How Long Should I Keep My Records?
By Kristi Vaughan
Are long-paid bills, bank statements and other paperwork piling up in your closets, attic and basement? Chances are there is much that you can get rid of. But where do you start? What needs to be kept? What needs to be secured against fire, flood and the like and what can go in the trash?
Start by thinking about your documents in terms of immediate (no more than 6 years), semi-permanent (will need until updated or inactive) and ‘can’t lose’ (will need forever, is irreplaceable or will take time to replace.)
Immediate or short-term storage
The largest group of records will be those that you deal with on a regular basis. These include financial items such as receipts for this year’s taxes, this year’s bills (paid and unpaid), loan and lease records, investment records, sales receipts for items you might not keep, and this year’s bank statements and cancelled checks.
Also in this group are personal papers such as family health records, health benefit information, a record of your computer passwords, warranty and service information and, very possibly, a letter of instruction that tells others where important documents can be found should you die.
Not only will you want to keep this information handy (an accessible file cabinet is a good idea) but also you’ll want to ensure that others in your family know where these records can be found and that they understand your organization!
Semi-permanent storage
These are items that you don’t need everyday but you can’t get rid of right away because they may be needed for reference. These include items such as past tax returns and supporting documentation, past bank statements, cancelled checks and past investment records. The federal Internal Revenue Service recommends that you keep your tax returns and supporting documentation for three to six years from the filing date. Many financial experts recommend the longer time period.
These items can be stored in your house but they should be kept organized and in a dry place.
Permanent storage
These are the items that are either irreplaceable or it would take time and effort to replace. Such items might include birth and adoption certificates, a copy of your will, power of attorney and medical directive, stock and bond certificates not kept with a broker, the deed to your house, motor vehicle titles, military service records, prenuptial agreements, marriage and divorce certificates, records of active life insurance and your Social Security card. These items should be stored in a safe deposit box at your bank or in a fireproof safe.
Replacing documents
Should you lose an important record such as a birth certificate, a stock certificate or other vital record, there is a good chance it can be replaced. Since 1920 each state has been required to register births and deaths. Check with city or state officials where the birth or death occurred. If you lose a stock certificate, contact the issuing company to learn what needs to be done. Original copies of wills, power of attorney and medical directives should be kept with an attorney, especially since a decedent’s safe deposit box is typically sealed after death.
Get started
So now that you know what to keep and what to toss, get out the garbage bags, some storage boxes and rent a bank safe deposit box. It’s time for some housekeeping!
