Buried Under: Managing Your Financial Papers

According to the Environmental Protection Agency, Americans dispose of more than 250 million tons of trash each year, and recycle 82 million or so more. But no matter how much we throw away, we always seem to end up with a stack of paperwork somewhere in the house that just keeps growing.

Am I Keeping Too Much?

When it comes to financial paperwork, it doesn’t have to be that way. In fact, most of us keep way too many old mutual fund statements, bank statements, insurance policies, and back taxes for years or even decades longer than necessary.

What Can I Toss?

Dear Medallion Group,

A very large part of my attic is reserved for financial papers that my husband won’t let me throw out. Can you give us any pointers on what we can throw away versus what we should keep?

Buried Under

Dear Buried Under,

While we don’t know exactly what type of financial papers you’ve accumulated, we’ll go over some of the most common financial documents you might find building up around the house, and whether or not you need to keep them.

Managing Your Financial Papers

Insurance Papers

Don’t throw out policies until they’ve been lapsed for over five years, because life insurance policies may be reinstated within five years after they lapse, depending on your health condition.

You should always keep current insurance policies and old annuity policies that were rolled into new policies, since you could be asked to verify your original cost basis, which the old annuity policies will state. Car and home insurance policies generally renew every six months, and you can throw away the old policies as you replace them with the new ones.

Investment Statements

Most annual statements for investments contain all of your transactions for the whole year. If this is the case with your statements, you can comfortably throw away all quarterly, monthly, and transaction confirmation statements. If there isn’t a year-end statement, you should keep all of them.

Tax and Bank Statements

The IRS can audit your returns for up to six years (according to IRS.gov), so many CPA’s suggest that you keep your tax returns for that long. However, if you have a home or investments in stocks or a business that you have held for more than six years, you will want to keep your returns for as long as you have held the investments, because each tax year is linked by those investments.

Bank statements and reconciled checks should be kept for the same six years, but again, if you have a year-end consolidated statement of all transactions you can throw away all of the monthly statements. Always remember to shred or destroy them if you decide to throw them away.

Still Feeling Buried?

When it comes to taxes and financial paperwork, when in doubt, always keep it! But sometimes it can seem like these papers are taking over your storage space. Keeping financial papers organized can help keep the clutter down and help you maintain your sanity.

Think about keeping your important papers in a fire and weather-proof box. You can also invest in a virtual scanning and filing system, but we highly recommend keeping physical copies as well. If you do store your documents virtually, make sure they are in a highly encrypted and safe program.

At Medallion Financial Group, we believe financial planning is about Family. We have been helping families invest in the future since 1987 through a holistic planning approach. We recognize there are a variety of needs when it comes to retirement planning, plan rollovers, annuities, college planning, life insurance options, and investment management. It is easy to get lost in a sea of choices. Our financial advisors help with the basics and beyond to enable our clients to get the education, advice and management they need to retire with confidence.

Our focus is twofold: first and foremost, we are fiduciary advisors. We stand against any violation of laws, values, and ethics. Second, we treat our clients as part of our family, not only those who call Maryland and Georgia home, but clients across the US who have benefited from our reputation of personal service, integrity, and expertise.

We strive to exceed client’s expectations – because we have high expectations of ourselves.