What Documents Should I Keep vs Shred?

It’s easy to throw up your hands in exasperation when it comes to filing papers and documents at home, and you’re likely tempted to shred everything to be done with it. Still, keeping good records will reduce clutter, prevent identity theft, and reduce stress. No more searching for needed paperwork!

The principles of good record management for businesses also pertain to personal recordkeeping. They are accountability, transparency, integrity, protection, compliance, and accessibility. Consider the following principles (and time frames) when deciding what to keep or shred for your document management plan.

Documents to Shred Immediately

The following are documents that you should shred immediately to protect your personal information:

ATM receipts and reconciled paper bank statements
Old credit card bills (after charges have been verified)
Paid utility bills
Expired warranties
Canceled and voided checks
Junk mail
Store receipts (after the return period is over)
Any statement with your credit card number, social security number, phone number, or other personal information

Documents to Shred After 7 Years

While you should shred some documents immediately, some should be kept for about seven years to refer to their information.¹

Here’s a list of what to shred after seven years:

Paperwork related to an estate settlement or a loved one’s death
IRS tax returns (the IRS has three years for an audit, which can be extended to six years if an investigation is warranted)²
Tax-related receipts
Other tax forms and tax records
W-2s and 1099s
Investment records (shred them seven years after you’ve sold the securities or closed the investment accounts)

Documents to Shred After 10 Years

You should keep some documents for reference for up to ten years, including:

Medical records, such as hospital discharge papers, prescriptions, and medical tests
Receipts for home repairs (kept receipts until you sell your home and need them to calculate potential capital gains taxes)
Purchases with a warranty (i.e., major appliances)

Documents You Should Never Shred

Of course, there are some important documents you should never shred, such as:

Legal records
Birth certificates
Social security cards
Divorce decrees
Death certificates
Wills or living wills
Marriage licenses or prenup agreements
Passports
Insurance documents
Mortgage documents
Vehicle purchase or lease documents (until you sell the vehicle)
Stock and bond purchase documents (as long as you own them)

In addition to the lists above to help you decide which documents to keep or shred, the Federal Emergency Management Agency (FEMA) has compiled an Emergency Financial First Aid Kit for paper documents to have handy in an emergency.³ Storing these documents in a loose-leaf binder with plastic sleeves is an excellent way to keep them easily accessible:

Legal records
Birth certificates
Social security cards
Divorce decrees
Death certificates
Wills or living wills
Marriage licenses or prenup agreements
Passports
Insurance documents
Mortgage documents
Vehicle purchase or lease documents (until you sell the vehicle)
Stock and bond purchase documents (as long as you own them)

When shredding any documents on your own the preferred shredder would be one that cuts pieces into a cross-cut, diamond-cut, particle or confetti-cut. Avoid using a strip-cut model which are considered the least secure where the pieces can be easily reconstructed. Once you know what documents to shred and systematically file the rest, you’ll be ready to file taxes, manage your budget, and easily locate the required papers in case of legal actions or audits. You can rest easy, knowing your paperwork is all in order—safe and secure.