How Long Should You Keep Important Documents? Oct 17, 2017 Even though we are becoming increasingly paperless, we still live in a society that documents everything. It is becoming increasingly important to know for how long we should hold on to these documents, whether paper or electronic. Some people through away documents immediately, and others do not throw anything away. Chances are, there is a middle ground that is more appropriate, but no one seems to know what it is. How long we should hold onto a document depends on what the document is. Here are some guidelines on how long you should keep certain documents. Keep These Documents for Three Months or Less: ATM receipts Credit card receipts Receipts for small or everyday purchase Utility bills Unless you have a specific reason to keep these documents for longer, you can shred these documents after three months; otherwise you will just add more paper to your office. Keep These Documents for One Year: Monthly mortgage statements—Made obsolete by your annual tax statements. Paycheck stubs—Your annual W-2 supersedes these.. Checkbook ledgers (if you use them) Insurance statements and records—A policy renewal or updated statement makes old statements unnecessary. Investment account statements Undisputed medical bills and receipts—If you are having problems with your insurance carrier, keep these; otherwise a year is good enough. Keep These Documents for at Least Seven Years: W-2 and 1099 forms All tax-related receipts Cancelled checks for tax, business, mortgage and home improvement purposes Bank statements Disability records and unemployment income stubs Keep These Documents Forever/Indefinitely: Income tax returns Personal identification documents Legal documents—Marriage certificates, divorce decrees, estate plans, lawsuit final paperwork, etc. All receipts and documents related to your home or real estate holdings—Keep these documents for as long as you own the real estate, and an additional six years after you sell. Vehicle titles and/or related loan documentation--Keep these for three years after selling a vehicle in case anyone has questions. Receipts for all major purchases Annual investment and retirement account statements–Your annual record makes monthly and quarterly statements obsolete, and you should keep these annual records for as long as you keep the account open. Education records—This means transcripts, diplomas, and degrees. All relevant financial planning records—This means your estate planning documents, pensions, medical information, etc. Electronic versus Physical Storage Most people today prefer digital storage. While there is nothing wrong with this, you should back up that digital storage, whether it is in the cloud, external hard drive, thumb drive, or other options. Have at least one back up outside your home (this include cloud storage). That being said, you should still keep a physical copy of the following documents, no matter what. Birth certificates Social Security cards Passports and other legal IDs Marriage license Property deeds and related mortgage documents Vehicle titles and related loan documents Pension plan documentation Insurance policies Financial planning documents Maybe one day we will not need physical copies of these documents, but that day has not yet arrived. Final Tips about Organization Having a good organization system can really make the difference over time. One way may be to create digital folders or physical files separated by the length of time you should keep them. Using multiple folders will require more time to set up, but can make things simpler to sort the individual documents as life continues. Staying organized is a process, and you should review your documents on a regular basis to stay on top of things.
