Identity theft prevention starts with keeping your records safe. Don’t leave important documents out where anybody who comes into your home or office can find them easily. Documents are best kept in a locked cabinet. Computerized documents should be stored in a password-protected folder or on a secure website. Outdated records should be shredded.
Here’s a list of types of documents and suggested retention times:
*Tax returns and supporting documents should be kept for eight years.
*Records on contributions to individual retirement accounts should be kept permanently.
*Brokerage statements should be kept until you sell the securities. Sale and basis records should be kept with tax returns for eight years.
*Insurance policies should be kept for the life of the policy.
*Keep credit card receipts until you get the monthly statement, then shred receipts if the statements match. Statements should be kept for eight years if they include tax-related expenses.
*Paycheck stubs should be kept until you get your W-2 form.
*House records – such as purchase price and the cost of permanent improvements – should be kept permanently, or until seven years after you sell the house.