Are you drowning in paperwork pre-tax filing? It’s time to get organizing and toss out those documents you no longer need. But, how long should you actually keep your financial records? Here’s our guideline on how long to keep financial documents to help you get rid of your financial clutter.
Quick Toss-outs: Anything Under a Year
Most receipts can be tossed quickly, except those related to warranties, tax returns, or insurance claims. Keep paper invoices until you find paid statements online and then dispose of them.
Documents to Save for a Year
Hold on to non-tax-related statements like bank and credit card statements, investment statements, pay stubs, and receipts for large purchases for a year. Consider keeping a copy of paid medical bills for possible insurance issues. Switch to digital banking statements to reduce clutter and shred paper ones after a year.
Long-term Tax Document Retention
Tax records should be kept for at least seven years to be safe, given the IRS’s ability to look back further under certain circumstances. It’s advisable to retain tax returns for as long as possible.
Forever Papers: Keep Them Secure
Certain documents like social security card, marriage, death, and birth certificates, wills, powers of attorney, military records, and beneficiary forms should always be stored securely in a locked safe, filing cabinet, or safe deposit box.
Secure Disposal Practices
Prioritize shredding your documents before disposal to prevent sensitive information from falling into the wrong hands. Invest in a good paper shredder for added security.
Still Unsure? Seek Guidance
When in doubt about whether to keep or dispose of financial documents, err on the side of caution. Reach out to your relationship manager for assistance in sorting out your financial paperwork. Declutter your financial life and enjoy peace of mind.
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