The Guide to Financial Documents

What to know about keeping financial documents

If you’re like most people, the amount of financial documents piling up in your home is nothing short of Mt. Everest. Don’t freak out. While you do need to keep some of these documents, you probably don’t need all of them. Here’s what you need to know about storing financial documents.

Documents to Keep Forever

Some documents you should keep forever. Here’s a list of items you should always keep around:

Birth certificates

Social Security cards

Marriage certificates

Passports

Wills

Powers of attorney

Legal filings

Military records

Retirement and pension plans

Inheritance documents

Documents to Keep For At Least 7 Years

You’ll want to hang on to your tax records for at least seven years. This is because the IRS statute of limitations for auditing is six or seven years, depending on the information that triggered the audit.

Documents to Keep For a Year or Less

Some items can be thrown away after a year or so. These include:

Medical bills
Investment statements
Pay stubs
Bank statements
Credit card receipts and statements
How to Store Documents

The best way to store your financial documents is whatever you’re most comfortable with. You can keep them in a locked file cabinet if you prefer to have physical copies. If you don’t mind going digital, you can scan them and keep them on an external hard drive or cloud-based system.

How to Destroy Documents

You have to destroy the financial documents that you don’t want to keep. That means shredding, not simply discarding them in the trash. Scammers love finding vital information in the trash. You need to either buy a shredder, or you can visit a retailer like Staples that has them for consumer use.

SavvyMoney/Chris O'Shea - March 2023