… and for how long?
You might be surprised how many people have financial documents scattered all over the house – on the kitchen table, underneath old newspapers, in the hall closet, in the basement. If this describes your financial “filing system,” you may have a tough time keeping tabs on your financial life.
Organization will help you, your advisors… and even, your heirs. If you’ve got a meeting scheduled with an accountant, financial consultant, mortgage lender, or insurance agent, spare yourself a last-minute scavenger hunt. Take an hour or two to put things in good order. If nothing else, do it for your heirs. When you pass, they will be contending with emotions and won’t want to search through your house for this-or-that piece of paper.
One large file cabinet may suffice. You might prefer a few storage boxes or stackable units sold at your local big-box retailer. Whatever you choose, here is what should go inside:
More from Adams Wealth Management.
Understanding 401(k) Rollovers
Investment statements. Organize them by type: IRA statements, 401(k) statements, mutual fund statements. The annual statements are the ones that really matter; you may decide to forgo filing the quarterlies or monthlies.
In addition, you will want to retain any record of your original investment in a fund or a stock. (This will help you determine capital gains or losses. Your annual statement will show you the dividend or capital gains distribution.)
Bank statements. If you have any fear of being audited, keep the last three years’ worth of them on file. You may question whether the paper trail has to be that long, but under certain circumstances (lawsuit, divorce, past debts), it may be wise to keep more than three years of statements on file.
Credit card statements. These are less necessary to have around than many people think, but you might want to keep any statements detailing tax-related purchases for up to seven years.
Mortgage documents, mortgage statements, and HELOC statements. As a rule, keep mortgage statements for the ownership period of the property plus seven years. As for your mortgage documents, you may wish to keep them for the ownership period of the property plus ten years (though, your county recorder’s office likely has copies).
Your annual Social Security benefits statement. Keep the most recent one, as it shows your earnings record from the day you started working. Please note, however: if you see an error, you will want to have your W-2 or tax return for the particular year on hand to help Social Security correct it.(1)
Federal and state tax returns. The I.R.S. wants you to hang onto your returns until the period of limitations runs out – that is, the time frame in which you can claim a credit or refund. Keep three years of federal (and state) tax records on hand and up to seven years to be really safe. Tax records pertaining to real property or “real assets” should be kept for as long as you own the asset (and for at least seven years after you sell, exchange, or liquidate it).(2)
Payroll statements. What if you own a business or are self-employed? Retain your payroll statements for seven years or longer, just in case the I.R.S. comes knocking.
Employee benefits statements. Does your company issue these to you annually or quarterly? Keep, at least, the most recent year-end statement on file.
Insurances. Life, disability, health, auto, home… you want the policies on file, and you want policy information on hand for the life of the policy plus three years.
Medical records and health insurance. The consensus says you should keep these documents around for five years after the surgery or the end of treatment. If you think you can claim medical expenses on your federal return, keep them for seven years.
Warranties. You only need them until they expire. When they expire, toss them.
Utility bills. Do you need to keep these around for more than a month? No, you really don’t. Check last month’s statement against this month’s; then, get rid of last month’s bill.
If this seems like too much paper to file, buy a sheet-fed scanner. If you want to get really sophisticated, you can buy one of these and use it to put financial records on your computer. You might want to have the hard copies on file, though, just in case your hard drive and/or your flash drive go awry.
However you see your tomorrow, the best time to plan for it is today.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
Citations.
1 – ssa.gov/pubs/EN-05-10081.pdf [7/17]
2 – irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-long-should-I-keep-records [1/24/17]
Other Information:
Adams Wealth Management Group LLC (“Adams Wealth Management”) is a registered investment adviser offering advisory services in the State of Texas and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow-up or individualized responses to consumers in a particular state by Adams Wealth Management in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or pursuant an applicable state exemption.
All written content on this site is for information purposes only. Opinions expressed herein are solely those of Adams Wealth Management, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.
All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment strategy or plan will be successful.
