Need help organizing your financial documents?
If you don’t have a clear idea of how long you need to keep your various financial documents, you’re not alone. Many us of end up keeping everything, and the piles just keeping growing – sometimes at an alarming rate. Here is some guidance to help determine how long to keep your records.
Keep less than a year
- Retain ATM, bank deposit and credit cards receipts until you reconcile them with your monthly statements. (Then you can shred them unless you need them to support your tax return.)
- Insurance policies and investments statements should be retained until you receive updated documents.
Keep for a year or longer
- Retain loan documents until the loan is paid off.
- Car titles should be retained until you sell the vehicle.
- For stocks, bonds and mutual funds, keep purchase confirmations so you can establish your cost basis and holding period.
Keep for seven years
- Keep all tax records for seven years. The government has six years to collect taxes or start a legal proceeding involving tax returns.
Keep forever
- Birth and death certificates
- Marriage licenses
- Divorce decrees
- Social security cards
- Military discharge papers
- Defined-benefit plan documents
- Estate planning documents
- Life insurance policies
- Inventory of your safe deposit box
Storing your files
- Use a fire-proof safe or a password-protected electronic file for bank and investment statements, estate-planning documents, pension information, pay stubs and tax documents.
- You may want to consider using a safe deposit box for papers that cannot be easily replaced (birth and death certificates,
- Social Security cards, passports, life insurance documents and marriage and divorce decrees).
Backing up electronic files to the cloud is a good idea as long as the provider uses encryption technology.
