Organizing and Retaining Financial Records

Organizing and Retaining Financial Records

Jan 27, 2017

iStock-486981982.jpgJanuary, February, and March tend to be busy months in my household as we collect and sort through all of the prior year’s statements, documents, W-2s, 1099s, charitable contributions, and other tax related documents. It’s the time when we organize all of our records and prepare to do our federal and state tax returns. But the work doesn’t end with filing our tax returns. February and March tend to be the months when we prepare the prior year’s personal balance statement, mull through monthly statements, and determine what we need to keep. It’s that designated time when we update our records and get a feeling of accomplishment that our personal financial lives are once again in order.

Every year I get questions about retaining financial records and want to share my recommendations with you. Technology advancements allow us to scan and store information on computers and flash drives, so not keeping personal financial records shouldn’t be because of a lack of space. Until we get the next technology advancement in digital storage, a flash drive with all of your personal records scanned should meet your needs. We keep two flash drives with the same information – one is kept in our bank’s safe deposit box and the second is in a safe box at our home, for easy retrieval. We add a year’s worth of information and activity to the flash drive under that year’s folder.

Here is a list of things you should keep permanently on your flash drives, sorted under the year of activity:

  • Annual Tax returns and supporting documents, including W-2s, 1098s, 1099s, 5498s, K-1s, etc. and any correspondence from the IRS. 
  • Annual statements on life insurance contracts, Pension plans, IRAs, and tax-deferred annuities.
  • Detailed list of all financial assets and their year-end value.
  • Year-end brokerage statements.
  • Medical records – copies of detailed receipts and payments to providers. Keep copies of insurance claims and payment. 
  • Photos of valuables that are irreplaceable – record purchase dates, receipts, and serial numbers.
  • All legal correspondence.
  • Major purchase receipts – including all records of real estate purchases and dispositions, plus documentation on loans.
  • Copies of Property and Casualty insurance policies and records of any claims.

Here is a list of documents that you should review annually and update to your flash drives:

  • Bank statements, CD statements, and cancelled checks.
  • Vehicle records (purchases and maintenance records).
  • Stock purchase confirmations.
  • Warranties and instructions (for the life of the product).
  • Copies of credit cards and who to notify if lost or stolen.
  • Credit card statements – download the comprehensive year-end statement if available.

Here is a list of original documents that should never be destroyed and should keep them in a safe and secure place with copies maintained on flash drives and in a convenient location at home:

  • Personal Certificates – birth/death/marriage/divorce/naturalization/adoption/religious ceremonies.
  • Passports.
  • Wills, Trust Agreements, POAs.
  • Contracts and leases still in effect.
  • Life insurance contracts and any endorsements. Include copy of any beneficiary change.
  • Alimony, Custody, and Prenuptial agreements.
  • Home purchase documents, including deeds and title papers (retain for additional 7 years after disposition).
  • Military papers (for possible Veteran’s benefits).
  • Social Security cards.

Put your personal financial life in order so you can retrieve information efficiently without storing boxes in your attic, basement, storage unit, or under the bed.

Category: Financial

Julie Cole


CFP®, FLMI, Annuity Product Manager

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