All of us have a lot of paperwork that comes into our homes each week. It’s hard to know what to keep, so many Americans simply keep it all. Of course, that quickly becomes unmanageable, and it’s nearly impossible to find something you need.
So really, how long do you need to keep papers? It depends on what they are. Here are several categories of paperwork and how long to hold on to them.
Vital Documents & Major Events: Forever
Any paperwork that verifies your identity or documents a significant life change needs to be kept forever. These documents are essential when it comes to proving who you are and what has happened to you. You’ll use these to secure state and federal identification, verify activities, and even reclaim your identity if it’s stolen.
- Social security cards, birth and death certificates
- Marriage and divorce papers
- Military discharge paperwork
- Life insurance policies
- Wills and inheritance paperwork
- Lawsuits and settlements
- Defined benefit plan details
The experienced insurance professionals at Freeway Insurance recommend keeping your insurance agent’s card with you at all times.
Tax Paperwork: 7 Years
The IRS has up to six years to collect taxes on a specific year’s filings, so you’ll want to keep your tax returns for seven years. That way, you’ll be on the safe side in case there’s any action against you or any corrections that need to be made on those tax forms.
Don’t just keep your returns, be sure to keep all of the supporting documents that go with them, including receipts, 1099 or W-2 forms, charitable giving receipts, tuition payments, and brokerage statements.
Before you make the final decision to shred your tax papers that are more than seven years old, be sure they aren’t important to a bank or creditor. For example, your bank might need specific financial information from the past to validate a mortgage.
Statements and Paystubs: One Year
Bank statements, pay stubs, insurance policy information, and other important financial documents should be kept for one year or until the policy or loan expires. For example, you should keep car loan documents for the life of the loan. You should keep insurance paperwork until the next insurance policy period, which is generally six months to a year. You can keep these as physical papers in a file or as a digital record on a secure drive.
Do You Really Need Those Papers?
Most of the bills you receive each month can be discarded as soon as you confirm payment is made. The rest of this list can help you realize that you really don’t need to keep a lot of the paperwork that you’ve been stockpiling.
Keep the papers you need, organize them and you’ll be able to lay your hands on them when needed. The rest you can securely shred.
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