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Know when to shred or keep bank documents and other information

It shouldn’t take a death in the family or impending tax deadline for the clutter of financial records in your home office to get filed away properly. Take a little time to go through that stack. Since we all walk the line between becoming unprepared for an audit, or a victim of identity theft, knowing what to shred and what to retain, how long, and where to keep documents and other sensitive information are very important considerations. Here is some advice to keep you safe and prepared.


Do

Do sort your records according to how long you need to keep them

Not every piece of paper and document with personal information or account number is created equally.

• Documents like ATM receipts, deposit slips, and receipts from credit card purchases only need to be kept until you see the update on your (online) bank statement. If you primarily rely on paper statements in the mail, receipts for credit card purchases and credit card statements should be kept for 30 days, or until you receive the next statement.

• Documents like pay stubs, bank and investment statements, and medical receipts need to be kept for one year, or until the next tax filing season.

• Documents that support Tax Returns, 1099, W2 or Charitable Donations receipts should be kept for 7 years.

• Other documents like birth certificates, deeds, titles, loans, and mortgages need to be kept safe forever. 

Do invest in a safe shredder

Strip-cut shredders create 40-50 long, pasta-like strips per document which offer minimal security. Cross-cut, or for added security, micro-cut shredders create small, chip-like shreddings that are optimal for protecting sensitive information. Cross-cut shredders create 400 chips, while micro-cut shredders create 3,000 chips per document. While both cross-cut and micro-cut shredders offer increased security, micro-cut shredders offer maximum security, as the chips are the smallest.

Do shred documents with sensitive information

Anything with printed account numbers or personal information can pose a threat when being thrown away, especially without shredding. Notable documents to be sure to shred after you no longer need to keep them include: pre-approved credit cards and offers from financial service companies that you get in the mail, all receipts, statements, pay stubs, and deposit slips. When in doubt, shred it.

Do have a special place for hard copies of important documents

Keep important documents in a safe place like a fireproof file box or cabinet, safety deposit box, or other secure area. Don’t leave important documents out on a desk, for example, where you can accidentally spill coffee on it or absentmindedly throw them away.

Do make sure your cloud storage is secure

If you back up onto the cloud, make sure it is protected with passwords and firewalls to ward off hackers. This is especially important when backing up documents that include personal information and account numbers. Banks and other organizations are beginning to offer secure cloud storage abilities to their clients.


Don't

Do not get shred happy

It has happened to the best of us: that moment of panic when the stack of documents just finishes passing through the shredder. Sort your “To Be Shredded” pile carefully. There are certain documents that should be kept safe for a year (or until you file your taxes next) like pay stubs and medical receipts. Others, like legal documents and tax returns should never be shredded. Put the “Keep forever” documents in your fire-safe file box before you start shredding.

Do not throw away junk mail without checking it first

Some “junk mail” contains personal information, so before throwing it away ensure that it has none. Creating a habit of opening the mail near to your shredder is an excellent, time saving practice. When in doubt, shred it.

Do not rely on email or text messages to convey your secure information

Never share account information, passwords, or account numbers over email or text message, since neither is a secure method of communication. Call or stop by the bank, credit union or investment brokerage. With many customers moving over to online banking, your banker will appreciate your visit.


Summary
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Investing a little time every day in keeping your records straight will pay off in the long run by keeping your identity safe, and will make your next tax season a breeze.


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Keith Klein, CFP®, ChFC®, CLU®, CASL®Registered Financial Advisor

After more than 15 years as a financial service advisor, Keith Klein CFP®, ChFC®, CLU®, CASL® reached his own Turning Pointe and founded Turning Pointe Wealth Management. It had become clear that the best way for Keith to provide unbiased soluti...

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