Paperwork. It’s not the most exciting part of life, but putting a little work in up front to keep important documents organized and accessible can save a lot of hassle when you need to access them.
But how long do you really need to keep documents? This guide will explain how long to keep your documents, from tax returns to personal records, and offer suggestions for how to safely store and eventually dispose of them.
Keep for 1-3 months
Some paperwork has a short shelf life. When considering how to long to keep utility bills or how to long to keep credit card statements, if your instincts tell you “not very long,” you’re right. Short-term transactions merit short-term storage, and once the payment on a bill clears, it’s typically safe to shred it.[1]
Hang on the following documents for roughly 1-3 months:
- Utility bills
- Credit card/debit card receipts
- ATM & bank deposit slips
- Withdrawal records
Keep for 1 year
Some documents you should keep a bit longer but can clean out after about a year. When you think about how to long to keep paystubs, think about why you might need to refer to them. Once you have a W-2 that matches the income reported on the past year’s paystubs, you can safely dispose of them.[2]Other documents to keep about a year include:
- Paystubs
- Checkbook ledgers
- Deductions for tax purposes
Keep for 7 years
As for how long to keep tax documents, the golden rule of seven years holds true. This extends to any documents that would provide supporting documents that would verify information provided on your tax returns.[3] This includes:
- Bank statements
- W2 and 1099 forms
- Tuition payments
- Charitable donation receipts
- Medical bills/claims
- Any unemployment income stubs
If you own a small business, get even more tax information and tips.
Keep forever
Some documents should be kept forever. Think of it this way: the harder the document is to replace, the more important it is to keep it safe and secure.[1] Government-issued documents and anything that verifies your identity fall into this category, along with:
- Birth certificates
- Death certificates
- Marriage licenses
- Divorce papers
- Social security cards
- Passports and citizenship papers
- Military records
- Annual tax returns
- Wills, trusts, and financial & medical powers of attorney
- Automobile titles
- Deeds, mortgages and bills of sale
- Medical records
- Education records
- Pension plan records
- Retirement plan records
How to keep your documents safe
Once you have your files organized it’s important to keep them safe and secure. Especially if you’re keeping your documents at home (as opposed to in a safe deposit box), you’ll want to protect them from theft or damage in the case of fire, flood or other disasters.
Keep files in a safe
A home safe is a convenient way to store documents while keeping them close at hand. Choose a safe that is fireproof and includes a secure locking mechanism to avoid burglary and be sure to remember how to access the safe for when the time comes.
Scan files digitally as a backup
Scanning documents to store online can be a method to save space and keep backup copies, but it’s important to safeguard those copies. Avoid storing digital files in emails or online storage sites; only use systems that are up-to-date and properly encrypted and password protected.[2]
Properly dispose of documents
When the time comes to dispose of certain documents, take care to do so in a manner that protects you against potential identity theft. Use a shredder to destroy receipts, credit card statements or offers, bank statements, or documents that include your name and credit card number.[4]
[1]https://www.consumerreports.org/taxes/how-long-to-keep-tax-documents/
[2]https://www.nerdwallet.com/blog/finance/save-or-shred-what-to-do-with-important-financial-documents/
[3]https://www.finra.org/investors/insights/save-or-shred-how-long-you-should-keep-financial-documents
[4]https://www.safewise.com/blog/keep-important-documents-safe-home/
