By FPA member Abigail Scandlen, CFP®
Last Updated: March 8, 2010
Most people hold onto boxes full of financial records, tax returns and pay stubs they 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-care directive ("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 If you make any changes, be sure to discard the outdated document and keep only the current version to avoid possible confusion. Make sure that the executor of your will and/or the person who holds your power of attorney knows the location of your safe-deposit box key.
- Tax returns: Keep state and federal tax returns and supporting documents for seven years.
- Paperwork on charitable donations: Keep for seven years. If you're ever audited by the Internal Revenue Service (IRS), you'll need a bank record (a cancelled check or credit-card statement) or a written receipt from the charity that gives the name of the charity, the date of the gift and amount. However, for non-cash gifts, you must keep a written receipt from the organization for seven years.
- Stock certificates: Never hold them yourself — not even in a 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 for transfer.
- 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. When you sell your home, you may find that a previous lender failed to record that you paid 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 these forever.
Paperwork Retention Guidelines
The following table is based in large part on a similar table produced by Consumer Reports.
FPA member Abigail Scandlen, CFP®, is an Analyst at Brinton Eaton, a wealth advisory firm based in Madison, N.J.