Some of us are pack rats by default; we don't know how long to keep what we think are important documents, so we store them in boxes indefinitely. Clueless clutter makes it difficult to find something when you actually need to reference it. Stop storing trash and get organized when you learn how long you should hold onto certain papers.
- Documents to Keep For Life - While it's possible to get replacement documents, it's more of a hassle than storing these documents in a safe place, forever. Get attached to birth, death, and marriage certificates, adoption papers, divorce decrees, health records, life insurance policies, wills, and social security cards.
- 7-Year Rule - You should keep most tax-related documents for a minimum of three years, but it's recommended that you keep them for seven years. Separate the related paperwork by year so you don't have to sort through everything when it's time to purge older documents.
- Auto - Hang on to documents that have to do with your vehicle, like registrations, repair receipts, warranties, and user manuals, as long as you own the car.
- Bank Statements - If you've gone paperless, then your bank will generally store your statements for seven years, but check to see what your bank's policy is on maintaining its customers' records. Hang on to canceled checks for a year.
- Monthly Bills - As long as you don't need them to claim tax deductions, you can throw away monthly bills after you've checked their accuracy. If you're canceling a service, it's recommended that you hang on to the final statement that shows your account is paid in full for a few years in case it appears in collections out of the blue.
- Credit Accounts - Unless you need it for tax purposes or you have an outstanding loan, statements connected to credit accounts can be discarded after you've confirmed their accuracy. If you have records pertaining to a settled collections account, keep them indefinitely as proof if the issue resurfaces.
- Employment Records - Keep W-2 forms for seven years, and I recommend holding onto offer letters for the extent of each position as well as performance evaluations.
- Pay Stubs - You can dispose of pay stubs after you've received your annual W-2 and validated all details are accurate.
- Real Estate Records - You'll want to hang on to all documents pertaining to your home for at least the time that you own it, including sales contracts, deeds, mortgage paperwork, appraisals, etc. For tax purposes, keep all transaction records and receipts for any costly home improvements.
- Insurance - Get rid of any expired policies and claims information that won't get you tax-deductions, but store any papers connected to insurance payouts for at least seven years and hold on to current coverage policies until they're irrelevant.
- Investments and Retirement Accounts - Maintain transaction records for taxable accounts and keep your annual 1099s for at least seven years. You don't need to keep track of any transactions in your retirement accounts because they don't involve tax implications, but you should hang on to any papers related to nondeductible contributions.
- Receipts - Consider keeping receipts for expensive items in case you need to make an insurance claim, and it's always good to hold on to receipts for items that came with a warranty so you have proof of purchase.
- Warranties - You can trash warranties when they expire. There's no need to hang on to something that's no longer effective.
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