Save or Shred: A Guide for Personal Records Retention

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When it comes to managing your personal records, most of us likely have a box or drawer full of papers and no clue what to keep, or even how long to keep them. From taxes, statements, bills and more, lifes many obligations often require you to amass documents containing sensitive or personally identifiable information. If you have been saving and storing records for years and have never taken the time to purge and organize your personal records, now might be the time.

If you’re thinking of purging your personal records there are probably a few questions that come to mind  What do you keep? Should you save or shred? And do you really have to shred EVERYTHING!? If you aren’t sure where to start, here are a few tips from H&R Block and Turbo Tax on what to keep and how long to keep it.

The Three Year Rule: 

Most of us have heard of the three-year rule when it comes to financial documents and documents associated with your tax filings. Keep any documents related to tax returns for at least three years, including receipts for large deductions, mileage logs, W2’s, 1099 forms, and anything else directly tied to your income and deductions for a given year. This will ensure you have all the information you need in the event that there is an error with your filing, you are selected for an audit, OR you need to file an amendment to your taxes.

But what happens after 3 years? And what about all the other documents that you collect throughout the year to document things, but may not need after filing taxes (think individual pay stubs, monthly bank statements, bills, contracts, medical records and other files), how long should you keep those items on hand?

We’ve rounded up some “general rules of thumb” for personal record-keeping from a variety of resources and have organized the by record type to help you figure out what you should file away for safekeeping and what items can be destroyed immediately. 

Pro Tip: Create an organized filing system for your personal records by year and record type to make finding documents quick and easy.

Vital Documents

Files that are considered “vital documents” should be kept indefinitely. They include a variety of personal records and forms that contain personally identifiable information so they should be kept in a safe and secure location. Some experts even recommend keeping these types of records in a safety deposit box, they include

  • Birth certificates and Government-issued ID cards. 
  • Passports
  • Social Security cards
  • Wills and Death certificates
  • Titles and loan documents
  • Mortgage Documents and House Deeds
  • Insurance records 
  • Any Business or Corporate Governance Records
  • A household inventory, photos, or video of valuable personal property
  • A list of all of your important accounts and how to access them

Tax Documents

As we stated above, many people default to the 3-year rule when it comes to keeping tax records, as that is the length of time the IRS has to audit “good faith errors.” However, audits can happen as far back as 6 years, if they feel your earnings were intentionally underreported. In the cases of fraud, there is no time limit on audits so some experts recommend keeping records indefinitely. 

Financial Records

While some of your financial records, such as loan documents and tax filings might fall under the “long-term storage” umbrella, there are other financial records that don’t need to be filed away but can pose a potential risk to your personal information. Experts recommend shredding most “regular” financial documents within 30-45 days. This includes things like

  • Receipts
  • Credit Card Statements
  • Account Statements
  • Deposit and Withdrawl Records
  • Monthly Bills

Legal Documents

Be sure to keep any legal documents, contracts, or correspondence on file as long as they are active and for at least seven years after. Depending on the nature of these documents, it may be wise to hold on to them indefinitely. If you are looking to purge some of your legal documents, we recommend that you seek the advice of a legal professional first. 

Insurance Records

As with legal contracts, you’ll want to keep your insurance policy documents on file for the length of time that they are active and for a period of time thereafter. Additionally, according to HerMoney, you’ll want to keep any bills affiliated with your insurance policies or insurance claims on hand for at least 12 months. 

Protecting Your Digital Records

These days, many people maintain personal and financial documents digitally, and while these same archival recommendations stand for digital information, there are a few key differences to consider when working to protect your digital records. 

For many consumers, digital devices such as smartphones and tablets are literal personal information hubs, providing quick and easy access to an array of personal information including banking apps, email, billing information, digital payment platforms, and more. Add those devices to personal computers, backup discs, and could-based backup options and there is a myriad of digital systems that have access to your information. 

Maintaining the security and integrity of those records may seem as easy as having secure passwords, two-factor authentication, or even using new touch ID and face ID features, however, digital device security doesn’t end once you retire your old device for a new one. Many studies have been done to show that with the right skills and tools, even “scrubbed” hard drives and devices can give way to the information they used to store if they end up in the right hands. 

The best way to protect the information on end-of-life digital devices is to have them securely destroyed. Augusta Data Storage offers secure hard drive shredding and environmentally safe electronic waste disposal services. Area residents can take advantage of these services as a part of our drop off shredding service. 

Shredded paper

Purging Your Personal Records

As you work through sorting your files, that pile of documents to get rid of is likely growing. Make sure you take the time to protect your personal information, even after the end of it’s useful life. 

If you’re thinking about what records need to be shredded, your first thought might be “everything!” We definitely support your instinct to err on the side of caution, however, if you do nothing else, make the effort to shred ANY documents if they contain any of the following:

  • Your Social Security Number
  • The SSN of your children or those you are financially responsible for
  • Outdated ID Cards
  • Outdated Credit and Debit Cards
  • Any documents that contain account numbers of any kind (bank account, debit/credit card numbers, retirement accounts, investment accounts, etc)

Some experts also recommend shredding more obscure records that, in some cases, have lead to identity theft such as

  • Junk mail and advertisements for loans, lines of credit and credit cards
  • Children’s school records, medical records, and any documents that contain their personal information
  • Old Health and medical records or insurance documents

If you have sorted through all your documents and have more records than your home office shredder can handle or you’re looking to make sure you get the job done right, you’re in luck! Augusta Data Storage offers a drop off shredding service for both paper records and electronic waste. Simply drop your records, hard drives or other electronic devices by our office on Mike Padget Highway and we’ll get to work ensuring they are securely destroyed and that the paper and electronic waste elements are properly processed and recycled.