Do you know where your Social Security card is? What about last year’s tax information?
Whether in digital or physical format, your government, legal and financial documents are an essential part of your life. You may not reach for them every day like you do your car keys or wallet, but when you need a certain document, you want to be able to find it.
It’s also important to keep personal records safe from natural disasters and identity theft. Keep reading to find out how long to keep documents, the best storage options and how to safely dispose of old paperwork.
How long should you keep important documents?
- Forever: Hard copies of estate planning, citizenship, travel and life documents should be kept forever. If you get a new version, you can discard previous versions, but it’s a good idea to hold on to passports even past their expiration date.
- Seven Years: Keep federal and state tax returns and supporting documents (physically or digitally) in case of an audit.
- One Year: If you have a high-deductible insurance plan and use an HSA or FSA account, keep medical records and bills for at least a year for tax purposes.
- Until Updated or Expired: Store rental agreements, real estate deeds, insurance policies and vehicle titles for as long as you own the property or until a new version is issued.
What are your secure storage options?
- Physical Documents: Get a fireproof and waterproof safe to store essential records such as birth certificates, Social Security cards and so on. A bank safety-deposit box may be another secure option.
- Digital Copies: Saving files on your local hard drive exposes them to loss or identity theft if your device is lost, stolen or hacked. It’s better to use a password-protected external hard drive or cloud storage with encryption.
How can you safely dispose of documents?
When important documents are no longer needed, shred paper copies and delete digital files to keep them out of the wrong hands. If you’re recycling or donating your laptop or other device, do a factory reset or use software to erase all personal data.
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