If you’re like me, you have a habit of holding onto old mortgage statements, tax records and other “important” papers forever. But is that really necessary? Which documents are actually important to keep — and for how long?
In this article, I’ll go over which documents you need to keep and for how long. We’ll also get some tips from money expert Clark Howard on how long to keep tax records.
Wondering How Long To Keep Documents? Read This
Table of Contents
Car Records
Keeping records related to your car has more to do with your individual ownership cycle than with any magic number of years to hold onto something.
When it comes to car loan payment stubs, you should keep them until the car is paid off. When it comes to car maintenance records, you should retain those documents in a safe place until you sell the vehicle.
Insurance Policies
According to State Farm, you should keep copies of all policies as long as they are active.
“Keep until you get your new policy,” the insurer says on its website. “For auto insurance, most states accept electronic versions of your insurance card, but it may also be smart to keep a printed version in your glove compartment.”
Mortgage Statements
When it comes to mortgage statements, it’s only necessary to keep them until a new statement comes out, according to Rocket Mortgage.
When it arrives, be sure your mortgage balance correctly reflects your most recent payment. Once you determine that it does, you’re free to toss out the old statement and just retain the new one.
By holding on to your statement for a month — and then remembering to check it for accuracy — you can avoid disputes over your balance. And there’s plenty of room for error when loans get sold or banks merge.
But there is one mortgage statement you want to keep forever: the one that reflects your mortgage balance is paid off in full. And you should receive a separate document indicating the payoff: Keep that one forever as well.
Rental Property Records
Clark says, as long as you own and collect rent on any property, you should keep all the related records.
“For rental properties, the documentation you have from the income you receive from that property — but more importantly the expenses — you keep for as long as you own the property because you never know how that’s going to play out,” Clark says.
Tax Returns
Clark says a good general rule is to keep a tax return and related documentation for at least six years. The reason: You want to make sure you can prove what you claimed in the case of an IRS audit.
“I keep full documentation for six years,” Clark says, “because I do have the complexities that we’re talking about — owning properties, owning a business — I’ve got a lot of footballs in the air, so the documentation is really key.”
Learn more on how long to keep tax records.
Keep It or Ditch It: How Long To Keep These Documents
| Document | Forever | At Least 4-6 Years | As Long As Active / Owned | At Least a Month |
|---|---|---|---|---|
| Apartment Leases | X | |||
| Bank Statements | X | |||
| Car Maintenance Records | X | |||
| Insurance Policies | X | |||
| Investment Records | X | |||
| Military Records | X | |||
| Mortgage Loan Payoff Information | X | |||
| Mortgage Statements | X | |||
| Passports and Citizenship Papers | X | |||
| Tax Returns and Documentation | X |
Final Thoughts
Physical copies of documents are great and, in some cases, necessary. That continues to evolve.
Clark says he keeps valuable paperwork in a home safe.
For documents you feel safe retaining in electronic form, you can store them in the cloud. Here are the best free cloud storage options.
More Resources From Clark.com:
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