WHAT TO FILE, WHAT TO SHRED

February 18, 2013

Even as we move toward a "paperless" society, there remains a need to keep hard copies of documents.  But what do you keep and what do you discard?  Here is a basic list, but if it's not listed here or you're not comfortable shredding it, check with your accountant or financial planner first:

PERMANENTLY KEEP

  • Documents related to IRA contributions 
  • Annual summaries of retirement accounts (until the next year's copy arrives)
  • Copies of bank records relating to mortgage & housing, taxes & business expenses 
  • Copies of bills/receipts for large purchases for proof of value (until you no longer retain the item)
  • Divorce decrees
  • Birth, marriage or death certificates
  • Documents related to wills and/or trusts
KEEP FOR 7 YEARS
  • Any documents related to personal taxes (pay stubs can be shredded on W-2 has been received for that year)
  • Any documents related to business taxes (including receipt copies/scan and utility bills if you maintain a home office.
When it comes to what you should shred, I err on the side of being overly cautious.  I recommend shredding anything with account numbers (banking, 401K, insurance, bills, credit cards, etc) or identifying information such as driver's license numbers or signature.  I even shred any offers we receive in the mail from credit cards or banks (although they are few and far between once we opted out as explained here.) 

Later this week I will be discussing the Freedom Filer which is a great, simple, self purging filing system that helps you remember what you need to keep and what you can shred.  

  • Share:

You Might Also Like

2 comments

  1. Nice tips. It is really challenging to organize your papers and documents when you don't know what to discard and what to save. There is greater possibility that you may lose something if you don't know how to organize your items.

    ReplyDelete
  2. Sometimes this is really hard to decide that what should be shredded and what should not be. Document shredding should not be done until you are sure that document is not going to be used in future again.

    ReplyDelete