You already pay your bills online and get electronic statements, but there are even more ways you… Read more Read more
Note: Opinions vary on the exact dates for retaining records, but these are some basic guidelines from various professional sources that can help you trim your bulging file cabinet.
Documents to Keep ‘Til the End of Time
The documents you should never get rid of are all fairly obvious: They're official papers from government agencies, typically involve lawyers, will be very important to your loved ones if you pass away, related to something of significant value, and/or are a pain to replace. As we noted in our what to keep and what to shred guide. these include:
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- House records: cancelled checks for major home improvements and maintenance (for the length of home ownership) Medical records Photos or video tapes of valuables Tax return copies and worksheets Income tax payment checks Annual IRA or other investment contribution statements, pension/profit-sharing informational returns
Keep physical copies of these documents in a safe place, such as a safe deposit box or a fire-proof safe—one single location that's easy to grab in case you need to evacuate—and also make digital copies for off-site backup. To keep track of your valuable information and share them with your loved ones, see our "in case of emergency kit" .
If you were hit by a bus today or were otherwise incapacitated, would your loved ones be able to… Read more Read more
Documents to Toss As New Ones Arrive
The paper parade is endless. The good news is with every new investment statement, renewed insurance policy, or many other regularly recurring documents, you can keep just the latest version. Specifically, you can shred these documents when you get the
- Monthly or quarterly investment statements (for annual statements, see the next section) Social security statements Annually renewed insurance policies
Documents to Keep Until a Specific Time or Event
Finally, some records can be tossed after certain triggers or time:
- Credit card receipts: After you've reconciled them with your monthly statement—unless it's needed for a warranty or tax filing. In those cases, keep the receipts with the product manual until the warranty expires or with your tax papers. Bank deposit or withdrawal slips: After you reconcile with your monthly statement Credit card and bank statements: 7 years if you need them for tax support, otherwise one year. Annual investment statements: Until you sell the investments, then hold them for 7 years after you sell with your tax papers. Paycheck stubs: After reconciling with your W-2 form and have paid your taxes Health explanation of benefits: 1 year Utility records: At least 3 years, according to NY State Department of Consumer Protection Taxes and supporting records (e.g. tax-related medical bills, donations, etc): The common recommendation is 7 years, because that's how far back the IRS usually goes if you're audited. The IRS has more specific guidelines. with advice varying from 3 years to indefinitely in cases for fraudulent returns).
How Long to Keep Business Records
Finally, if you own your own business or are freelancing, your record retention needs will be more involved. (This is serious business!) CK&Co Certified Public Accountants and Business Advisors' business records retention recommendations (PDF), for example, say you should keep your year-end financial statement permanently, expired insurance policies for four years, and bank statements for seven years.
Dealing with your many records and important documents is a bit of a hassle, but an essential one nonetheless. With a little paper organizing and the checklist above, you'll have a much more organized system—and more room in your file cabinet.