Which Important Financial Documents Should You Back Up?

In the digital age, where technology has revolutionized the way we manage our lives, safeguarding our financial documents has never been more critical. From tax returns and bank statements to investment portfolios and insurance policies, your financial well-being relies on organized and secure documentation. 

Here, we share a comprehensive guide on what financial documents you should back up and why these backups are crucial for your financial future.

Personal Identification Documents

Passport and Driver's License

Copies of your passport and driver’s license are essential for various financial transactions, including opening bank accounts and applying for loans. In case these physical documents are lost or stolen, having digital copies can expedite the recovery process.

Social Security Card

Your Social Security card is a crucial piece of identification. A digital copy can help you quickly prove your identity in various situations, from job applications to financial transactions.

Income And Employment Documents

Tax Returns

Backing up your tax returns is essential for future reference, especially when applying for loans, mortgages, or financial accounts. Digital copies make it easy to retrieve specific information when needed. When it comes to taxes, it’s best to keep any tax records for at least seven years and tax returns for one year.1

Pay Stubs

Keep digital copies of your pay stubs to track your income, deductions, and contributions to retirement accounts. These documents also serve as proof of income for loans and rental applications.

Employment Contracts

Save copies of your employment contracts to reference terms, conditions, and benefits. This can be crucial for legal matters or negotiations if needed.

Banking And Financial Statements

Investment Statements

Maintain digital records of investment portfolios, including statements from brokerage accounts and retirement funds. These documents are vital for assessing your financial growth and planning for the future.

Loan Agreements

Save digital copies of loan agreements, including mortgages, car loans, and personal loans.2 This ensures easy access to terms, interest rates, and payment schedules.

Insurance Documents

Health Insurance

Back up health insurance policies, benefit summaries, and coverage details. This is crucial for medical emergencies and filing insurance claims.

Life Insurance

Save digital copies of life insurance policies, ensuring beneficiaries have easy access to the information in the event of the policyholder’s passing.

Property and Auto Insurance

Keep digital records of insurance policies for your home, car, or any other valuable assets. This aids in the swift processing of claims in case of accidents or disasters.

Wills and Trusts

Back up your will and any trust documents to ensure that your wishes are carried out. This is crucial for the distribution of assets and the well-being of your loved ones.

Power of Attorney

Save digital copies of documents granting power of attorney to a trusted individual. This ensures that someone you trust can manage your financial affairs in case of emergency.

Safeguarding your financial documents is not just a matter of convenience but a fundamental aspect of securing your financial future. By backing up personal identification documents, income and employment records, banking and financial statements, insurance policies, and estate planning documents, you are taking proactive steps to protect yourself and your loved ones in various life situations.

Reach out to us if you have any questions or want any tips for keeping your information safe!

- Ken Brown & Michelle Kessel-Harbart

1. https://www.nasdaq.com/articles/how-long-should-you-keep-your-bank-statements

2. https://www.consumerreports.org/money/taxes/how-long-to-keep-tax-documents-a5302825423/

This information has been drawn from sources believed to be reliable. Every effort has been made to assure the accuracy of the information, however, the accuracy of this information is not guaranteed. All investing is subject to risk, including possible loss of money you invest. Diversification does not ensure a profit or protect against a loss. The information provided in this commentary is for informational purposes only and is not a solicitation to buy and/or sell. Investors must consider the investment objectives, risks, charges and expenses of any investment carefully before investing. Avisen Wealth Management (Member FINRA/SIPC) does not provide tax or legal advice. Please consult your accountant &/or legal counsel for guidance. Avisen Wealth Management, CA Ins License #0E52062