… and for how long?
You might be surprised how many people have financial documents scattered all over the house – on the kitchen table, underneath old newspapers, in the hall closet, in the basement. If this describes your financial “filing system,” you may have a tough time keeping tabs on your financial life.
Organization will help you, your advisors… and even, your heirs. If you’ve got a meeting scheduled with an accountant, financial consultant, mortgage lender, or insurance agent, spare yourself a last-minute scavenger hunt. Take an hour or two to put things in good order. If nothing else, do it for your heirs. When you pass, they will be contending with emotions and won’t want to search through your house for this-or-that piece of paper.
One large file cabinet may suffice. You might prefer a few storage boxes or stackable units sold at your local big-box retailer. Whatever you choose, here is what should go inside:
More from Adams Wealth Management.
Understanding 401(k) Rollovers
Investment statements. Organize them by type: IRA statements, 401(k) statements, mutual fund statements. The annual statements are the ones that really matter; you may decide to forgo filing the quarterlies or monthlies.
In addition, you will want to retain any record of your original investment in a fund or a stock. (This will help you determine capital gains or losses. Your annual statement will show you the dividend or capital gains distribution.)
Bank statements. If you have any fear of being audited, keep the last three years’ worth of them on file. You may question whether the paper trail has to be that long, but under certain circumstances (lawsuit, divorce, past debts), it may be wise to keep more than three years of statements on file.
Credit card statements. These are less necessary to have around than many people think, but you might want to keep any statements detailing tax-related purchases for up to seven years.
Mortgage documents, mortgage statements, and HELOC statements. As a rule, keep mortgage statements for the ownership period of the property plus seven years. As for your mortgage documents, you may wish to keep them for the ownership period of the property plus ten years (though, your county recorder’s office likely has copies).
Your annual Social Security benefits statement. Keep the most recent one, as it shows your earnings record from the day you started working. Please note, however: if you see an error, you will want to have your W-2 or tax return for the particular year on hand to help Social Security correct it.(1)
Federal and state tax returns. The I.R.S. wants you to hang onto your returns until the period of limitations runs out – that is, the time frame in which you can claim a credit or refund. Keep three years of federal (and state) tax records on hand and up to seven years to be really safe. Tax records pertaining to real property or “real assets” should be kept for as long as you own the asset (and for at least seven years after you sell, exchange, or liquidate it).(2)
Payroll statements. What if you own a business or are self-employed? Retain your payroll statements for seven years or longer, just in case the I.R.S. comes knocking.
Employee benefits statements. Does your company issue these to you annually or quarterly? Keep, at least, the most recent year-end statement on file.
Insurances. Life, disability, health, auto, home… you want the policies on file, and you want policy information on hand for the life of the policy plus three years.
Medical records and health insurance. The consensus says you should keep these documents around for five years after the surgery or the end of treatment. If you think you can claim medical expenses on your federal return, keep them for seven years.
Warranties. You only need them until they expire. When they expire, toss them.
Utility bills. Do you need to keep these around for more than a month? No, you really don’t. Check last month’s statement against this month’s; then, get rid of last month’s bill.
If this seems like too much paper to file, buy a sheet-fed scanner. If you want to get really sophisticated, you can buy one of these and use it to put financial records on your computer. You might want to have the hard copies on file, though, just in case your hard drive and/or your flash drive go awry.
However you see your tomorrow, the best time to plan for it is today.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
Citations.
1 – ssa.gov/pubs/EN-05-10081.pdf [7/17]
2 – irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-long-should-I-keep-records [1/24/17]
Other Information:
Adams Wealth Management Group LLC (“Adams Wealth Management”) is a registered investment adviser offering advisory services in the State of Texas and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow-up or individualized responses to consumers in a particular state by Adams Wealth Management in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or pursuant an applicable state exemption.
All written content on this site is for information purposes only. Opinions expressed herein are solely those of Adams Wealth Management, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.
All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment strategy or plan will be successful.
