Planning matters

Spring (Financial) Cleaning is in the Air!

Spring is in the air! A time to clear the cobwebs, organize the closets, and toss out the clutter. It’s also a great time to dust off and review your financial documents. But what documents to keep, how long to keep them and how to best store them and keep organized? Here are some tips to help:

Tax Documents: Keep tax returns and all supporting tax documentation (receipts, cancelled checks for expenses, retirement contributions, 1099’s, etc.) for at least 7 years.

Loan Documents: Mortgage, student, credit card, car loan documentation should be kept, at a minimum, until the loan has been fully paid. Or indefinitely if you think there will be a question on your payment history.

Paychecks: Paychecks that are not directly deposited to your bank should be kept until year end and compared against the W-2 received to ensure they match. After a year they can be shredded.

Bills / Invoices: If you pay online there is no need to keep a hard copy record. If you receive a bill or invoice in the mail it is best to keep it until the check clears the bank, then shred. Note: Medical bills should be kept for a year before shredding or until any insurance claim(s) are settled.

Bank Documents: You can find most bank and credit card statements by logging into your bank account, so there is no need to keep a hard copy. If you receive hard copies statements, they can be shredded after a year.

Brokerage Statements: Compare quarterly brokerage statements against the year-end annual statement that is issued before shredding. You should keep annual investment statements forever or until assets are sold.

Credit Reports: This is also a good time to review your credit report for inaccuracies. You can receive a free copy of your credit report from each of the three credit bureaus (Equifax, Experian, and TransUnion) once every 12 months. Credit reports can be requested through annualcreditreport.com

­Go Electronic: If you are receiving hard copies of statements and bills, consider going paperless and signing up for electronic delivery of the information. If hard copies are preferred, store them in a file cabinet.

Forever Items: Items like birth/adoption/marriage/death certificates, social security cards / passports, and legal documents (wills, power of attorney, trusts) that you’ll keep forever should also be stored in a secure place at home – either a sturdy filing cabinet or fireproof safe. You’ll want to make sure a family member can access them easily if needed. If in a locked area, make sure you note where the key is kept or the combination.

Shred It: Remember, you do not want to throw out or recycle financial documents without shredding them first. If you have a large pile of documents local shipping & mailing stores offer secure shredding for a fee. Also, be on the lookout for different free ‘Shred Events’ that happen a couple of times a year throughout the county.


Sources: Financial Industry Regulatory Authority, FINRA (finra.org); Forbes Advisor https://www.forbes.com/advisor/personal-finance/financial-documents-what-to-save-what-to-throw-away

Written By Mandy Peterson