Which 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, our 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.

We are a Fee-Only Fiduciary financial planning and investment advisory firm that individuals and small businesses in the Akron/Cleveland area and throughout the United States trust with their financial future. Our team will work with you to create a personalized financial blueprint. To begin your journey towards a successful and stress-free financial future, please give us a call at 330-836-7000 to schedule an introductory conversation. Alternatively, you may also schedule an introductory conversation with us here. 

Since 2004, TCM Wealth Advisors has been providing Fee-Only Fiduciary Advice to our clients in Northeast Ohio (Akron/Canton, Cleveland), and around the country.