Streamline your finances. Consider combining retirement accounts at one financial services company -- you may pay lower fees.
(Money Magazine)
After all, there's a good chance you're so overrun with statements from multiple investment and bank accounts that you find it tough to keep track of what you've got.
In one poll, nearly 25% of respondents admitted they had lost or forgotten about a key financial document; only 40% thought they could find needed paperwork at a moment's notice. These steps will help you get your financial house decluttered, once and for all.
Purge, merge and back up
A good filing system is crucial. To establish one...
Pare down. Use the table below to determine which papers to file and which to toss. Ultimately, you'll save only docs that are necessary for tax purposes or for tracking your finances over the long term.
Create a taxonomy. Most families maintain a combination of paper and digital records. Identify a central filing drawer for the former, and make space on your hard drive for the latter. Then name folders with broad categories and tax year, like PAYSTUBS 2013, says Darla DeMorrow, a professional organizer in Wayne, Pa.
Sort by date. Dump paper statements into paper folders as they arrive, newest on top. DeMorrow advises renaming digital files, "starting with the year, then the two-digit month, then the name of the institution."
Have a Plan B. To avoid hassle in the event of a PC meltdown, back up electronic files with a service like Carbonite ($59 a year). Or use Dropbox (free for the first two gigabytes), a program that syncs docs across your devices while also storing them in the cloud.
Sweep up your accounts
About half of Americans have at least one retirement account from an old employer, according to an ING Direct survey, and many have multiple taxable accounts as well.
Related: Ways to bank (and save) smarter
Consolidate them at a single financial services company; that will make it easier to keep track of your assets and may result in lower fees.
"You will be amazed at how much more in control you will feel," says Peter Canniff, a financial planner in Nashua, N.H. Another option: Download Wikinvest Portfolio Manager, a free app that pulls together your investment account information so that you can easily follow your performance.
Freshen your settings
Use this time also to tidy up your tax withholding. Last year, 75% of taxpayers got a refund from Uncle Sam (average amount: $2,803).
Related: Help with taxing problems
If you were among them -- or, if you were in the other camp and owed a lot -- use the withholding calculator at irs.gov to determine how much to have deducted from your checks, advises Jude Coard, a tax partner with Berdon in New York City.
While in updating mode, review beneficiary designations on your retirement accounts and life insurance policies. Doing so regularly has an ancillary benefit, says Canniff: "It makes it easier to keep your finger on where everything is."
What to keep, what to toss
Whether you have digital or paper records or a combination, rid yourself of clutter by shredding or deleting all but the following key financial documents.
| Keep for one year | Paycheck stubs until you get your W-2 in January to check its accuracy |
| Bank statements to confirm your 1099s | |
| Brokerage statements until you get your annual summary (keep longer for tax purposes if they show a gain or loss) | |
| Receipts for health care bills in case you qualify for a medical deduction | |
| Utility bills to track usage (seven years if you deduct a home office) | |
| Keep for 7 years | Supporting documents for taxes, including W-2s, 1099s, and receipts or canceled checks that substantiate deductions. The IRS has up to three years after you file to audit you but may look back up to six years if it suspects you substantially underreported income or committed fraud. Keep documentation for 2012 until 2019. |
| Keep indefinitely | Tax returns with proof of filing and payment |
| IRS forms that you filed when making contributions to a traditional IRA or Roth conversion | |
| Receipts for capital improvements that you've made to your home until seven years after you sell the house | |
| Retirement and brokerage account annual statements | |
| Receipts for big-ticket purchases for as long as you own the item, to support warranty and insurance claims | |
| Toss | ATM receipts once recorded |
Bank deposit slips once the funds show up in your account | |
| Credit card receipts after you get your statement, unless you might return the item or need proof of purchase for a warranty | |
| Credit card statements that do not have a tax-related expense on them |
First Published: April 19, 2013: 8:37 AM ET
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