We all have various documents and records that are too important to keep in an ordinary file drawer. These might be for tax, insurance or investment purposes, and we understand the need to retain them in a safe and secure place. The question arises, however, as to just how long we need to hold on to these records. We recommend designating the documents in one of three categories: short term (1-3 years), medium term (6-7 years) and long term (indefinitely).
In many ways, the long-term category – basically, the “forever records” – are among the most important. These would definitely include the following: social security information, pensions and retirement plan documents (including retirement plan contributions), medical history records, information regarding tax disputes, and investment records until disposal of the asset.
It’s important to note that the IRS has three years from the date of filing to audit tax returns, which means your tax returns and supporting information should be kept a minimum of three years. We’d put these into the medium-term category along with such things as bank and credit union statements, income and expense records, brokerage house statements, and more.
The short-term category would have items such as household bills (such as utilities) and expired insurance policies.
We strongly recommend that you go through all your records once a year to dispose of records that are no longer needed – but definitely shred them to protect your personal information.
A handy form describing items in the various categories can be found on our website, www.thorleywm.com, under What’s New, Hot Topics, FAQ.
This communication is strictly intended for individuals residing in the states of CA, CO, DC, FL, GA, LA, MA, MD, ME, MI, NC, NJ, NY, OH, OR, PA, SC, TX, VA, VT. No offers may be made or accepted from any resident outside these states due to various state regulations and registration requirements regarding investment products and services. Securities and advisory services offered through Commonwealth Financial Network®, Member www.FINRA.org, www.SIPC.org, a Registered Investment Adviser. Thorley Wealth Management, Inc. 1478 Marsh Road, Pittsford, NY 14534. Phone 585-512-8453.