Document Shredding and Retention Guidelines

 

Disposing of financial records

  • Paper records – For financial records you’re ready to discard, you can protect any personal information they may contain by shredding the records before they go into the trash. If shredding on your own, consider using a cross-cut shredder. It rips documents into small pieces and makes it extremely difficult for a fraudster to reassemble. If you don’t own a shredder, commercial shredding services are available.
  • Digital records – CDs, DVDs and external drives containing personal information should also be shredded, destroyed or made unusable in some manner. Computer hard drives deserve special attention simply deleting files or reformatting the drive doesn’t permanently remove all data. Before disposing of, recycling or donating a PC, the hard drive should be removed and physically destroyed.

Retaining financial records

For financial records that you need to keep, be aware that the type of document typically determines how long you should retain it. Documents to keep long term or even permanently include, but aren’t limited to:

  • Birth certificates
  • Business agreements
  • Divorce or child care orders
  • Marriage documents
  • Military records
  • Powers of attorney
  • Trust documents
  • Wills

Consider the following guidelines for how long to retain other types of financial documents.

  • ATM receipts – Discard ATM receipts as soon as you compare them to your bank statements
  • Bank statements and canceled checks – Keep canceled checks that support tax deductions for at least 3 years
  • Keep bank statements and check registers for as long as you might need proof of cash-on-hand or payments for important items, or in reviewing your spending
  • Credit card receipts and statement – Retain credit card receipts until you’re sure you won’t need to return any purchases and you’ve compared the receipts with your latest statement(s)
  • Retain statements for up to 1 year in case there’s a spending discrepancy, or you need to return a purchase or analyze your spending

Home financial information – Keep deeds, mortgages and information on home improvements for as long as you own the home, plus the 3-year period for tax purposes, if applicable

  • Insurance – Insurance policies and claims information should be kept for as long as the policy remains in effect
  • Investment records and statements- Investment records must be kept to support your tax returns. Documentation of purchases and sales (either confirmations or brokerage statements including the information) must be kept for 3 years after you report the sale on your tax return. You may find it helpful to keep brokerage statements for several years.
  • Paycheck stubs – You may need to have pay stubs for the last 3 months if you’re planning to apply for a loan. Otherwise, you can discard each pay stub when you receive a new one. It’s important to shred these documents if they contain personal information like your Social Security number and/or account numbers if you use direct deposit.
  • Tax returns and documents – There’s a general 3-year statute of limitation for your taxes. This means the IRS has 3 years from when you file your return to start an audit. (There’s no limit for fraudulent returns.) Therefore, you need to keep documents that support items on your tax returns for those 3 years. Each year you can throw out the 3-year-old documents, but you should keep copies of tax returns permanently.
  • Warranties – Keep warranties for as long as you own the covered item or until the warranty period expires

We are committed to protecting your personal information. If you suspect your personal information has been compromised, call us at 268-4911.