"He tried everything," says O'Planick, "but in the end he paid an extra $5,000, and the ordeal took up a lot of his time."
Bills, Receipts and Statements
Because bank and credit-card statements are generally available online, you may decide to shred them on a month-to-month basis, provided they don't have tax implications. Still, some providers charge for copies of statements older than a few months, so you might consider waiting a year to shred them, if only in case of potential disputes or warranty claims.
You can shred non-tax-related bills and credit card receipts as soon as you receive a cancelled check or statement. However, it's a good idea to keep receipts for big-ticket items, such as cars, jewelry, collectibles, appliances, rugs, furniture and so on, to prove their value in the event of an insurance claim.
You don't need to save every monthly 401(k) or pension statement, but you should save your annual statements, at least until you retire or close the account--again, in case there is a dispute.
Shred annual homeowner's, renter's and auto insurance policies once they're renewed or expired. But keep your life insurance policy and an updated inventory of all the policies you hold -- complete with policy numbers and phone contacts for emergencies -- in a secure location, along with the other key documents that fall into the following category.
Bare Necessities
There are certain items you should keep forever. It may be a hassle to organize them, but the effort it will take now is nothing compared to the trouble you'll be in if you have to scramble for this information after a death or other crisis.
