American’s today are bogged down with more than just their everyday finances; they are also bogged down with paperwork that accompanies these financial contracts. According to a survey conducted by Consumer Reports, “nearly one-quarter had either lost or forgotten about critical paperwork.” This trend is costing many Americans money, 16 percent had lost money or incurred a charge because of the poor organization of their paperwork.
Below is a list released by Consumer Reports outlining what documents you should keep and for how long.
Documents that you have no long-term need to keep include:
- – Bank records. Keep deposit and ATM receipts until you reconcile them
with your monthly statements.
- Credit card bills. You don’t need to keep them after you’ve paid them
unless they support a deduction you’ll be taking on your taxes, such
as for a charitable donation (in which case you should file the bill
with your current-year tax records). If an item you’ve charged is
under warranty, keep the bill until the warranty expires.
- Investment statements. You can shred your monthly and quarterly
statements from brokerage, 401(k), IRA, Keogh, and other investment
accounts as new ones arrive. But hold on to annual statements until
you sell the investments.
What to keep for a longer period:
Documents relating to investment purchases, loans, and other items that expire can be stored in an out-of the way file cabinet. But try to go through them once a year and toss out papers below including:
- Household furnishings paperwork. Keep receipts, warranties, and
instruction booklets for major appliances and electronics.
- Loan documents. Keep closing documents for mortgage, vehicle, student,
and other loans in a safe-deposit box. You can get rid of them after
the loan is paid off.
- Savings bonds. Hold these in a secure place until you cash them in. Or
you can convert them to electronic form using the Treasury’s
SmartExchange program, at www.treasurydirect.gov.
What to never toss:
Hold on to essential records such as birth or death certificates, marriage licenses, and divorce decrees. Social Security cards and military discharge papers should be kept in a safe-deposit box. Other documents to hold on to forever:
- Defined-benefit pension documents. Keep pension-plan documents from
your current and former employers. Store them in your file cabinet.
- Estate planning documents. Keep copies of wills, trusts, and powers of
attorney in your safe-deposit box. You should also make sure your
attorney and your executor have copies.
- Life insurance policies. For permanent life insurance — policies that
have a cash value or investment component — keep documents and a list
of the companies that issued them and their phone numbers in your
safe-deposit box.
http://www.consumerreports.org
~ Tax season is the perfect time to organize your records.
