How long should you keep financial and personal records?

If you are like many people, you have drawers and boxes filled with old financial and personal documents that you have diligently saved over the years. The good news is, you don’t have to keep most documents forever. Put document shredding on your annual ‘cleaning’ list. Below are some guidelines of how long you should keep different kinds of documents, compiled from various sources.

Financial Records

  • Taxes – keep records for seven years, including both tax returns and supporting documentation (the IRS has three years from your filing date to audit your return if it suspects good faith errors, six years to challenge your return if it thinks you under-reported your gross income by 25 percent or more; there is no time limit if you failed to file your return or filed a fraudulent return)
  • IRA contributions – if you made non-deductible contributions to an IRA, keep the records indefinitely to prove that you already paid tax on this money when the time comes to withdraw
  • Retirement/savings plan statements – keep the quarterly statements from your 401(k) or other plans until you receive the annual summary then shred the quarterlies if everything matches up; keep the annual summaries until you retire or close the account
  • Bank records– go through your records each year and keep those related to your taxes, business expenses, home improvements and mortgage payments; shred those that have no long-term importance
  • Brokerage statements – keep until you sell the securities; you need the purchase/sales slips from your brokerage or mutual fund to prove whether you have capital gains or losses at tax time
  • Personal bills – shred most personal bills as soon as the payment has cleared; however, bills for big purchases such as jewelry, rugs, appliances, antiques, cars, collectibles, furniture, computers, etc should be kept in an insurance file as long as you have them for proof of their value in the event of loss or damage
  • Credit card receipts and statements – keep your original receipts until you get your monthly statement, then shred the receipts if the two match up; keep the statements for seven years for tax-related expenses
  • Paycheck stubs – keep for one year; when you receive your annual W-2 form from your employer, make sure the information on your stubs matches; if it does, shred the stubs; if it doesn’t, demand a corrected form, known as a W-2c
  • House/condominium records– keep all records documenting the purchase and ongoing cost of improvements such as remodeling, additions and installations; keep records of expenses incurred in selling the property and that settlement statement for seven years after you sell your home
  • Mortgages – keep records of satisfied mortgages for as long as you own the property
  • Satisfied loans – keep records for 7 years

Personal Records

These documents should be in your ‘keep’ file…

  • Birth and death certificates
  • Citizenship papers
  • Marriage and divorce decrees
  • Wills
  • Adoption papers
  • Estate plans
  • Insurance policies
  • Military discharge records
  • Deeds and titles to real estate and real property such as cars and boats until they are are sold
  • Cemetery deeds
  • Safe deposit box records
  • Stock or bond certificates that are not held electronically
Written By

I love what I do! Highly insightful, analytical and creative, there is nothing I love more than helping you find the right solution for your real estate transition. My mission is to serve my clients with honesty and integrity, exceeding their expectations in service and support… and to help others by donating a portion of every transaction to Habitat for Humanity.

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