Checking account statements, retirement account statements, credit card statements, savings account statements, W-2’s, tax returns, paycheck stubs, cancelled checks, insurance policies. The list of financial paperwork and files can grow to immense proportions and if you don’t purge every now and then, the paperwork you should keep might become harder and harder to find.
Here are some tips to decide which financial papers to keep and how long to keep them:
- Marketing materials sent with any statement.
- Credit card solicitations.
Trash these after one month:
- ATM Slips (until you reconcile your banking account statements).
- Receipts (until you reconcile your banking account statements).
Make sure you don’t plan to return the item and that you don’t need the receipt for future warranty claims.
Trash after one year or after you’ve filed your taxes (ALL these should be shredded):
- Brokerage statements.
- Credit card bills.
- Utility bill statements.
- Social Security statements.
- Courtesy of Andy at Saving to Invest (from the comments): I would recommend keeping paychecks. Keep 12 months from your current employer, and then maybe your first and final one from past employers. These could be very useful if asked for employment references etc. Also a good way to see how your pay changes over your career.
Trash only after seven years (and shred these as well):
- Bank statements.
- IRA contribution records.
- Retirement statements (401-k, ESOP, SEP).
- Records of charitable donations.
- Flexible spending account records.
- Tax returns and supporting documentation.
- Records from previously sold real estate.
- Child care records.
- Records on investment purchases.
Keep as long as you own it:
- Insurance policies.
- Receipts for important purchases (jewelry, art, technological devices, antiques).
- Titles and warranties.
- Receipts for renovations, upgrades, or improvements to your personal home.
Never throw away:
- Military records.
- Real estate, jewelry, or art appraisals.
- Birth certificates.
- Financial aid documents.
- Estate planning paperwork (wills, trusts, etc.).
- Power of attorney (special, medical, durable).
- Stock certificates (those are becoming rare!).
- Adoption papers.
- List of contacts (banker, stock broker, lawyer, physician, next-of-kin).
- Divorce papers.
- Citizenship papers.
- List of credit card numbers, banking account numbers, brokerage account numbers, and insurance policies with contact information for each).
Where to keep all these papers?
We generate far too much paper (in my opinion) but much of it is necessary in our society. If possible, consider moving much of your paperwork to a digital format by scanning each of these documents and allowing a service such as Mozy to back up your hard-drive.
Another option is to use a safe deposit box at your bank, but beware: the contents of your safe deposit box are not specifically insured by the bank in many cases. However, you can usually get a rider on your homeowners insurance policy that will cover safe deposit box contents. Some banks DO offer an insurance policy on your belongings should they become damaged or destroyed.
What other important financial papers do you own and what have you been told about how long to keep them?
Photo by Marcin Wichary