Recently, while contemplating the daunting task of gathering important documents in preparation for personal year-end stuff (oh joy), I began to wonder how much of this paperwork do I really have to keep? It seems that we have boxes upon boxes of documents carefully organized and filed so we can get to them if needed. How often do we really need to access them and how long should we keep them? If you are like me space is not limitless the idea of shredding or burning some of this stuff to make room is actually exciting. So, I decided to do a little research and here is what I found out.
Lets start with what you must never destroy: Life Insurance Policies of any sort (unless you replace or cancel) Disability and Long Term Care or other specialized types of coverage. Marriage Licenses, Birth Certificate/s, Divorce Decrees, and Current Passports. You will also need to keep deeds, mortgage contracts, titles, cemetery plot information and wills (unless they are changed or probated). In addition remember to keep your military discharge papers.
Bank Records: go ahead and keep all monthly statements for the current year. Once you do your taxes then keep any statements that are relevant to prove deductions. You can dispose of the rest. It is advisable to shred any documents containing personal information as a precaution against identity theft.
Credit Card Bills: many companies offer year-end statement analysis. This service is quite convenient for quickly accessing tax related items for personal or business deductions. If you don’t have this consider investigating whether your credit card company offers it. On the other hand, unless you need to keep the statements for tax reasons go ahead and shred them.
Bills and Insurance Premium Invoices: Once you are certain your payment has been received and cleared then you can dispose of accompaning paperwork. Unless they are tax related.
It is also a good idea to keep a running inventory of what is in your safe or safe deposit box. Just like inventorying contents of your home in case of some disaster, you will know what you have and where to find it
Paperwork to keep as it relates to taxes: After 6 years the government cannot audit you unless they suspect you of fraud. So on the 7th year its ok to destroy this information unless you really feel the need to keep it. If that is the case then why not invest in a scanner and save the information to disc or secure cloud.
Junk mail: Things that you may have not considered in order to avoid dumpster divers looking for your personal information, would be those items that you receive on a regular basis through the mail, such credit card, loan applications and the like. These items are a must shredd on the list.
The best time to do all of is of course during tax season. This way you are already sorting through relevant material and can dispose of what is and what not needed.
Well now that we all know that, I don’t know about you but I’ve got plans for the empty space in my attic.
Stacia Musleh, V.P IncomeProtectionSpecialist.com