How Long should I keep Personal Financial Records?

Ever wondered how long to keep financial records? Or how long to keep bank statements? What records would be unnecessary clutter? Which records would become most important in the event of errors caused by others? What should you save and what should you shred?

Well here’s a guide on how long to keep your different kinds of financial records. Keep in mind that if you don’t feel comfortable throwing something out, you should definitely keep it!

Financial records to keep permanently / forever

Birth certificates / Adoption paperwork

Death Certificates: Usually needed for closing, canceling, and transferring accounts. Also needed to fulfill life insurance policies, pensions, death benefits, etc.

Marriage Certificates

Wills: This is necessary upon death for the designation of properties, rights, and the deceased person’s requests. Keeping records also assists when there may be errors within the filing system at a registrar such as the clerk of court, or even the lack of filing altogether.

Title Deeds

Financial records to keep for things that are active

If you have active contracts, loans, or other financial obligations/contributions that are active, you want to keep those records indefinitely.

Examples include:

Insurance documents,Contracts, Retirement plan contributions, Equity/stock records, Brokerage statements, Home improvement records, Ongoing debt repayments, Records for items associated with active warranties, Records for items that have not exceeded their return dates.

How long to keep tax returns and documents?

For certain records, after 5 years it is no longer necessary to keep them.

You can however keep them longer if you choose. These record types include:

1. Tax returns

2. Tax-related records e.g. IT3bs, charitable contributions, etc

3. Any documentation that you need for capital gains tax or to support deductions on your tax returns.

Financial records to keep at least 3 years

There are some documents that you can keep for a shorter amount of time but are still considered pertinent to keep. Many of these documents should be kept for three years to provide proof of payment, resolve, or prior claims service.

1. Canceled insurance policies

2. Records of property sales e.g. investments and real estates

3. Paid medical bills (from the final payment of specified treatment)

4. Any documentation that you need for capital gains tax or to support deductions on your tax returns.

5. Any active/open claims under former policies should be kept three years from the date the claim is resolved.

How long to keep bank statements?

Bank statements fall under the category of financial documents to keep at least a year.

These types of documents are typically the more common occurring documents you may have. They are also important to have if you need to dispute a transaction or prove payment or resolve.

Other statement documents you should keep also include:

1. Cancelled checks

2. Payslip records

3. Bill payment records

Note: If any of these documents are a requirement for tax deductions, you will need to keep them longer – see above.

Many companies now offer electronic paycheck records, online bill pay services, and online banking. If you utilize these services and save documents with sensitive data, it is important to encrypt the device and/or the files saved.

It is also important to use common safety measures. For instance, using a device or computer that has updated malware protection, changing your password often, and refraining from using devices you don’t trust.

The right financial record keeping ensures that you are aware of your big financial picture. And very importantly, when you are aware of all your records, you can protect yourself from and quickly identify any theft.

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