6 Min Read | Published: June 19, 2024
How Long to Keep Financial Records
How long you should keep bank statements and other financial records varies. See how long you should keep records for tax purposes and personal finance management.
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
At-A-Glance
While some financial documents should be kept indefinitely, others may only need to be kept for several years, one year, or even a month.
An organized financial record system is an important part of managing your money.
Once you establish how you’ll organize your records, you’ll want to safely store them.
No matter what your age or stage of life, effective financial record-keeping is an important part of money management. But many people find themselves wondering, “How long should I keep bank statements or other important documents?”
If you’ve found yourself asking the same question, the answer is that it depends on the situation and the document in question. In this article, we’ll uncover how long you should generally keep important documents, as well as tips for organizing your documents.
How Long to Keep Your Financial Documents
The length of time you should keep a financial document depends on what type of document it is. While some documents should remain with you indefinitely, others can be discarded fairly quickly. Here’s a look at how long you should keep various financial documents.1
- Keep Forever
It’s important to hold on to these financial documents forever as they’re typically only issued to you once and can be difficult to replace:
- Birth certificates
- Social Security cards
- Death certificates
- Passports
- Marriage licenses
- Divorce decrees
- Wills and trusts
- Powers of attorney
- Adoption papers
- Records of paid mortgages
- Military records
- Legal filings
- Pension and retirement plans
- Inheritance documents
- Keep for 7 Years (Or Longer)
Ideally, you should keep tax documents for at least seven years. When it comes to audits, the Internal Revenue Service (IRS) can go back as far as seven years in some situations.2 State statute of limitations vary, so you may want to consult a tax professional for information about the statute of limitations for your state.
Here are some tax-related documents you should hang on to:
- Income tax returns
- W-2 and 1099 forms
- Receipts or canceled checks that support tax income or deductions
- Records of sold houses
- Records of paid-off loans
- Records of sold investments
- Mortgage documents
- Medical records, such as health insurance details and prescriptions
- Keep for One Year
A good guideline is to keep any non-tax-related financial documents for a minimum of one year.
Several examples include:- Pay stubs
- Bank statements
- Credit card statements
- Investment statements
- Receipts for large purchases, like cars or furniture
- Paid medical bills
- Canceled checks
- Keep for a Month
Some documents don’t need to be kept for very long, such as:- Phone and utility bills
- Automated teller machine (ATM) slips
- Receipts for most purchases (unless there is a warranty)
Did you know?
You should keep agreements and contracts, like warranty information and vehicle titles for as long as you own the assets associated with them.3
How to Keep Documents Secure
Now that you know how long to keep different types of financial documents, it’s time to go over how to secure them. These tips can help you keep important papers safe while protecting your identity and sensitive information.
- Invest in a Safe
If you have physical documents, place them in a designated safe to shield them from damage or theft.
- Back Up Electronic Records
Archive, back up, and, if possible, password-protect electronic records.
- Use Safe Passwords
Make sure all of your accounts that contain financial documents have complex passwords that include a combination of letters, numbers, and symbols.
- Dispose of Physical Documents
Shred any paper documents you no longer need to get rid of all traces of your name, Social Security number, and other personal information.
Organizing Financial Records
There are a number of ways that you can organize your vital financial records. Here are some tips to help you get started:
- Determine How to Store Your Paperwork
Start by assigning a home to all of your financial documents. If you have physical records, you may want to keep current documents in a designated and secure folder, binder, drawer, or cabinet. You may also wish to transfer important documents into a safe or tote in a safe place when the year is done. Note that while many financial institutions allow you to access your records online, it’s a good idea to download and save them digitally as well.
- Be Consistent
Once you figure out how you’ll store your electronic records, name them in the same way every time. For example, you may choose a format that includes the month and year of the file as well as a short description of it, such as 2024-May-BankStatement.
- Make a List of Your Accounts
There may come a time when you get locked out of your accounts or a family member needs to log into them. That’s why you should be proactive and create a list of your financial accounts and passwords. Don’t forget to update the list as needed and keep them in a safe spot that only those you trust can access.
- Clean Your Files Periodically
Review your files every month or quarter. Get rid of anything you no longer need. Otherwise, you may become overwhelmed with all of the documents you have and find it more difficult to retrieve what you’re looking for.
Frequently Asked Questions
You can use a shredder to get rid of old financial records with confidential information. Don’t toss them in the trash without shredding or you’ll put yourself at risk for fraud and identity theft.
You can keep important financial papers in a bank safe deposit, but you’ll only be able to access them during bank hours. You may be better off with a fireproof safe at home that’s secure but also easily accessible to the right people.
There are many benefits to organized financial documents. Organized records will make taxes, budgeting, estate planning, and other important tasks easier as well.
The Takeaway
Some financial records should be with you for the long haul while others can be disposed of in a month or so. If you know how long to keep various documents, you’ll gain better control of your finances. You’ll also be prepared in case you or a loved one needs access to an important document quickly.
1, 3 “Keep Or Toss: How Long Should I Hang On To My Financial Documents?,” A+ Federal Credit Union
2 “Financial Documents: What To Save And What You Can Throw Away ,” Forbes
Anna Baluch is a personal finance writer from Cleveland, OH. She enjoys helping people from all walks of life make smart financial decisions. Her work can be seen on Credit Karma, Forbes, LendingTree, Insurify, and many other publications. Connect with Anna on LinkedIn.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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