Protecting Your Critical Documents

If you've ever suffered the loss of a home by fire, you know that more than just the building is destroyed. While your home insurance will help you rebuild your home and replace many of your belongings, a little planning can go a long way in preserving hard-to-replace personal documents and records. Follow our simple suggestions for protecting your critical documents.

How can I protect my critical documents from loss by fire or other disaster?
Keep all of your difficult-to-replace documents in a safe deposit box at a nearby bank. Most banks offer this service, but prices may vary from bank to bank. You'll probably want to select one that is economical, but conveniently located in case you need to access any of your documents.

Which documents should I be concerned about?
Documents that you may want to consider preserving in a safe deposit box include: birth certificates, marriage licenses, divorce decrees, military service records, citizenship papers, adoption records, passports, social security records, stock certificates, deeds, property titles, mortgages, wills, insurance documents, etc.

What if I need information from one of these documents?
It may not always be convenient to run to the bank to get information from one of your documents. Instead, keep copies of any documents that you may need to refer to in a safe place at home for convenience and added protection. Paper copies can be kept safe in a home fire safe with a UL class 350 fire resistance rating, or, you may consider scanning documents onto your computer and saving them on a disk or cd.

How long should I save these documents?
How long you keep critical documents depends on the nature of each specific document. The following examples can help you determine how long to retain individual items.

Utility, credit card, and other bills can be discarded as soon as you have reviewed them and verified that they are correct.

Car titles and other property documents can be discarded as soon as you've disposed of the car or other piece of property.

Because the IRA has six years to audit your returns, federal and state income tax returns and related documentation should be stored for at least six years. This includes canceled checks and receipts that support income tax deductions.

Keep your pay stubs until your get your W-2, and hold on to canceled checks for as long as you might need them as proof of payments made.

You should save all buy/sell trade confirmations for your mutual fund or other investments because they contain information needed for completing your tax return. But if your mutual fund company or brokerage house sends you year-end summary reports, there's no need to keep monthly or quarterly statements once you've checked that the year-end report is accurate.

Records relating to your retirement plans or individual retirement accounts should be kept indefinitely.  

What if something happens to me?
Keep a list of all your important documents and where they are being stored. Give a copy of your list to a trusted friend or relative so your documents can be located in case of emergency. Don't wait till it's too late to prepare for disaster

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