When records can go

You accumulate many financial papers over time, so it's important to know how long to keep them. Use this guide to know when to let go:

• Keep records that document major events such as birth, marriage, divorce, death, military service, adoption, and naturalization permanently.

• Keep all tax records for at least six years. The IRS has three years from the time of filing to assess additional taxes. But, if you substantially underreported income or filed a fraudulent return, that time can be extended. Many advisors recommend keeping tax records indefinitely.

• Hang onto papers documenting home purchase and improvements for as long as you own the property or are rolling over the profits into a new property. Housing and investment records such as titles, deeds, trust agreements, wills, retirement plan agreements, and power of attorney documents should be kept as long as the agreements are in effect. Investment purchase and sale records should be kept for six years after the tax deadline for the year of sale.

• Records of consumer purchases, such as receipts and warranties, should be kept as long as you own the item or until the warranty expires. Keep your year-end brokerage and mutual fund statements until you sell your investment and report a gain or loss on your taxes.