Financial Documents: Save, Toss or Shred?
Whether it’s monthly bank statements, receipts, quarterly retirement statements, annual tax returns or other financial documents you receive, it is easy to accumulate what seems to be an unmanageable amount of paper over time. You might find yourself asking if you really need to save all of these records, and if not, when it may be safe to dispose of them.
Here is an overview of how to determine which documents should be saved, tossed or shredded, as well as some additional tips for minimizing and safely discarding documents.
Financial Documents to Save
Documents that prove you are the owner of the asset, such as home deeds, mortgage documents, auto titles, warranty certificates, and stock certificates should be kept for as long as you hold the asset. After you transfer ownership to someone else, you should shred the document if it is not handed over to the new owner in the case the document is duplicated. Home and auto insurance policies should also only be discarded after you receive a renewed policy.
The IRS generally recommends keeping tax records for three years from the filing date or two years from the payment date, whichever is later. Depending on the documents, you may need to keep your tax records for seven years.
Consider purchasing a safe to store these documents and other important paperwork like passports, birth certificates, marriage licenses and more. You may also use a safety deposit box at a bank as an alternative.
Financial Documents to Toss
Some documents do not need to be saved for any period, and you do not necessarily need to shred them either.
Your bank, insurance company, or other organizations may send promotional booklets and flyers that do not contain any personal information. While you should shred the envelope or small slip of paper within—whichever contains your name and address—you do not necessarily need to shred the promotional content. Recycling these as soon as you are done with them will help keep your important documents organized and consolidated.
Financial Documents to Shred
You should shred documents you no longer need to verify a payment, deposit, or purchase that contain your personal information, including name, address, phone number, credit card number (or a part of the whole number), signatures, Social Security number, and account number.
Examples of documents to shred include:
- Utility and credit card bills after you confirm payment
- Bank statements once you look through them and determine there is no suspicious activity
- Receipts once you match the purchase up against account statements
- Expired credit and debit cards
- Quarterly retirement plan statements once you receive your annual statement
Additional tips for saving and shredding financial documents
Consider going paperless when possible, especially for documents you only need for a short time like bank statements, receipts, and utility bills. Be sure to create backups of your electronic copies and save them in multiple places.
It doesn’t hurt to create backup digital copies for some of your more important hard copy documents. This would include home deeds, birth certificates, passports, and marriage licenses. Just be sure to store the digital copies as securely as possible.
Take advantage of your bank’s shred day. Occasionally, Bankers Trust and other banks will designate a “shred day” at their branches so customers can bring in documents to shred. This can be helpful for those who have accumulated many documents and do not have a powerful shredder at home. Keep an eye out for the next shred day at your bank and bring in any documents on your shred list!
Saundra Miller, VP, Consumer Services Manager at Bankers Trust, North Branch—3905 Merle Hay Road, Des Moines. She is responsible for managing all aspects of the North Branch, including business development, community outreach, staff training and development, operations, customer service, budgeting and compliance and security. Contact her at SMiller@BankersTrust.com or (515) 245-5206.