How Long Should You Keep Financial Records?

How Long Should You Keep Financial Records?

Do you have drawers and filing cabinets full of tax returns, bills, and bank statements? Here are some tips on exactly how long you should hold on to old financial records.
Papers you only need for 1-2 years:
• Receipts -These can be shredded, if you keep an accurate checkbook ledger, there is no need to keep receipts unless you are using them as back up information for tax purposes.
• Credit Card Bills – After you have checked your credit card statements you can shred your credit card bills. The only time you might need to keep a statement, is if it shows a warranty or if you charge a deductible item.
• Checking Account Statements – Once you reconcile your statements they can be shredded; as with credit card bills, you need to keep them if you are taking a deduction.
• Investment Statements – Monthly and Quarterly statements can be shredded when you receive the new statement. recommends keeping annual investment statements until you sell the investment.
• Insurance Policies – You only need to keep the updated policy renewal; you can shred old policy documents.

Papers you should keep for seven years:
• Tax Records – The I.R.S. requires that individuals be able to produce records for at least three years from the date of return, any of your tax returns in the last three years are subject to random audit. You should keep copies of your tax returns with all of their supporting documents.

Papers to keep indefinitely (preferably in a safe or safety deposit box):
• Loan Documents – Keep all loan documents until the loan is paid off. Once the loan is paid off keep the most recent documents to prove that the loans were fully paid.
• Retirement Statements – suggests keeping your annual 401(k) statements and any nondeductible IRA contributions. Including information from current and past employers.
• Life Insurance Policies – Life insurance policy documents should be kept until the covered person dies, or until you cash in the policy. Term life policies only need to be kept until the term expires or the covered person dies.
• Estate Documents – Any documents related to estate planning; wills, trusts, powers of attorney etc. should be kept for as long as they are in effect. You should also have copies for your attorney and for your executor.

When you choose to get rid of your documents, do so carefully, to avoid potential identity theft. Proper shredding and filing is an easy way to protect yourself against identity theft. Members can bring in shredding (1 box per visit) into any one of our branch locations during regular business hours to be placed in one of our locked bins.

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