Spring Cleaning
BY CINDY YOUNGCOURT
Saying this is an unusual Spring is an extreme understatement. In years past, I enjoyed the first warm days, the flowers blooming, and experiencing growth and a rebirth. Windows were opened and closets were cleaned out. I would purge and donate and go through my children's clothing lovingly as I decided would they even fit in that coat next winter or does that go into the donation bin. Those days were bittersweet but left me feeling renewed and reenergized. This year, the purging started earlier. I am working from home and juggling my children's schoolwork, like many of you, but still found myself with extra time on my hands. I decided this was the year to really clean out everything-my files, my finances, EVERYTHING. Here are some tips to get your financial house in order.
Start migration from paper records to electronic records. Keep in mind, some paper documents should be kept. Shredding outdated documents can save you and your heirs a lot of time, especially during difficult and stressful times. I have helped children of clients who have passed away and they have brought in stacks of life insurance policies, estate documents and statements and had no idea what was the most current or even if a policy was active.
Shred all taxes returns filed more than 7 years ago. All others can be scanned and saved. Once you have backed up the files, you can shred those tax returns as well.
Pay-stubs- Keep scanned copies for 1 year.
Social Security Statement- Keep scanned copies for 1 year. (shred any old statements)
Pension Statements- Keep scanned copies for 1 year. (shred any old statements)
Estate Documents- Keep a copy at home and/or in a safety deposit box. Let your loved ones know where they are. Have your estate attorney and your financial advisor (if you have one) keep a copy as well. Shred any outdated estate documents. When in doubt, consult with your estate attorney or financial advisor. Also, you should make sure the right person(s) have copies of your power of attorney, healthcare power of attorney and living wills as these made need to be accessed quickly in emergencies.
Insurance and Annuity Documents-Keep as long as they are in force/active. I recommend scanning them as well; in particular life insurance policies, insurance declaration pages, long term care policies, disability policies and annuity contracts. When the policies are no longer active, shred them and/or delete the files. At the very least, write “inactive” in big, bold letters on the documents.
Vehicle titles, House Deeds, Mortgage Documents-Keep as long as you own the property. I recommend scanning and keeping paper.
Bank Statements-Keep the current year and then shred. (either paper or electronic)
Brokerage and Retirement Account Statements-Keep the most current and last 3 years year-end statements (either paper or electronic)
Loan documents-Keep until the loan is paid off.
Home improvement records-Keep for at least three years after you sell your house (either paper or electronic)
Vehicle repair and maintenance records-Keep until you no longer own the vehicle (either paper or electronic)
Receipts for valuable items, such as jewelry, electronics, and art-Keep scanned copies unless originals are required by your insurance carrier.
Warranties and related receipts-Keep until they expire or you no longer own the items (either paper or electronic)
Records such as birth and death certificates, marriage licenses, divorce decrees, Social Security cards, and military discharge papers should be kept indefinitely. Some people prefer to keep these in a safety deposit box. I also keep a scanned copy of these documents.
Make a point to review the paper and scanned files annually. Set yourself a reminder. If you do not have a financial advisor, consider having a meeting with an advisory team at Affinity Wealth Management. We help our clients well beyond investments and financial planning. We can help you organize your important documents and make things simpler and easier for you and your heirs, as well as be the quarterback of all the important pieces that make up your financial picture.