Insurance and Finance

To Shred or Not to Shred?

By James Mayfield 7.13.15

It’s a troubling statistic.

Each year, around 15 million U.S. residents have their identities fraudulently used, resulting in financial losses totaling upwards of $50 billion.

Fortunately, you can protect your sensitive information from getting into the wrong hands. Invest in a locked file cabinet to secure important documents that will eventually be discarded. And swap a basic strip-cut shredder for a crosscut one for enhanced security when the time comes to do so.

Here’s some guidance on what should be shredded into tiny pieces and what needs to stay intact.

Mail: While the mailbox can hold pleasant surprises from a variety of colorful catalogs, cards, and gifts, it also comes with sensitive personal information that is best shredded. Bank statements, financial investments, bills, unwanted credit card solicitations, and anything with your Social Security number on it should all be shredded before being thrown away.

Tax paperwork: In general, IRS recommends keeping income tax return records dating back three years. That being said, the government agency can go back six years in an assessment if it discovers an underreporting of 25 percent or more gross income. And if you haven’t filed a return in any given year, keep your tax return records indefinitely.

Safekeeping: Permanent records should never be shredded or discarded. These include birth and death certificates, trust documents, wills and estate-planning documents, military records, life insurance policies, powers of attorney, and marriage or divorce documents. Although a locked file cabinet is relatively secure, it isn’t indestructible. You can purchase a fireproof safe at a big-box retailer for keeping permanent records protected, yet easily accessible.

Toss It: There’s usually no need to shred junk mail that is marked “Current Resident” or “Occupant.” An identity thief can’t do damage without more sensitive information. But know that bar codes printed on junk mail can sometimes contain personal information. If there are no bar codes, just recycle and move on to the next stack of papers.

Once you’ve sorted through all your important documents, make sure the rest of your belongings are in order, too. For tips on how to tackle household clutter, including paperwork, see our blog Feel More Ordered, Less Like a Pack Rat. And to make sure your all your insurance policies on file are up-to-date and provide full coverage, contact your Texas Farm Bureau Insurance agent for a 360 Review®.