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WTOP saves you: How to handle your important records

Thursday - 2/17/2011, 8:13am  ET

Evan Haning,

WASHINGTON -- If the IRS asks to see your records, don't hand them a shoebox.

To be well-organized, you don't need to be a neat freak, but some hardware is indispensable.

Inexpensive plastic and cardboard filing cases are available at dozens of places, including the Container Store, Staples and K-Mart, which may be sufficient for you on the "anything is better than nothing" principle.

But Good Housekeeping magazine recommends having a lockable file cabinet, long-term storage and an emergency kit.

Metal filing cabinets that lock do more than keep you organized. They protect your records from nosy acquaintances. An estimated 40 percent of identification thieves know their victims.

For records hardest to replace, a fireproof box is best. Social Security cards, marriage, birth and death certificates, wills and car ownership documents go here.

You also may want to keep a digital back-up of your online records in this sturdy safe, which is your emergency kit.

Many fire and flood victims wish they had prepared an emergency kit. (Remember survivors' horror stories in the aftermath of Hurricane Katrina?)

Phone numbers, medical information including copies of prescriptions and insurance papers that can be quickly removed go here.

As well as having a place to keep your records, the best-organized know which records to keep.

Bank and credit card statements should be destroyed as soon as you have checked them for accuracy. So Good Housekeeping recommends one more piece of hardware: a shredder.

Monthly paper statements are a top source for identity thieves, and their online availability renders them expendable.

Hang on to your tax documents (tax returns, receipts, real estate closing statements) for seven years.

You may want to keep your W-2 statements until you go on Social Security, since they are the best proof of your entitlements.

Investment records should be available as long as you own the investment. They are also your proof of capital gains and losses.

Retirement plan statements should be kept for one year.

You also need to keep paychecks and bills for one year, for tax purposes or until you receive your W-2 from your employer.

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