Ask Kim
Keep Only Key Retirement Account Forms
How long do I need to keep 401(k) and IRA statements?
By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance
February 6, 2004
How long do I need to keep 401(k) and IRA statements? Over the years, I have accumulated a lot of them, and I expect many more to come. It is becoming a burden to keep them.
You can toss most of the statements reporting your trades and investment performance, since they don't affect your tax situation. But hold on to records showing how much money went in and came out -- especially if you've made any nondeductible contributions -- so you won't end up overpaying your tax bill when you withdraw the money.
Keep any 8606 forms on which you reported nondeductible contributions to traditional IRAs. Ed Slott, author of IRAhelp.com and The Retirement Savings Time Bomb ... and How to Defuse It, suggests keeping 5498 forms received from IRA custodians, too. They usually arrive in May. You don't need them for tax purposes, but they do have a lot of helpful information, such as listing regular and Roth IRA contributions and the fair-market value of the IRA at the end of the previous year.
When you start withdrawing money, you should hold onto Form 1099-R, which documents your distributions. All these pieces go into the puzzle of determining the taxable portion of your withdrawals.
You don't need to keep deductible IRA records quite as long because you'll be paying taxes on all of your withdrawals. The same is true for 401(k)s, unless you've made after-tax contributions. If you have, keep track so you aren't taxed again on that money when it's withdrawn.
You probably won't need Roth IRA statements after you reach age 59½ and have held the account for at least five years, when all of the money becomes tax-free. But you'll need the records before then, in case you want to withdraw contributions tax free, make early withdrawals or close out your accounts to write off a loss.