As our Spring Cleaning Client Shred Event draws near on June 1, I wanted to provide some general guidance on keeping, organizing, and purging important legal and financial documents. Knowing which financial and personal paperwork to keep or toss is very important. Here’s a suggested timeline for keeping/shredding documents.
Documents which should be kept indefinitely—in a secure location:
- Birth/death certificates and Social Security cards
- Marriage Licenses and Divorce Decrees
- Pension plan documents
- Copies of wills, trusts, health care proxies/living wills and powers of attorney (attorney/executor should have copies)
- Military discharge papers
- Copies of burial deeds and plots
- Safe-deposit box inventory
- Copies of all tax returns
Suggested timeline for retaining documents:
- Supporting documents for tax return (7 years) - This is the recommended minimum period of time to retain. Remember, tax return copies should remain on file forever.
- Investment records and statements (7 years) - These are needed for tax filing. Keep for at least 3 years. You may want to keep for the same amount of time as the supporting documents for tax returns.
- Credit card statements (45 days-7 years) - Keep up to seven years if it may be used for taxes, as proof of purchase or for insurance.
- Bank statements (1-3+ years) - Keep for 3 years or longer if you apply for Medicaid, or it pertains to taxes, a business expense, home improvement, mortgage payment or major purchase.
- Medical and dental records (1-5 years) - Keep for at least one year, maybe up to five to be safe. Retain information about prescriptions, specific medical histories, health insurance information and contact information for your physician.
- Utility and phone bills (1 month-1 year) - Shred them after you have paid them, unless they contain tax-deductible expenses—keep them for a year if they can be used for business deductions.
- Insurance policies (until closed) - Keep as long as the policies remain in force.
- Mortgages and other home documents (ownership + 6 years) - Mortgages, deeds and home improvement documents should be kept on file for the length of ownership, plus six years after selling the home.
- Appliance manuals and warranties (if owned) - Keep on file for the length of ownership.
- Vehicle titles and loan documents (if owned) - Keep on file for the length of ownership.
- Pay stubs (until end of year) - There is not a requirement for keeping pay stubs. Keep up to three months if you are applying for a loan. You may want to keep them for a year so you can compare against your W-2.
Be sure to shred any information that has your personal details on it. Should you have any questions or concerns about organizing your documents, be sure to let us know. I hope you found this list helpful and informative.