We care about your overall financial well-being and offer the following suggestions for keeping your financial life protected.
Create an organized financial system
Electronic versions of bills, receipts, tax returns and other important documents are becoming increasingly more prevalent. Even so, there's still a place in the world for paper documents—and there should be a special place in your filing system for them as well.
Regardless of whether your records are electronic or paper-based, it's essential to find a system that works for you and to set aside some time to use it on a regular basis.
Observe general recordkeeping guidelines
Tax information – The general statute of limitation for your taxes is 3 years. This means the IRS has 3 years from the time 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 3 years. Each year, you can throw out the 3-year-old documents, but you should keep copies of tax returns forever.
Documents to keep forever – Provide a safe storage place for permanent records such as tax returns, wills, powers of attorney, birth certificates, marriage documents, divorce or child care orders, trust documents, business agreements and military records.
Documents to keep for a while – Retain the following documents for as long as they continue to serve a purpose:
- Insurance policies – As long as they're in effect or until a claim can no longer be filed
- Loan documents – Until they're paid off
- Deeds and real estate papers – As long as you own the property plus any period for tax purposes
- Employee benefits information – As long as you're employed or until the benefit no longer exists
- Investment records – As long as you own the investment plus the 3-year tax reporting period
- Receipts and warranty information on major purchases – As long as you own the item and could make a claim
Monthly statements (excluding bank statements) – Review at least once a year, and shred anything that's no longer relevant.
- Recurring monthly bills – Once you've paid your insurance, rent, mortgage and utility bills, there's no need to keep the bills. You'll have a canceled check or online transaction statement to document payment, and unless there's something special about the bills, you can shred them.
- Credit card statements – Save for a year or so in case you want to return an item or analyze your spending—or in the event of a dispute.
- Bank statements and canceled checks – Keep canceled checks that support tax deductions and any that you think may come in handy. Otherwise, shred them. You may want to keep bank statements for 3 years or so to document payments for important items. Together with your checkbook register, you can identify when and how much you paid for almost anything.
Keep a family records almanac
Putting together a family records almanac can be a major step toward gaining control over the vast amount of information that's important to you and your family.
As more and more of this information becomes digitized, you'll want to decide how much of your almanac to devote to paper records. For example, instead of including a printout of your retirement plan accounts, you may opt to simply document the names and corresponding web addresses of the accounts.
Certain other records, such as birth certificates and passports, can be stored in a binder for safekeeping. As you gather your documents, consider including additional items such as a family tree or information on your pets.
Having your important information in a central location can help provide the peace of mind that comes from knowing you can easily find what you need, when you need it. Here are some examples of the types of information you might want to include.
Family information and history
- Family birth and Social Security information
- Passports, driver's licenses and other travel documents
- Family history
- Family weddings and other important ceremonies
- Education, technical and professional certificates
- Military service and separation or divorce
Permanent financial and personal records
- Primary accounts – Banks, savings & loans, credit unions
- Investment relationships – Brokerage accounts
- Investment relationships – Mutual funds
- Investments – Stocks and bonds
- Other investments or trusts
- Retirement plan accounts
- Places of safekeeping
- Life insurance
- Property insurance
- Health insurance
- Vehicle insurance
Home and other property
- Real estate
- Rental property
- Repair people
- Credit cards
- Lines of credit and loans
- Accountant, estate planning professional and important documents
Organizations and affiliations
- Frequent flier information
- Other organizations
Consider direct deposit
Direct deposit is the fastest, safest and most convenient way to deposit funds into your checking or savings account. You'll no longer need to concern yourself with lost or stolen checks, waiting in line to make deposits, or experiencing delays if you're on vacation or out of town.
Direct deposit also puts your money to work faster, and it can be used for payroll checks, Social Security payments and other government checks.
Most employers make it easy to sign up for direct deposit. Just check with your payroll or human resources department—signing up should take just a few minutes. For Social Security or other government payments, a phone call or a visit to their website is usually all it takes to obtain the form you need.
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