How Long to Keep Financial Records
Posted on by Forest in General, Opinion, Saving Money & Finances
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.
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10 Responses to “How Long to Keep Financial Records”
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Anna
26. Jun, 2010
Actually, one service I have been trying out for this purpose is “Shoeboxed.” I am not 100% sure how it all works on the backend to be honest, as I haven’t looked through everything yet in my account very thoroughly. But I have it set up so that every receipt I receive by email is forwarded to them. The paper receipts, I just keep, in folders by year. I decided that if I ever need to sort them out more than that, I will do it then.
Also, I have a policy that I just keep all receipts – for everything. Even an ice cream cone. The idea is that if I don’t have to think about it, and I just keep everything by default, I am less likely to throw away a receipt and then later realize that I need it. They are so small and don’t take up a lot of space when all is said and done – if stored properly.
Shoeboxed also offers a service for tracking and storing your paper receipts as you mail them in … that is a paid upgrade service.
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Forest
11. Jul, 2010
I really need to organise my keeping of receipts and some kind of system…. Shoeboxed sounds great and will definitely check it out and maybe write about it….
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Financial Samurai
26. Jun, 2010
I really WANT to throw away my taxes that are 7 years older, but I just can’t. Shall I just do that and throw away 1999, 2000, 2001, 2002??
Financial Samurai recently posted..West Coast Living – Yes It Really Is That Much Better-
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Forest
11. Jul, 2010
I think you can throw them away and not face too much trouble but it may be worth scanning them all…. of course it’s worth checking with a pro first.
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Des @ Affiliate Progress
27. Jun, 2010
Hi Forest,
interesting article there. As we are wanting to emigrate in the not too distant future I’ve been wondering how much of this “junk” we need to keep. When we first got married all our paperwork fitted into a single biscuit tin, now we have box files full of the stuff!
Des @ Affiliate Progress recently posted..Secrets for Blogging Your Way to a Six-Figure Income – Review
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Forest
17. Jul, 2010
Tell me about it!!! The darn paperwork grows like weeds! I think going paperless on all accounts you can helps stop the growth but all the old stuff is problematic.
Where will you be emigrating too?
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DonnaLee Willey
08. Jul, 2010
Good morning Forest,
I called the IRS and they told me you should keep all important papers relating to your taxes for three years.
Hope this helps.
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Forest
17. Jul, 2010
Thanks DonnaLee Wiley, that is great info to have
…. 3 is much easier than 7!
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carloan calculator
23. Jul, 2010
This article interests me because It is just the same problem I haven’t figured out till this time. Online programs are sure to do an a convenient way but as for the effectiveness, it still have not been guaranteed. Maybe the best alternative until then is to keep them as well.
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Forest
25. Jul, 2010
I think it’s not a bad idea to keep your stuff as long as it makes you feel comfortable but if you check with the official sources and they say a certain amount of years I think that’s to be trusted.
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