The Shelf Life of Documents

Published Thursday, October 21, 2010 1:58 PM

Documents don't come with the handy expiration date found on cartons of milk. So it's not always easy to tell if your paperwork has reached its "past sell" date. Interested in purging your filing cabinet and hard drive of documents you no longer need? We've assembled a list courtesy of ConsumerReports.org with advice on what to save for now, what to keep forever and what can (happily) be tossed.

Short timers: Keep for a year or less

  • Bank records: Keep deposit and ATM receipts until you reconcile them with your monthly statements. File statements until tax time, keep any you need to prove deductions; shred the rest.
  • Credit-card bills: Check them, pay them and shred them unless you need to support a tax deduction. Also keep statements for purchases of items under warranty, shred when warranty expires.
  • Current-year tax records: Keep for the year.
  • Insurance policies: Keep policies that you renew each year and shred the old one's after renewing.
  • Investment statements: Shred monthly statements after the new one arrives. Keep annual statements until you sell the investments.
  • Pay stubs: Keep the calendar year's records until you reconcile them with your annual W-2 form, and then shred them.
  • Household furnishings paperwork: Keep receipts, warranties, and instruction booklets for appliances and electronics. Toss when the warranty expires or you no longer own the item.

 

Depends on You: Time frame varies

  • Investment purchase confirmations: Keep to establish your cost basis and holding period when you sell the investments; if this information appears on your annual statements, keep those instead. Once you sell the investment, shred the old statements and move the sales paperwork into this year's tax file.
  • Loan documents: Keep closing documents for mortgage, vehicle, student, and other loans in a safe-deposit box until loan is paid off. Then shred.
  • Savings bonds: Keep in a secure place until you cash them in. Or you can convert them to electronic form using the Treasury's SmartExchange program, at www. Treasureydirect.gov. http://bit.ly/dr88tL
  • Vehicle records: Keep purchase receipts, titles, and registration information in a safe-deposit box as long as you own the car, boat, truck, or other vehicle. Store the maintenance and repair records. Toss when you no longer own.

Seven Years: The magic number for tax documents

  • Federal and state tax returns and their supporting records.
  • Receipts, bank statements, investment statements and all paperwork with tax-related information.

The Long Haul: Essential records to be kept permanently

  • Birth and death certificates
  • Marriage licenses
  • Divorce decrees
  • Social Security cards
  • Military discharge papers
  • Defined-benefit plan documents: pension-plan documents from your current and former employers.
  • Estate-planning documents such as wills, powers of attorney, health care proxy.
  • Life-insurance policies
  • Safe-deposit box inventory: Note the location of the box and your keys, and keep a list of what you have in it.

 

For those of you who have gone largely paperless, storing photos, bank statements and even scanned copies of vital records on your computer, keeping even years worth of material takes very little space. For you paperless people, purging the physical clutter is less important than ensuring that your files are adequately backed up. A recent USA Today article MiMedia Backs Up Digital Files While Saving You Serious Time showcases a new technology that makes backing files up easier than ever. The article also discusses the pros and cons of using storage methods such as external hard drives.

How do you back up important digital records? What type of fling system do you use to keep vital records at your fingertips? Share your thoughts here and at the Beyond Folders Facebook page.

by Bradley Eggers

 

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Comments

# bambing said on Friday, October 22, 2010 12:33 AM

Good info, thanks!

# anniemos said on Friday, October 22, 2010 1:28 PM

great information, thanks!

# Ela said on Friday, October 22, 2010 2:49 PM

Great advice .. thank you!

# devance said on Friday, October 22, 2010 4:14 PM

I disagree with tax returns being destroyed after seven years. My husband worked for fifteen years at a copper mine in Arizona that closed its doors in the 80's. They had a separately funded retirement account that he was vested in. When he contacted them to start the paperwork this year (2010) he was told they had no record of him ever having worked at that company. If we hadn't kept the tax returns with the accompanying W2's we would have had no proof of employment.  I have since talked to a few CPA friends and they all recommend keeping tax returns until at least your retirement.

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