Many of us have mounds and mounds of financial paperwork that we have little idea if we need to keep it or if we can simply throw it away. Here is a list of what financial documents to keep and what to throw away:
Obviously You Need to Keep:
Will, living will and durable power of attorney. All Life insurance policies. Separation and divorce documents. Real estate deeds, titles and property surveys.
Not-so-obvious to Keep:
All Retirement plan documents from your pension, profit sharing, 401(k), and IRAs. Records of nondeductible contributions made to your employer-sponsored retirement savings plan or IRA. All Military records Tax returns and supporting data for at least the last seven years after the original return is filed. Keep buy/sell trade confirmations. Dividend reinvesting statements (for seven years after you file your tax return showing a gain or loss Big ticket purchases Receipts for items under warranty until the warranty expires Pay stubs – until the end of the year when you compare the year end totals with the amounts shown on the W2 form you get from your employer.
Throw Away:
Receipts of bank deposits and ATM transactions, once you verify that the transactions. Canceled checks – save only those needed as support for tax purposes. Bills – once you’ve paid them and verified that the checks have been cashed. Monthly or quarterly brokerage statements – if your annual year-end statement summarizes all transactions made during the year.
Always shred financial documents when they’re no longer needed, along with destroying pre-approved credit card offers. I have heard many stories of identity theft occuring when someone has dumpster dived for your financial documents.