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To Shred or Not to Shred...What Documents to Keep and For How Long
Filed under: General, Personal Finance, Adults, Retirees
Maybe your New Year's resolution is to stop being a pack rat. Many people know they need to keep important documents filed away, but what they don't know is what files to keep and for how long to keep them. DECU wants to help. Although we can't come to your home and weed through your files, we can help with a few recommendations.
Credit Card Receipts and Statements - Keep receipts until your monthly statement arrives; if everything is correct, shred the receipts. Exceptions: keep a receipt if you're disputing a bill or to cover a warranty or return period. Keep the statements for 7 years if they contain tax-related expenses.
Paycheck Stubs - Make sure the information on your paycheck stubs matches your annual W-2. When you receive it, then shred the stubs.
Retirement /Savings Plan Statements - Keep quarterly statements until you receive your annual summary; If everything is correct on the annual summary, shred the quarterlies. It's best to hold on to annual statements until you retire or close the account.
Credit Union Records - At the end of each year, go through your share draft carbons or statements and only keep those related to taxes, business expenses, and housing or mortgage payments.
Bills - Keep bills for major purchases to show proof of their value in the event of loss or damage. For other bills, once you know payment has cleared your credit union and the return/refund period has expired, shred that bill.
Tax Records - Keep all 1040 tax forms permanently. You may need your past tax forms for an IRS audit.
IRA Contributions - Keep nondeductible contribution records permanently in case you need to prove you paid tax on the money when you want to withdraw it.
What are you waiting for? Get organized and get started on your New Year's resolution! Maybe now you could fill the empty space you created in your home with fitness equipment and get started on that "other" New Year's resolution.
