Cut The Clutter

Thank Money Magazine for this.  If you are looking for some quick guidelines for how long you should keep financial documents in your filing cabinets (or stacked on your kitchen table), please look below:

DOCUMENT                                               HOW LONG TO KEEP

Tax returns                                                    Forever

Tax backup (receipts, W-2s, etc.)        Six years (IRS has this long to audit)

Year-end investment statements        Until six years after you sell, for proof of gains and losses for taxes

Pay stubs                                                        Until you get your W-2 in January

Receipts for home improvements       Until six years after you sell the home, for tax purposes

Receipts for big-ticket purchases        As long as you own the item, for warranty and insurance claims

Money Magazine, December 2011.  pull-out insert Money Management for the Time-Pressed