Most people hold onto boxes full of financial records, tax
returns and pay stubsthey no longer need. And they don't always
keep the records they do need.
Here are guidelines on what you need to keep, and for how
long.
-
Estate-planning documents:
will, power of attorney, advance health-caredirective
("living will") and health-care proxy. Store them in a
safe-deposit box,but don't put them there and forget it. They
should be reviewed every five years.If you make any changes,
be sure to discard the outdated document and keep onlythe
current version to avoid possible confusion. Make sure that
the executor ofyour will and/or the person who holds your
power of attorney knows the locationof your safe-deposit box
key.
-
Tax returns:
Keep state and federal tax returns and supportingdocuments
for seven years.
-
Paperwork on charitable donations:
Keep for seven years. If you'reever audited by the Internal
Revenue Service (IRS), you'll need a bank record (acancelled
check or credit-card statement) or a written receipt from the
charitythat gives the name of the charity, the date of the
gift and amount. However, fornon-cash gifts, you must keep a
written receipt from the organization for sevenyears.
-
Stock certificates:
Never hold them yourself - not even ina safe-deposit box. All
certificates should be kept by a broker like Schwab,
Merrill,Fidelity, etc. If you have paper certificates,
contact your broker to arrange fortransfer.
-
U.S. Savings Bonds:
Convert them to electronic bonds at the U.S.Treasury or keep
them in a safe-deposit box, with a list of serial numbers at
home.
-
Cancelled checks:
Keep for one year in most cases. Discard checks,check
registers, check statements and credit-card statements after
a year. However,keep checks and credit-card statements needed
to support tax filings seven years.
-
Loan-discharge notices:
Keep "forever" in a safe-deposit box. Whenyou sell your home,
you may find that a previous lender failed to record that
youpaid off your mortgage. To avoid a big hassle, you'll need
written proof.
-
Birth and death certificates, marriage license,
military discharge papers,Social Security card, and permanent
life insurance policies:
Keep theseforever.
Paperwork Retention Guidelines
The following table is based in large part on a similar
table produced by
ConsumerReports
.
FPA member Abigail Scandlen, CFP®, is an Analyst at
Brinton Eaton, awealth advisory firm based in Madison,
N.J.