Knowing when to keep or shred important papers can be challenging. Read this article to find out which is the best option for your individual situation.
Is your home office slowly turning into a mountain of paperwork? You may be asking yourself "just how long should I keep documents?"
If you are confused on which paper records you should keep, then this article is for you. Read here to find out when to keep important papers and when you can safely shred them to protect you and your family's privacy. It's time to reclaim your life from the dreaded "mountain of paper."
Important Papers: What to Keep and How Long
Hardcopy paper files aren't always a nuisance. Some of this paper clutter can be used for future purposes such as work samples for job interviews or reconciling credit card statements.
Once they've served their purpose, you'd be wise to shred these piles of important papers when they contain sensitive information like account numbers, social security numbers or birth dates to protect yourself from identity theft.
The next time the question comes up on how long to keep important papers, keep this list below that gives a rundown on some of the common important papers we accrue in our lives and how long you should keep them.
Important Papers to Keep Short-Term (1 month - 1 year)
Store Receipts - Receipts for everyday items such as groceries, movie tickets or apparel, can usually be kept for no later than a month. These receipts will be handy a jog your memory when it comes time to reconcile them with your monthly credit card statement. Once that task is completed, you can throw them away immediately.
Credit Card Statements - You can safely keep credit card statements for a month or until the next billing period arrives. Paper copies of these statements can help you go back and track your purchases when your mind seems a little foggy on the details of the past transaction. Shred them immediately when the new one arrives in the mail.
Pay Stubbs - Hang onto your pay stubs for the rest of the calendar year to make sure they match what's recorded on your W-2 that arrives just before April. If the stubs and the W-2 match, you can shred the pay stubs after a year.
Important Papers to Keep Long-Term (1 year - 5+ years)
Bank Statements - Try to keep all of your bank statements for at least one calendar year. It's helpful backup information when you're ready to complete your taxes. You can also use your bank statement files to prove your income and qualify for big-ticket items like bank loans.
Retirement Plan Statements - Keep your last three years of retirement savings statements as your near your retirement age. These statements may be used to help calculate your pension and Social Security benefits.
Tax Returns - Retain your income tax filing records for at least six years. The Internal Revenue Service (IRS) can request to audit any tax returns that were filed during the last three to five years. Tax return records will also help you justify any request for an income tax credit or refund.
If paper clutter is invading your life, sort them into the time period categories listed above, scan them and store them on your computer hard drive or in the cloud.
Read more here about different paper shredder styles that can eliminate the paper clutter and keep you safe from identity theft.
Effective equipment and important paper retention will be your secret weapons to conquering "Mount Paper."