ahead, Aanes said. Rather, start preparing for an eventual sell-off. "Investors need to be more cautious," he said.

The prospect of higher volatility in 2018 warrants a focus on diversification, Aanes said. Investors should add foreign stocks and "defensive stocks" to their portfolios — companies that generally do well during periods of uncertainty, such as high-dividend payers that have a record of paying investors regular profits.

Like Aanes, Warne favors international stocks and said diversification will help investors weather a market that's likely to deliver lower returns ahead. She recommends scaling back on risky investments, even as the stock market continues to climb.