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How To Deal With Important Financial Papers

On a day-to-day basis, good home records make it easier to pay bills on time, find receipts, and reduce the anxiety of paying taxes. What's more, if your home is burglarized or damaged by fire or flood, you'll be able to find vital information without delay. Or, if something happens to you, your loved ones will be able to find your health care power of attorney, insurance policies, medical records, unpaid bills and other items.

As detailed below, you can safely keep most documents in an out-of-the-way locked file cabinet in your home, including documents related to investment purchases, loans, and other items that are past due or sold. Other documents should be stored in an off-site safe, so below we've listed the items to keep there as well.

To help reduce some of the clutter in your home, from time to time, fire up your shredder to get rid of documents that you no longer need. For suggestions on getting rid of other household items, read "How to Get Rid of Almost Everything."

Documents

Where to store them

When to toss them

Bank-deposit slips

At home.

After you reconcile your statements.

Banking statements

At home.

After a calendar year; store with tax returns if they will be used to prove deductions.

Birth and death certificates

Safe-deposit box.

Never.

Brokerage, 401(k), IRA, Keogh, and other investment statements

At home.

Shred monthly and quarterly statements as new ones arrive; hold on to annual statements until you sell the investments.

Credit-card bills

At home.

After you check and pay them, unless you need them to support tax filings.

Employer defined-benefit retirement-plan communications

At home.

Never.

Estate-planning documents

Safe-deposit box.

Never.

Household warranties and receipts

At home.

After you no longer own the household item.

Insurance policies

At home.

After you renew them.

Investment purchase confirmations and 1099s

At home.

Hold until you sell the securities, then keep with your tax records for an additional seven years.

Life-insurance policies

Safe-deposit box.

Never, unless a term policy has ended.

Loan documents

Safe-deposit box.

After you sell your home, automobile, boat, etc.

Marriage license or divorce decree

Safe-deposit box.

Never.

Military-discharge papers

Safe-deposit box.

Never.

Pay stubs

At home.

After you reconcile them with your W-2.

Receipts

At home.

After you reconcile them with your credit-card or bank statements unless needed for a warranty.

Safe-deposit box inventory

At home.

Never, but review and update annually.

Savings bonds

At home.

Cash them in when they mature.

Social Security cards

Safe-deposit box.

Never.

Tax returns and supporting documents

At home.

After seven years.

Vehicle titles

Safe-deposit box.

After you sell the car, boat, motorcycle, or other vehicle.

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