Financial PlanningOrganizing Your Financial Records

From MFS

Many people struggle every time they open their mail or email. They ask themselves, “Is this important? Do I need this? Should I throw it away?”

Somewhere between the paper squirrel, who saves everything “just in case,” and the purger, who tosses everything in the trash, is the organized person for whom keeping records is no big deal. Becoming that organized person is not simple, but taking the steps necessary to get your financial records under control is a task with many rewards — first and foremost, a good night’s sleep.

 

Keys to success

 

Having an organized approach to financial records can remove much of the stress associated with living in an increasingly complicated world. As children, parents, spouses, partners, investors, citizens and employees, we all play many roles, each with a trail of paper attached. This information sheet will help you organize your records by touching on these key topics:

■ What records should you keep?
■ How long should you keep them?

■ How should you keep them organized?
■ How can you make sure that someone
has access to your records in case of
an emergency?

 

What to keep

 

Knowing what records to keep can be as simple as knowing why you need them. There are many reasons to keep financial records. In addition to keeping track of papers associated with day-to-day consumer
activities such as making purchases and paying down debt, you probably have papers and documents that will be needed only in the event of an emergency, a death in the family or an unforeseen turn of events. That is why many experts suggest you separate your papers by your need to use them, keeping short-term items together and long-term items together.

KEY POINTS

■ Recordkeeping should be simple. Whether you use file cabinets, boxes or bins,
create a system that you can follow.
■ When you save a piece of paper or an email, be sure you know why you need to keep it.
This will help you determine how long to keep it.
■ Very few of your financial records should be kept “forever” (see list on page 3).

All other items should be purged at least once per year. MFS ADVISOR EDGESM Organizing Your Financial Records MFS HERITAGE PLANNING® > FINANCIAL BASICS This material should be used as helpful hints only. Each person’s situation is different. You should consult your investment professional or other relevant professional before making any decisions.

Short-term files would include items from the past year, such as:
■■ unpaid bills
■■ paid bills
■■ bank statements
■■ canceled checks
■■ credit card statements
■■ health records
■■ an updated resume or updated employment records
■■ income tax receipts for deductions, income, etc.
■■ major purchase receipts
■■ insurance policies

Your long-term files should include items such as
■■ bank statements (past seven years)
■■ credit card statements (with home improvement expenses)
■■ canceled checks (past seven years)
■■ receipts for home improvements
■■ warranties and operating instructions for appliances
■■ income tax records and backup for previous three years
■■ gift tax returns
■■ inheritance papers
■■ retirement investment statements
■■ legal papers about formerly owned properties
■■ reports from trusts
■■ birth certificates
■■ Social Security cards
■■ burial vault/plot deeds
■■ wills/living wills
■■ powers of attorney*
■■ car titles
■■ house titles/deeds
■■ investment account statements (If year-end statements
have all tax information, these are typically the only ones
you need to keep.)

■■ pension plan statements
■■ annuities statements
■■ mutual funds statements
■■ stocks and bonds

* Originals of sensitive financial documents such as these should be kept with an attorney, if possible.

 

What about taxes?

 

There are basically two types of tax information you need to be concerned about: information you need in case of an audit and information you need to support your claims of income.
Backup for your returns While false or fraudulent returns can be pursued forever, the IRS can audit you for up to three years from the date you file your return and can pursue underreported income for up to six years.
Keeping tax returns and supporting documents for seven years (because the IRS has six years from when you file to investigate) is a reasonable approach to keeping tax documentation.
Exception Because many of your important files will double as backup for taxes, if your tax returns contain information about home purchase or sale information, you should keep those records indefinitely.

 

A rule for keeping your documents:
three, seven, or forever

 

Presuming that you clean out your immediate and long-term files annually, here are some general guidelines for how long you should keep your documents. Your short- and long-term files should be cleaned out at least once per year, with your short-term files either destroyed or placed in a long-term file. Be sure to shred any sensitive documents, especially those with account, Social Security and date-of-birth information.

Keep three years
■■ household bills
■■ credit card statements
■■ receipts for minor purchases

Keep seven years
■■ canceled checks
■■ check registers
■■ bank statements

■■ pay stubs (If you worked for the same employer all year,
your year-end stub should have all your information.)
■■ tax returns and supporting documentation

Keep forever (or until assets are sold)
■■ receipts for home improvements
■■ receipts for major purchases
■■ annual investment statements
■■ gift tax returns
■■ inheritance papers
■■ insurance policies
■■ IRA statements
■■ mutual funds statements
■■ a copy of your will
■■ health care proxy forms

 

Where to keep everything?

 

Whether it is a file cabinet, boxes or a shopping bag that holds
your records, it is helpful to separate them by using file folders
or tabs so it is easier to locate what you are looking for. While
only you can decide the filing system that works best for you,
remember to:
■■ keep it simple — use generic and commonplace terms
■■ clean out your files once a year
■■ keep the most recent files accessible
■■ keep all files in one place

If you use the short-term/long-term system for your files, you may want to keep a “to be filed” area and jot the word “short” or “long” on each piece of paper. Again, during your annual cleanup, certain short-term files will become long-term files and others will be disposed of.

 

Safe deposit box

 

A safe deposit box can be a secure place to keep certain valuables and important papers, but some important items may not need to be placed in a safe deposit box.

