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What should you get rid of and hold on to? When and why?

If you are anything like me, you hate to throw old financial paperwork out. I have those voluminous escrow files for homes I sold 30 years ago and more. You can’t just toss these files out with the trash.

What can we do?

If a shred party happens to spring up in your area, you may want to mark your calendar.

For many years, shred parties, where a business or organization hosts clients or the public to the use of giant paper shredders, have presented a fun and easy way for folks to rid themselves of paper clutter.

Sometimes, it’s more than just paper, as some industrial-sized shredders even have the ability to destroy hard drives and other electronic storage devices.

There also is protection from identity theft.

Of course, this is not just about clutter: old bills and financial documents are just the sorts of things that scammers and identity thieves want to get their hands on.

The only way to be totally certain that you are safe is the total destruction of those documents and devices once their practical use has come to an end.

A shred party can also be a nice day out.

It’s not unusual for the big shredding trucks to be parked outside on a pleasant spring or summer day.

Depending on the hosting organization, the shred party might be attached to some other activity, like a potluck,

barbecue, or community celebration.

What do you bring?

The better question may be: when is it wise to let go of the documents that you’ve been storing?

It’s important to be sure because they certainly aren’t something you can get back from the shredder once they’re

gone!

A recent article from CBS News suggests the following guidelines:

  • For your tax returns, hold on to those for up to seven years.
  • Purchase and sale statements for your house, for your entire ownership of the house.
  • Utility bills, at least one year.
  • Statements from your investment or brokerage account, at least one year. Be sure to retain documents that record the “cost basis” for figuring taxable gains or losses.
  • Purchase and sales confirmations related to your investment or brokerage account, at least one year.
  • Statements from your bank account, at least one year.
  • Statements from your credit card provider, at least one year.

It’s important to remember, also, that the above represents a general guideline; different sources offer different suggestions.

CBS acknowledges that, in some cases, it’s OK to shred your tax returns after three years. Your financial professional may have a different prescription for you, however, based on their close understanding of your financial life.

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Tom and John Mills are registered investment advisers and certified financial planners. Reach them at 254-0155. MillsWealth.com. Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Strategic Wealth Advisors Group (SWAG), a registered investment adviser.

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