As I am trying to be a minimalist I am struggling with how long to keep financial records. Ideally I would not keep any but it’s not that easy and sadly you have to keep the records for a number for reasons…. Often no1 being dreaded Tax!
I was always told…. “Keep everything for 5 years”, then I heard “It’s ok to just keep everything for 1 year these days”…. But I am not sure how accurate this hearsay is so I went looking.
This awesome article on Ask Yahoo has some good sense answers.
You can get more details from Yahoo’s article but here are the basics that they advised:
Taxes – Keep them ideally for 7 years.
IRA contributions - Keep them forever
Retirement/Savings plan statements – 1 year or forever.
Bank records – One year to forever
Brokerage statements – during the period of ownership
Bills - 1 year or forever
Credit card receipts and statements – 45 days or 7 years if related to your taxes
Paycheck stubs – Until you receive your w2
House records and receipts – At least 6 years or forever.
What about Paperless financial records?
One thing I could not find was information on how long to keep financial records when you are paperless. My bank and most statements are all online now and I think the institutions only keep the records available to you for 3-5 years on average.
I assume the best thing to do here is print out important records and store them in your filing system. Sadly this defeats the purpose so before doing so I think it is best to check with the company and see if they will be available online for an appropriate amount of time or if you can store them on your computer.
Alternatively you could actually download PDF files of your statements once a month and store them digitally at no real cost to space. This way they will be able to be stored forever and you will be able to print them on demand.
Regarding Tax, if you use efile taxes online free service, tax software or something similar then to file your taxes then you of course have digital records of them. You can keep these saved somewhere safe on your computer like your bank and bill records and as it’s tax you can print out a safe copy too if you really need too.
Please let me know if you have any different information to this or if you feel I have any of the details wrong.