To hear some tell it, the investing landscape has undergone big changes in 2006 - sort of like the old Wizard of Oz sequel in which hills become valleys and valleys become hills.

I wouldn't call the new rules, adopted this year in Washington and Harrisburg, that earthshaking. But some that deal with investments for retirement and college may be quite valuable to a lot of people.

The accompanying chart on E7 lists most of the big changes of 2006. The key ones remove uncertainty by making permanent some good tax-law changes that were enacted early in the decade but had been set to expire at the end of 2010.

Investment gains in Section 529 college-savings plans are now free of all federal tax if they are used to pay for tuition and other approved college costs, for example. Until this provision was made permanent during the summer, the old rules were set to return after 2010. Those rules merely postponed taxes until gains were withdrawn instead of canceling them.

The 529 plans, sponsored by the states, are a

headache to research. With no guarantee of tax exemption, lots of people felt they weren't worth the trouble.

"The fact that it doesn't expire after 2010 makes it attractive," said Byron Reimus, a free-lance writer and public relations consultant in Yardley. He has more than $80,000 in a Pennsylvania 529 for his son, Clay, a high school senior.

With the tax uncertainty cleared up, Reimus is thinking of increasing his contributions. In fact, in hopes of getting bigger investment gains, he may put future 529 contributions in some other state's plan.

That option became more appealing during the summer, when Pennsylvania enacted rules that exempt all gains in these accounts from state income tax. Previously, that only applied to Pennsylvanians using their state's plan.

"My [investing] window at this point is four years," Reimus said. "We're going to stick with the plan we have here, but the balance of the money we're going to put away for the next few years will go somewhere else."

Also, Pennsylvania this year granted an annual income-tax deduction of up to $12,000 per person, or $24,000 per couple, for contributions to these plans.

Another good change enacted over the summer makes Roth 401(k)s permanent, eliminating the sunset provision that had them expiring after 2010.

Like the regular 401(k), these are retirement-savings plans offered by employers. But while withdrawals from a regular 401(k) are subject to federal income tax, Roth withdrawals are tax-free. The catch is that contributions to Roths are not tax-deductible, as they are with regular 401(k)s.

Roth 401(k)s are new this year and have not taken off, partly because of uncertainty over future tax treatment. With this resolved, more employers are likely to offer them.

They can be especially valuable to younger workers who are in low tax brackets now but could be in much higher ones in the decades to come.

By using the Roth instead of the traditional 401(k), they will give up a relatively small tax savings they could have enjoyed on contributions, but they'll avoid a potentially big tax on future withdrawals.

The Roth also serves investors who just don't want to have tax worries in retirement, and those in higher tax brackets who think tax rates may go up.

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Among the most widely praised changes this year are ones that increase annual contribution limits to IRAs and 401(k)s. Before the Bush tax-cut measures of 2001, the maximum annual contribution was $2,000 to IRAs and $10,500 to 401(k)s.

Those limits were gradually increased under that measure. This year, a person under 50 can put $4,000 into an IRA and $15,000 into a 401(k). People over 50 also can make annual "catch-up" contributions of an additional $1,000 to the IRA and $5,000 to the 401(k).

During the summer, Washington cleared up a lot of uncertainty by making higher limits permanent. (Generally, the 401(k) rules also apply to 457 and 403(b) plans, which are similar retirement plans.)

There's no question this can be very valuable. The Investment Company Institute, the trade group for mutual fund companies, figures that with higher contributions made permanent, a 40-year-old who started an account in 2002 and contributed the maximum every year would have $304,000 by age 65. Had the higher contribution limits been allowed to expire after 2010, the account would grow to just $172,000.

The same investor starting a 401(k) in 2002 and contributing the maximum every year would have an account worth $1.1 million at 65. That compares with $888,000 if the higher contribution limits expired four years from now.

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That all looks good on paper. But in real life, very few workers contribute the maximum allowed, even under the lower limits of the past.

About a third of eligible employees contribute nothing to 401(k) accounts, according to a new study by Fidelity Investments, which manages these plans for about 12,000 companies with nine million eligible employees.

The average employee puts in only 6.9 percent of his salary, though many employers allow up to 20 percent. Nearly half of all 401(k) participants have accounts worth less than $20,000.

Yes, it's nice that you can put a bundle into an IRA or 401(k) - but in practice, many people can't afford to.

Or they don't realize how valuable these accounts are. To address that, Washington over the summer changed the rules to make it easier for employers to automatically enroll new workers in 401(k)s, starting in 2008. Previously, many states barred this, and proponents have touted this change as a big leap forward.

Although employees will have the right to opt out of the plans, various studies have shown that they tend not to. At companies that already have automatic enrollment, about 76 percent of eligible employees participate compared with 54 percent at companies without this feature, according to Fidelity.

During the summer, the Financial Economists Roundtable, composed of about 50 of the country's most prominent economists, put automatic enrollment at the top of its list of beneficial retirement-plan improvements.

"There wasn't much disagreement on that," said Marshall E. Blume, a Roundtable member who is a finance professor at the University of Pennsylvania's Wharton School. Automatic enrollment should lead to better 401(k) participation, which is critical as more and more companies use these plans to replace traditional pensions, he said.

Still, the Fidelity data show that even firms with automatic enrollment generally don't get employees to contribute the maximum.

Perhaps that will change under another new federal rule passed this summer, making it easier for employers to offer workers investment education. While many companies already do this, the advice tends to be generic. Now that employers are protected from lawsuits from workers who follow the advice, more companies are expected to add services tailored to individual workers.

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Taken together, the changes I've discussed, along with others on the accompanying list, are good. But their effects are likely to be modest.

"I have not heard anyone comment to the effect that it's made any difference in their way of investing at all," says Ginger Hoyt of Telford, president of the Delaware Valley chapter of the National Association of Investors Corp., an organization that teaches people to handle their own investments. It has 3,000 members in the Philadelphia region.

Advocates for small investors have long sought two changes that might really make a big difference - but Washington has so far declined to grant them.

One would defer taxes on investment gains, such as annual capital-gains distributions from mutual funds, if they were immediately reinvested. Money that otherwise would be used to pay annual taxes would thus be left in the accounts to compound longer, boosting returns.

The other would allow more people to use Roth IRAs, which offer the same tax-free withdrawals as Roth 401(k)s. Currently, only people with incomes below certain thresholds can contribute to these accounts, and no more than $4,000 can go into them in a single year (or $5,000 for people over 50).

"I love the Roth IRA," said Hoyt, who works for the Department of Mental Retardation for Bucks County. "That's really the one that I want all my money going into at this point because I want it coming back to me tax-free...

"I would like to be able to put a lot more into the Roth IRA each year. What they've allowed up to this point on a yearly basis is not enough."

Absolutely right.

Well, the reformers are always at it. And there's always next year.