Of all the jobs that come with downsizing, few feel as nerve-wracking as the “file purge.” Filing cabinets, desk drawers and shoeboxes full of paperwork can hold decades of financial and legal history, and it’s natural to worry that you’ll toss something you should have kept.
The good news is that most paperwork doesn’t need to be kept forever. As a general rule, documents should be kept as long as they serve a useful purpose, or until every legal and regulatory requirement has been met. Once you know the timelines, the pile gets much smaller, and much less scary.
The guide below, taken from the Pathway Senior Movers planning booklet, breaks common household records into simple categories so you can sort with confidence before your move.
These are general-purpose record retention guidelines. If you have unusual or extenuating circumstances, please check with your accountant or attorney before discarding any important legal, business or financial paperwork.
Keep for 1 Month
- ATM printouts. Once you’ve balanced your checkbook or reviewed your monthly statement, the ATM receipts can go.
Keep Until the Warranty Expires or You Can No Longer Return the Item
- Sales receipts. Hold on to them until the return window or warranty ends. If you need a receipt for tax purposes, keep it for 3 years.
Keep for 1 Year
- Paycheck stubs. Dispose of them once you’ve compared them to your W-2 and annual Social Security statement.
- Utility bills. Toss them after a year, unless you use them for a deduction such as a home office. In that case, keep them for 3 years after filing that tax return.
- Canceled checks. Keep for 1 year, or 3 years if they’re needed for tax purposes.
- Credit card receipts. Keep for 1 year, or 3 years if they’re needed for tax purposes.
- Bank statements. Keep for 1 year, or 3 years if they’re needed for tax purposes.
- Quarterly investment statements. Keep these until your annual statement arrives.
Keep for 3 Years
- Income tax returns. The IRS can generally audit a return for up to 3 years after it’s filed. That window grows to 6 years if more than 25% of your gross income was left off, and there’s no time limit at all if a return was never filed.
- Medical bills and canceled insurance policies.
- Records from selling a house, which document capital gains for tax purposes.
- Records from selling stock, which also document capital gains.
- Receipts, canceled checks and other documents that support income or a deduction on your tax return. Keep these 3 years from the date the return was filed, or 2 years from the date the tax was paid, whichever is later.
- Annual investment statements. Keep for 3 years after you sell the investment.
Keep for 7 Years
- Records of satisfied loans.
Hold While Active
Some documents matter for as long as the account, policy or property is part of your life. Keep these while they’re active:
- Contracts
- Insurance documents
- Stock certificates and records
- Property records
- Records of pensions and retirement plans
- Disputed property tax bills. Keep the bill until the dispute is resolved.
- Home improvement records. Hold these for at least 3 years after the due date of the tax return that reports the income or loss when the home is sold.
Keep Forever
These documents are difficult or impossible to replace, so store them somewhere safe, such as a fireproof box or safe deposit box, and bring them with you on moving day rather than packing them on the truck:
- Marriage licenses
- Birth certificates
- Divorce documents
- Wills
- Adoption papers
- Death certificates
- Records of paid mortgages
Tips for a Smoother File Purge
Work one drawer at a time. Sorting a lifetime of paperwork in one sitting is exhausting. Set aside short sessions and tackle one drawer or box at a time.
Sort into three piles. Use “shred,” “keep” and “ask first.” Anything you’re unsure about goes in the “ask first” pile for your accountant or attorney.
Shred, don’t just toss. Anything with a Social Security number, account number or signature should be shredded rather than thrown in the trash.
Keep important papers with you. On moving day, your “keep forever” documents belong in your personal bag alongside your jewelry and medications, not in a moving box.
Let Pathway Senior Movers Help
Sorting paperwork is one of the most emotional and time-consuming parts of downsizing, and you don’t have to do it alone. Our team can help you organize files, set aside what needs to be shredded, and make sure your most important documents arrive safely at your new home.
Ready to get started? Contact Pathway Senior Movers today to schedule a consultation.
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