How Long Should I Hold On To My Old Bills & Other Documents?

Thank goodness for electronic billing, bill-pay and account access. The digital world can help you save time, be more organized and cut down significantly on paper… Significantly — but not completely.

No matter how much of your financial life you have online, you still need to save some paper documents. (Okay, maybe you don’t need the actual paper if you scan it all in and back up what you need to save.)

Here’s how to not suck at tossing paperwork.

To hold for a year or less (with some buts):

Monthly utility/cable/phone bills: Once you know the bill is correct, toss it. But if you deduct some of these costs on your tax return, you’ll want to save them with your return (more on that in a moment).

Credit card statements: If you know all the charges are correct, you probably don’t need to keep this. But if you make a big purchase and your lender offers some product protections, consider holding onto that month’s bill. Also, if there’s a deductible purchase on the statement, hold that for your tax return.

Medical bills: Once you know your claim has been paid by your health insurance company, you probably don’t need to save these. But if you’re potentially deducting medical expenses on your tax return, hang on to the bills.

Monthly/quarterly account statements: Hold on to statements from your investment and retirement accounts until you receive the year-end one, which summarizes the previous 12 months. Once you know it’s right, there’s no need to hold on to the monthlies anymore.

Bank statements: Once you know your monthly statement is correct, you can toss the statement at the end of the year. But if you’ve used a check to pay for a large or deductible purchase, hold on to it.

Pay stubs: If you still actually get these, you can toss them after you reconcile them with your W-2 at the end of the year. But if you’re planning to apply for a mortgage, your lender may want to see a few month’s worth.

To hold for longer

Tax Returns: You don’t want to be missing tax-related documents if Uncle Sam has questions about your tax returns. Hold the returns and supporting documents for at least seven years. The IRS can randomly audit you three years after you file — or six years afterward if it thinks you skipped out on reporting your income by at least 25%.

Year-end account statements: These will show the cost basis for your investments, so you want to hold on to them for as long as you have the investment. (And then a bit longer to support your tax return.)

Retirement plan statements: Hold on to your annual statements as long as you have assets in the accounts. This will help ensure your eventual withdrawals are taxed the right way. This is especially important to show if you’ve saved pre-tax or after-tax dollars to your 401(k), and to show your savings to both traditional and Roth options. For your IRAs, be sure to save Form 8606 — the document that shows if your contributions were deductible or nondeductible.

Home-related documents: Keep your purchase documents, and also all home improvement records, which can be used to calculate your cost basis when you sell your home, potentially saving you a bundle in taxes. If you’ve done work that needed a permit or town inspection, hold on to these, too, for as long as you own your home.

Insurance Policies: Hold onto to your policies for home/renters insurance, car insurance and umbrella insurance for the year. When you get a renewal, toss the old one. Keep your life, disability or long-term care policies as long as they’re in force.

To hold indefinitely

Loan paperwork: As long as you’re still paying a loan (car, mortgage, student loan — the works), keep all your docs and contracts. When you pay off the loan, the lender will give you a payoff statement. Keep this forever, just in case some zombie debt comes back to haunt you.

The important stuff: While you can replace the following documents, it will be a major headache. Invest in a firebox or a safety-deposit box for:

  • Birth certificates
  • Adoption records
  • Death certificates
  • Marriage and divorce papers
  • Military records
  • Wills, powers of attorney and health care proxies
  • Social Security cards
  • Passports
  • Appraisals for jewelry, art or other valuable property (unless you sell the item)
  • A videotape of your home’s contents to help with insurance claims in the event of a home fire. Update this once a year.

A few thoughts on e-documents

If you prefer digital to paper, you can download account statements and keep the electronic versions, but make sure they have a place to live that’s beyond your hard drive.

Why?

If your computer ever gives you the dreaded blue screen of death, you need to be sure you still have access to your documents.

But, you say, you can access back statements through your online accounts. That may be true, but do you really want to have to track that all down? And not all online accounts will offer back statements in perpetuity, so it’s better to be safe than sorry.

Instead, to make sure you have what you need, invest in an external hard drive that you back up regularly.

Have a topic you’d like to see covered in How To Not Suck? Or maybe you’re an expert who would like to share your insight with Consumerist readers? Send us a note at notsuck@consumerist.com.

You can read Karin Price Mueller’s stories for The Star-Ledger at NJ.com, follow her on Facebook, and on Twitter @kpmueller.

PREVIOUSLY ON HOW TO NOT SUCK:
10 Tips For Getting Rid Of The Junk In Your Life
How To Not Suck At Picking A Father’s Day Gift
How To Not Suck At Booking A Vacation Rental
How To Not Suck At Making The Transition From School To The Real World
How To Not Suck At Spring Cleaning
16 Ways To Not Suck At Making Mother’s Day Special
10 Ways To Not Suck At Spending Your Tax Refund
15 Things Everyone Needs To Know About Disability Insurance
15 Things People Of All Ages Need To Know About Long-Term Care Insurance
15 Things You Need To Know About Life Insurance
15 Things Everyone (Including Renters) Should Know About Homeowner’s Insurance
15 Things You Need To Know About Buying Auto Insurance
How To Not Suck… At Going To Small Claims Court
How To Not Suck… At Buying In Bulk
How To Not Suck At Planning Your Wedding, Part 5: Spending Your Wedding Cash
How To Not Suck At Planning Your Wedding, Part 4: The Honeymoon
How To Not Suck At Planning Your Wedding, Part 3: The Costly Little Extras
How To Not Suck At Planning Your Wedding, Part 2: The Stuff People Pay Too Much For
How To Not Suck At Planning Your Wedding, Part 1: The Most Expensive Steps
How To Not Suck… At Teaching Your Kids About Money
How To Not Suck… At Valentine’s Day Gifts
How To Not Suck… At Merging Your Money When You Marry
How To Not Suck… At Borrowing For College
How To Not Suck… At Saving For College
How To Not Suck… At Pre-Paying For Your Funeral
How To Not Suck… At Making Financial New Year’s Resolutions
How To Not Suck… At Last-Minute Christmas Gifting
How To Not Suck… At Saving For The Holidays
How To Not Suck… At Charitable Giving
How To Not Suck… At Disputing Credit Report Errors
How To Not Suck… At Lowering Your Utility Bills
How To Not Suck… At Home Inspections
How To Not Suck… At Understanding Credit Card Rewards
How To Not Suck… At Getting Ready For Tax Season
How To Not Suck… At Picking A Retirement Plan
How To Not Suck… At Deciding When To DIY
How To Not Suck… At Getting Out Of Debt
How To Not Suck… At First Year College Budgets

DISCLAIMER: Any websites, services, retailers, or brands mentioned in the story above are only intended as some of many options available to consumers, and do not constitute an endorsement by Consumerist, Consumerist Media LLC (CML) or its staff. Per Consumerist’s No Commercial Use Policy, such information may not be used by others in advertising or to promote a company’s product or service. In addition, this policy precludes any commercial use of any of CML’s published information in any form, or of the names of Consumers Union®, Consumer Media, Consumer Reports®, The Consumerist, consumerist.com or any other of CU or CML’s publications or services without CU or CML’s express written permission.

Read Comments2

Edit Your Comment

  1. WolfDog09 says:

    I might add that if you get a regular bill, keep the previous one until the next one arrives, in case they claim you owe them for an amount from the previous bill but didn’t pay, that way you can look back and see you didn’t owe it.

  2. jenfoolery says:

    If you are thinking about buying property anytime in the next three years, think about being a little more hoardy. I had to produce 3 years of my previous cancelled rent checks to prove I was good at paying bills.