How Long Should You Save Important Documents?
How long should you keep important papers?! Some of us hold onto every little document for far longer than needed, while others regret not saving theirs longer. So, the pressing question is, how long should you hang onto papers for before shredding them? Let’s break it down.
Keep For A Short Time, Then Shred
You’ll want to shred utility bills after your payment goes through; debit and credit card receipts until you compare with your monthly statement; bank statements until you receive or print a new one; retirement plan statements until you receive your year-end statement; and home, auto, and other policies until you receive a copy of your new policy, whether it be physical or digital.
Keep For Next Year’s Tax Season, Then Shred
Any proof of income should be saved until the next tax season, including w-2’s, 1099’s, bank statements, brokerage statements, dividends, and interest; deductions, like medical and dental expenses, child care, and any charitable giving; receipts, including invoices and mileage logs; and any residential documents.
Keep Forever - Don’t Shred
Marriage licenses, divorce and custody decrees; birth, death, and adoption certificates; wills, trusts, and powers of attorney; passports and proof of citizenship; and military records.
Keep While You Own The Asset
Real estate documents, including deeds, mortgage documents, closing documents, and insurance policies; vehicle-related documents, like titles, purchase or lease papers, and auto insurance policy; household-item documents, including receipts, warranty certificates, and the instructions on how to operate the item; and financial documents like investments, stock certificates, and retirement plan records.
Always remember: when in doubt, save! The IRS has recommended guidelines for how long to keep income tax documents. You can check that out here.