What should you get rid of and what should you hold on to? When and why? 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 use 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.
Protection from identity theft. Of course, this is not just about clutter. Old bills and financial documents are what scammers and identity thieves want to get their hands on. The only way to be 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 also can 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. COVID-19 may limit part of the celebration this year, but the opportunity to shred documents still may present itself.
What do you bring? The better question might be, when is it wise to let go of the documents that you’ve been storing? It’s important to be sure, because you can’t get them back from the shredder once they’re gone!
A recent article from the IRS suggests the following guidelines:1
Hold on to tax returns for up to seven years.
Purchase and sale statements for your house should be kept for your entire ownership of the house.
Utility bills, keep at least one year.
Statements from your investment or brokerage account, at least one year.
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 that the above represents a general guideline; different sources offer different suggestions. The IRS 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 his or her close understanding of your financial life.
Securities offered through registered representatives of Cambridge Investment Research Inc., a broker-dealer, member FINRA/SIPC. Advisory services through Cambridge Investment Research Advisors Inc., a registered investment adviser. Cambridge is not affiliated with and does not endorse the opinions or services of Peter Montoya Inc. or MarketingPro Inc.
By Don Akridge, MBA, CFP, CPA/PFS
U.S. Marine Corps veteran, Emory University alumnus
This material was prepared by MarketingPro Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice, and may not be relied on for the purpose of avoiding any federal tax penalty. This is neither a solicitation nor a recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
1 – IRS.gov, Sept. 29, 2020