Document Retention

Document Retention

August 31, 2021

It can be difficult to determine what documents we should keep in our personal filing systems and for how long. It can seem equally as easy to just keep everything as it is to throw everything out. But then you’ve either got mountains of paper stacked around you or you might toss something critical that you need later.

Following are some general rules of thumb from industry expert Michael Lecours on what you should keep in paper form, what can be kept digitally, and for how long. Keep in mind there are exceptions and specific considerations, so pay attention to what might apply to you.

  • Tax documents should be kept for at least three years, but six years is recommended. This includes supporting tax documents in addition to the actual tax return. Generally, these can be kept digitally. Check your state’s specific requirements.
  • Medical documents might be kept for different reasons. If you’re keeping them to support medical deductions on your taxes, then the six-year recommendation stands. Keeping them for an insurance claim would be the longer of the maximum time to submit a claim that your insurance company allows or until a claim is made, paid, and determined by the company to be closed.
  • Legal documents should generally be kept as paper copies in a secure place. This can be your own filing cabinet at home or in an attorney’s files. Key legal documents having to do with estate planning, marriage, death, adoption, etc. should be kept indefinitely. Identification documents should also be kept permanently. These include Social Security cards, birth certificates, and passports.
  • Other miscellaneous documents to keep on file, as well as more detail on those listed above, are included in the attached PDF.

Storage options include a safe place in your home, a safe deposit box, on a personal thumb drive, or using a cloud-based storage solution. There are pros and cons to all of these, and even some specific recommendations against some of these for specific documents. For example, certain legal documents should not be kept in a safe deposit box because of the inaccessibility if something were to happen to you. Keeping documents in your home could put them at risk of fire or water damage. And digital solutions pose certain security risks (and some documents can only be kept physically).

Disposing of key documents properly is important for your security. For physical documents, shredding is the obvious answer. Digital disposal is a little less straightforward, in that most of the time you have to delete them twice. That is, delete files and then permanently delete the same files.

Let us know if you have any questions on best practices for document retention, storage, and disposal.