Document Retention Guidelines: What to Keep and What to Shred

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So, your home office is overflowing with papers and files and you’re not sure what to keep and what to shred. Don’t worry, you’re not alone. Many people struggle with developing a practical document retention policy. But it’s important to get a handle on this to avoid drowning in paperwork or improperly shredding records you may need down the road. The good news is, that with these simple document retention guidelines, you can organize your files and confidently clear out the clutter while still keeping the necessary documents. This article provides recommendations on essential records to retain and others you can safely shred after a certain period of time. Follow these best practices and you’ll have a tidy filing system and minimize the risk of shredding a document you may need in the future. Time to roll up your sleeves and dig in!

Understanding Document Retention Laws: What You Need to Keep

Understanding what documents you need to keep and what you can shred is important for legal and practical reasons.

Financial Records

Keep financial records like tax returns, bank statements, investment records, and property records indefinitely. These establish your financial history and may be needed for taxes or legal purposes down the road.

Shred outdated bills, pay stubs, credit card statements, and other records after reconciling them with your bank statements. As a rule of thumb, if the record documents a tax deduction or capital gain/loss, keep it. If not, shred after 7 years.

Insurance Papers

Hold onto insurance policies, claims records, and statements permanently. Keep records of payments, correspondence, and medical bills related to insurance claims for at least 7 years.

Shred correspondence and statements unrelated to claims after a year. No need to keep those auto insurance ads or life insurance solicitations.

Contracts and Legal Documents

Keep contracts, wills, deeds, titles, licenses, settlements, and judgments permanently in a fireproof safe or cabinet. These establish your legal rights and ownership.

Shred non-essential legal correspondence and expired contracts after 7 years. But when in doubt, keep it.

Following document retention guidelines protects you legally while decluttering your files. Keep what’s necessary and shred what’s not for peace of mind and a clean office. Tackling this task now saves hassle down the road.

Creating Document Retention Guidelines: Categories and Timelines

To keep your documents organized and ensure compliance, you need to create a straightforward document retention policy. This means deciding what to keep, what to shred, and for how long.

Essential Categories

First, determine the main categories, like:

  • Financial: Invoices, receipts, statements – Keep for 7 years.
  • Legal: Contracts, waivers, licenses – Keep permanently.
  • Insurance: Claims, policies, records – Keep for the life of policy + 5-10 years.
  • Employee: NDAs, offer letters, reviews – Keep for the duration of employment + 5-10 years.

Set timelines for each category based on legal requirements and your needs. For most, 3-7 years is typical, but some need longer.

Digital vs Physical

Now consider format. Some documents like legal and insurance should be kept in physical and digital form. For others, like financial or employee, digital is usually sufficient. Make sure digital documents are securely backed up in case anything happens to your physical copies.

Review and Purge

Review your policy at least annually to purge outdated documents. Shred physical copies and securely delete digital files. Keeping a lean set of current documents makes it easier to find what you need while reducing the risk of a data breach.

Creating a comprehensive yet straightforward document retention policy may seem tedious, but it gives you peace of mind that your essential documents are protected and compliance risks are minimized. Following some simple guidelines and purging regularly will make the process second nature in no time.

Securely Destroying Documents: Best Practices for Shredding

When it comes time to dispose of sensitive documents, securely shredding them is critical. Carelessly throwing papers in the trash can put your identity and accounts at risk. Follow these best practices for shredding important documents.

Use a cross-cut shredder

Invest in a shredder that cuts papers into small confetti-like pieces. Strips or slices can potentially be reassembled by thieves who are determined to steal your information. Cross-cut shredding thoroughly destroys documents, ensuring that sensitive data is no longer readable or recoverable.

Shred immediately

Don’t leave papers containing account numbers, passwords, or other private details sitting out. Shred them promptly when no longer needed. The sooner they are destroyed, the less opportunity for them to fall into the wrong hands.

Check your shredder’s security level

Higher security levels, like Level 4 or Level 6, produce smaller shred sizes that are more difficult to piece back together. For most households, a Level 4 or 6 shredder will sufficiently shred all sensitive mail and documents. Level 2 or 3 may be okay for general shredding but not for highly confidential information.

Shred non-sensitive papers too

To avoid signaling to thieves which bags or bins contain sensitive information, shred all your discarded paper waste – not just the confidential documents. Mixing everything together in the shredder and waste bags helps provide an additional layer of protection for your important documents.

Empty and wipe the shredder regularly

Empty your shredder bin frequently and wipe down the cutting blades to remove any small paper scraps left behind. These leftover pieces could contain fragments of sensitive data if not properly disposed of. For maximum security, consider shredding and then incinerating particularly high-risk documents.

Following secure shredding best practices helps put sensitive information permanently out of reach and provides peace of mind that your accounts and identity are protected. Make shredding a regular habit and an important part of your document security routine.


Well, there you have it – a helpful overview of the essential documents you need to hang onto and those you can confidently shred and recycle. By following these document retention guidelines, you’ll avoid drowning in a sea of unnecessary paperwork and ensure you have everything required in the event of an audit. Now take a deep breath and start sorting – you’ve got this! Tackle one drawer, one box, or one file at a time. Before you know it, you’ll be left with only the critical records needed to protect yourself legally and financially. You can then sit back and relax, content in the knowledge your important documents are organized, accessible, and safe from prying eyes. Freedom from clutter awaits! Happy shredding!

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Document Retention Guidelines: What to Keep and What to Shred

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