Carrie Schwab Pomerantz

Dear Carrie: The older I get, the more financial paperwork I seem to have. Any tips on how I can organize it for easy access? --A Reader

Dear Reader: The more your financial life becomes filled with things like owning a home, insurance policies, investing accounts and retirement savings -- not to mention income taxes -- the more organized you need to be.

The beauty of today's electronic world is that you don't necessarily have to keep hard copies of every document. But you still need to know what documents you have and where they are, not only for your own sense of security but also for the security of your loved ones should something happen to you. Here's what I suggest to get started.


First, it helps to think of your financial life in terms of basic categories.

For example, you likely have:

--Bank accounts: Checking and savings account statements

--Debt: Credit card statements, car loans, student loans, personal loans

--Home: Lease and security deposit receipt if you rent; mortgage, title or deed and final settlement statement if you own your home; home improvement receipts

--Car: Sales receipt or lease, title, warranties and repair records

--Taxes: Completed returns and receipts for charitable contributions, business and other deductible expenses

--Insurance: Health, auto, homeowner's/renter's, life, umbrella and disability policies; sales receipts for insured big ticket items

--Personal: Birth certificate, marriage certificate, passport, prenuptial agreement, divorce decree, health records

--Retirement: 401(k) and IRA statements, pension agreement, Social Security statements

--Investments: Statements for taxable brokerage accounts, trade confirms, children's accounts

--Estate planning: A current copy of your will, trust(s), durable powers of attorney for finances and health care, advanced health care directive.

Once you have the categories, it's easier to create a filing system to match.


Now look at what's essential to keep and for how long, as well as what you can safely get rid of.

--Personal documents: It's best to pretty much keep these forever.

--Insurance policies: Keep these as long as they're active.

--Tax returns: The IRS suggests that you keep your tax returns (along with supporting documentation, such as proof of cost basis for asset sales, receipts for charitable donations and other deductions, etc.) for seven years.

--Loans: Keep satisfied loan documents for seven years.

Carrie Schwab Pomerantz

Carrie Schwab Pomerantz is a Motley Fool contributor.

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