Here’s how long to keep important documents before shredding them

America’s greatest generation usually saves personal documents in small file cabinets with letter-sized manila file folders. Those in that generation often, for example, use individual folders for IRS tax returns, credit card statements, bills and bank statements.

Millennials, on the other hand, often run their financial life with an iPhone and the cloud. Many millennials don’t reconcile or inspect monthly bank statements, instead using online banking and accepting the bank’s calculations.

Indeed, technology and economics define generations. With that in mind, here’s a primer for all age groups on what digital and paper documents to save and what documents to trash:

Tax returns

Honest taxpayers, for IRS audit purposes, should keep tax returns for at least seven years. Aggressive taxpayers should hold on to their tax returns indefinitely.

It’s usually prudent to keep supporting tax documents for at least seven years after filing a return. Remember to save documents that verify your tax returns, such as W2s, 1099s, brokerage statements and charitable donations.

Investments

Keep monthly brokerage statements for a year, then keep the annual summary statement. Once you validate the annual statement, shred the monthly statements. Save all letters about portfolio changes until receiving the next brokerage statement. Retain information that justifies the cost of an investment for tax purposes as long as you own the investment.

There’s one more thing to consider: Malicious hacking of government or financial industry computers and cyber-warfare could affect investments held at your brokerage firm.

In financial Armageddon, a brokerage firm might not be able to validate an account without help. The burden of proof might be on you to prove ownership and reconstruct the investment account. For example, a crippled brokerage firm might not be able to tell if you own one or 15,000 shares of Apple.

You’ll be glad brokerage statements and other documents were saved to assist the firm in rebuilding and validating an account. If you have world fears, keep relevant brokerage statements and documents for seven to 10 years.

Bank statements

Keep ATM and deposit statements until they’re accurately shown online or on paper bank statements. Retain digital or paper bank statements for one year. Keep bank statements for three years or longer to support business expenses, though. Save statements for three years or longer to qualify for Medicaid or a mortgage. Shred bank withdrawals and deposit slips once verified with monthly bank statements. And retain all loan documents until paid off.

Store permanently

Hold on to marriage and death certificates, wills and trusts, and power of attorney forms. And hold on to safe deposit inventories and military discharge papers. Also save social security cards, pension plan documents and life insurance policies. Protect these documents – preferably in a fireproof box – indefinitely.

Medical and dental bills

If not claiming medical expenses on a tax return, most can shred medical bills after one year if health issues and medical payments are OK.

Credit card statements

Keep monthly credit card statements for the past year. Save bills to prove a specific item for business or tax purposes, though.

Utility bills

Shred utility bills after payment. Save bills longer for tax purposes if you’re self-employed.

Home documents

Save paperwork supporting appliance, furniture and automobile purchases. Hold on to leases, home deed and purchase documents, mortgage documents and active insurance policies. Retain home purchase and home improvement documents while you own the home, and for 10 years after selling a home. Save property tax records for about two years.

This story was originally published September 25, 2017 at 11:48 AM with the headline "Here’s how long to keep important documents before shredding them."