How Long Do You Have To Keep Your Statements? A year? Seven years? It depends.   Provided by Frederick Saide, Ph.D.    “You should retain copies of your federal tax returns for 7 years.” Is that true, or a myth? How long should you keep those quarterly and annual statements you get about your investment accounts? And how long should you keep bank statements before throwing them away?   Your age, wealth & health might shape your answer. If you are not yet retired, then you may wish to follow the general “rules of thumb” presented across the rest of this article.   On the other hand, if you are retired and there is any chance that you might need to apply for Medicaid, then you should keep at least five years of all financial records on hand (including credit card statements).   Why? Medicaid has a five-year “lookback” period in many states. To be approved for benefits in those states, you have to prove that you didn’t give away funds during that five-year period. To prove this, you must produce complete records from every bank and brokerage account to which you have access, including those held jointly.1   Another special circumstance: if someone you love ends up under court supervision via guardianship or conservatorship, all financial records must be kept from the date of that guardian’s or conservator’s appointment until the court gives final approval to the fiduciary’s financial account. For more information on guardianships and conservatorships, visit: caregiver.org/protective-proceedings-guardianships-and-conservatorships   All that said, many people do not need to retain all financial statements “forever.” Here are some suggestions on what to keep and when to purge.   Tax returns? The Internal Revenue Service urges you to keep federal tax returns until the period of limitations runs out. The period of limitations = the time frame you have to claim a credit or refund, or the time frame in which the IRS can levy additional taxes on you. (This is a good guideline for state returns as well.)2      If you file a claim for a credit or refund after you file your tax return, the IRS would like you to keep the relevant tax records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. If you claim a loss from worthless securities or bad debt deduction, you are advised to hang onto those records for 7 years. The IRS also advises you to retain employment tax records for at least 4 years after the date that the tax becomes due or is paid – again, whichever is later. The exception is if you...