Knowing which financial and personal paperwork to keep or toss is very important.
Here’s a suggested timeline for keeping/shredding documents.
Documents that 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, healthcare proxies/living wills, and powers of attorney; your attorney and executor should also have copies. Even your financial advisor!
- Military discharge papers
- Copies of burial deeds and plots
- Safe deposit box inventory
- Copies of all tax returns
Suggested timeline for retaining other important documents:
- Supporting documents for tax return: Seven years—this is the recommended minimum period to retain. Remember, tax return copies should remain on file forever.
- Investment records and statements: Seven years—these are needed for tax filings and should be kept for at least three years. You may want to keep them for the same amount of time as the supporting documents for tax returns.
- Credit card statements: 45 days to seven years—keep up to seven years if the statement may be used for taxes, or as proof of purchase or for insurance.
- Bank statements: One to over three years—keep statements for three years or longer if you apply for Medicaid, or if they pertain to taxes, business expenses, home improvement, mortgage payments, or a major purchase.
- Medical and dental records: One to five years—keep for at least one year, and up to five years to be safe. Retain information about prescriptions, specific medical histories, health insurance information, and contact information for your physician.
- Utility and phone bills: One month to one year—shred bills after you’ve paid them, unless they contain tax-deductible expenses. If you can use them for business deductions, keep them for a year.
- Insurance policies: Until closed—keep as long as the policies remain in force.
- Mortgages and other home documents: Ownership plus six 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’s no requirement for keeping pay stubs. Keep up to three months of pay stubs if you’re applying for a loan. The benefit of keeping a year’s worth of pay stubs is that you can compare them against your W-2.
Any information you discard should be shredded if it has your personal details on it. If you found this list helpful and informative, please feel free to pass it along to your family and friends.
Shredding is complimentary here at McKay Wealth Management!