Financial Records and Decluttering: What Goes and What Stays?

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In her bestselling book, The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing, Marie Kondo takes decluttering to the next level.  However, Kondo is silent on the issue of keeping or disposing of financial records.  We thought it would be helpful in the New Year to have a handy summary of how long to keep your financial records.

Type of Record Length of Time to Keep:
Tax Returns and Supporting Documents 7 years
IRA Contribution Records Permanently for nondeductible contributions to show you already paid the tax on the money
Retirement Plan Statements Keep annual summaries until you retire or close the account
Brokerage Statements Keep until you sell the securities
Bank Statements Keep from 1 year to permanently.  Hold on to those they those related to your taxes, business expenses, home improvements
Bills Keep from 1 year to permanently.  Hold on to those bills for big ticket items such as jewelry, rugs, appliances, etc. for insurance purposes.
Credit Card Statements Keep for 7 years if tax related expenses are documented
Paycheck Stubs Keep 1 year
House/Condominium Records 6 years to permanently



Note:  If you are interested in going paperless you can convert your paper records to electronic records by scanning them and saving them.  With the right scanner this can be quick and relatively painless.  We recommend the Fujitsu ScanSnap ix500 if you are serious about scanning!


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