Put in a safe deposit box:
■■ stock certificates
■■ coins, stamps and other collectibles
■■ auto titles, mortgages and deeds
■■ original copies of birth, marriage and death certificates
■■ adoption papers
■■ divorce and child custody papers
■■ videos or photos of contents of your home for insurance

Don’t put in a safe deposit box
■■ original copies of wills*
■■ powers of attorney*
■■ insurance policies
■■ anything that may be needed in the event of death

A word of caution In the event of a death, safe deposit boxes may be sealed (inaccessible even to those with a key). Therefore, it is not recommended that you keep originals of those documents needed in the event of death (see list above) in a safe deposit box. It may be wise to keep these original documents in an alternate secure place, while keeping only copies in the safe deposit box.

 

Providing a key — a letter of instruction

 

Chances are a relative, a neighbor or a landlord already has a key that would let that person into your home should a serious event — fire, water main break, blackout, electrical emergency — occur. Leaving a key with someone makes good sense. Likewise, you should create a “key” to your important financial records and make sure someone you trust has possession of it.

* Originals of sensitive financial documents such as these should be kept with an attorney, if possible.

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Client Services Associate

As director of First Impressions, I strive to make sure our clients have a comfortable and meaningful experience while providing remarkable customer service at the highest standards. I enjoy going to local Everett events and festivities while spending time with friends and family. I love to read, especially dystopian novels.  I am involved in volunteering opportunities within the community including grocery shopping for homebound people, coffee trailer and first responder appreciation.

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Training

Holly Studied Business and Management at Sno-Isle Business and Management & Everett Community College. She has over 20 years of customer service and administrative experience.

Specialisms

Holly’s focus is to create meaningful connections between our clients and our office. She schedules appointments, answers calls, processes transactions, preparing paperwork to maintain accounts as well as opening new accounts, and transfers.

Albert Ballesteros

With over 25 years of customer service working in the Financial Industry and the State of Washington, Albert is a welcome addition to the service team. He helps with opening new accounts and servicing current accounts. You have probably received appointment reminders from him. He also works with the marketing team in planning monthly letters to clients, planning special events and creating the weekly newsletters.
In his spare time, he volunteers at Northshore Christian Church, having completed two mission trips to the Philippines and has a passion for singing. He enjoys playing and watching most sports but is especially an avid fan of the Everett Silvertips.

Education and Biography

TRAINING

Albert attended Honolulu Community College where he obtained his AA in Liberal Arts.

SPECIALISMS

Albert joined Bailey Wealth Services in 2022. His focus is to provide support to both prospective and existing customers with exceptional customer service. He is very personable and brings professionalism to his role.

Wes Burroughs

One of the things I enjoy most about what I do is educating clients on what is available to them as an investor. Our clients know where they’re at financially and where they are going because we make breaking down the complexities of a constantly changing world a top priority. Outside of work, I love spending time with my wife, Blyn, and playing with our daughter, Sophia. I also enjoy running and hosting game night with friends.

Education and Biography

TRAINING
Wes attended Liberty University where he obtained his BA in Philosophy.

SPECIALISMS
Wes joined Bailey Wealth Services in 2021. His focus is helping families maintain and grow the wealth they already have. Wes enjoys working with our valued clients to facilitate financial relationships by providing solutions, solving problems, and helping them manage their financial lives.

A. Sean Bailey, CFP®

My mission is to assist families as they strive to acquire, accumulate and retain wealth in a tax efficient manner so they may live in retirement with confidence and dignity. When I’m not engaged in professional activities, you can find me on a mountain top with my wife, Kim, and our two children, Eleanor and Oscar.

Education and Biography

TRAINING
Sean received his Bachelor’s Degree in Business Administration, Finance Concentration, from the University of Washington.

SPECIALISMS
Sean Bailey has been in the financial services industry for 30 years. He specializes in developing comprehensive financial, estate and retirement planning strategies for clients nearing and in retirement. Sean is a Registered Principal and Investment Advisor with LPL Financial. He is a CERTIFIED FINANCIAL PLANNER™ Practitioner. Sean is also a member of the Financial Planning Association and Ed Slott’s Elite IRA Advisor Group.

Ed Slott’s Elite IRA Advisor Group is not affiliated with Bailey Wealth Services or LPL Financial.

Sonya Jones

I endeavor to provide excellent service to our clients and organizing processes and procedures to ensure our office runs smoothly. When not working, I enjoy spending time with my fiancé, Erik, and our two boys, Lukas and Archer along with our dog Pixie. I love cooking for them and experimenting with different recipes and techniques, including treats for Pixie. Our favorite family activity is taking road trips, especially to California to visit family and friends.

Education and Biography

TRAINING

 

Sonya received her BA in Art at California State University, Chico and has over 25 years of administrative and customer service experience in the financial services and accounting industries.

 

SPECIALISMS

 

Sonya’s focus is to help clients reach their financial goals by assisting them with their various transactions and paperwork to service and maintain their accounts. This includes opening new accounts and initiating transfers from and to financial institutions. Sonya is constantly looking for new ways to improve our processes to ensure we work efficiently and in a manner that creatives positive experiences for our clients.

Sonya Jones

I endeavor to provide excellent service to our clients and organizing processes and procedures to ensure our office runs smoothly. When not working, I enjoy spending time with my fiancé, Erik, and our two boys, Lukas and Archer along with our dog Pixie. I love cooking for them and experimenting with different recipes and techniques, including treats for Pixie. Our favorite family activity is taking road trips, especially to California to visit family and friends.

Education and Biography

TRAINING
Sonya received her BA in Art at California State University, Chico and has over 25 years of administrative and customer service experience in the financial services and accounting industries.

SPECIALISMS
Sonya’s focus is to help clients reach their financial goals by assisting them with their various transactions and paperwork to service and maintain their accounts. This includes opening new accounts and initiating transfers from and to financial institutions. Sonya is constantly looking for new ways to improve our processes to ensure we work efficiently and in a manner that creatives positive experiences for our clients.