As spring emerges and the weather begins to warm, it’s not just our homes that could use a thorough spring cleaning – our financial documents could benefit from a tidy-up as well. Consider dedicating some time to organizing and streamlining your financial and tax-related documents. You can start by identifying what financial documents are crucial to retain and which ones can bid farewell by using the guidelines below.
Documents to keep for one year:
- Consider retaining bank statements for one year unless they are necessary for supporting tax filings.
- For investment accounts:
- Retain your quarterly reports throughout the year. At year-end, preserve only the 12/31 year-end report while shredding the rest.
- Similarly, for custodian statements like Schwab, keep monthly statements until the year-end, holding on to just the 12/31 year-end report and disposing of the remaining monthly statements. Most custodians will retain year-end statements for seven years on their systems, which is in line with the recommendation of the Internal Revenue Service (IRS).
- With trade confirmations, it is advisable to retain all buy/sell transaction confirmations for taxable accounts. For individual retirement accounts (IRA), the retention of trade confirmations is optional.
- Please note that for JNBA accounts, your Advisory Team can access Schwab statements and trade confirmations at any time.
Documents to keep for seven years:
- When it comes to tax returns, it’s crucial to note that the IRS can audit the last three years without cause and up to the last six years if 25% of gross income is omitted. Therefore, it is widely recommended to keep the last seven years of returns and supporting documents.
Documents to keep until otherwise updated:
- Certain legal contracts and estate documents like Wills and Trusts.
- Insurance Policy documents should be maintained until you receive an updated policy statement. Additionally, original policy documents should be maintained until the policy is cancelled.
- Social Security Statements should be kept until you receive an updated statement. You can obtain updated statements online at ssa.gov.
Documents to keep related to property:
- Property-related documents, such as home purchase and improvement records, as well as real estate deeds, should be held as long as you own the property.
- Loan documents should be retained until the item is sold.
- Vehicle titles should be retained until the item is sold.
- Any investment certificates should be held until you cash or sell them.
Documents to keep permanently:
- Documents such as birth certificates, marriage licenses, divorce decrees, passports, education records, military service records, life insurance policies, social security cards, and household inventory (updating as needed) should be kept permanently in a safe, fire-proof location.
If you have any questions about keeping appropriate records, including how long to keep certain documents, please reach out to your JNBA Advisory Team.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors, LLC.
Please see important disclosure information at jnba.com/disclosure
