Image: Shredder © James Darell, Getty Images

It can be tricky to figure out what paperwork you need to keep and what you can toss. Too often we cling to paper because we may need it "someday."

"It's all fear, baby!" said professional organizer Monica Ricci of Catalyst Organizing in Atlanta. "We often fear what we are unsure of or don't understand. . . . If you're uncertain about the value or whether you'll need it again, you tend to err on the conservative side and keep it."

That can lead to overstuffed filing cabinets and paperwork clutter that weighs on your psyche.

But so much of what we keep is really unnecessary. To relieve your soul, and your filing cabinets, here's a list of paperwork you can live without. Such as:

401k statements

There's usually no need to keep these for tax purposes -- or any other purpose, for that matter.

When you put money into a workplace retirement plan -- a 401k, 403b, 457, SEP or SIMPLE -- you typically get a deduction for those contributions, and your returns grow tax-deferred.

But the tax man has to be paid eventually. When you take out the money, you typically pay taxes on the whole withdrawal -- none of it is sheltered. No amount of paperwork saved over the years will change that, so you might as well shred the statements and give your file cabinets some wiggle room.

Liz Weston

Liz Weston

One exception is when you make after-tax contributions to a retirement plan, such as those made to a Roth 401k. If you've made such contributions, your year-end summary should reflect that. Hang on to those so you can avoid paying taxes on the contributions when you withdraw them, and ditch the intervening statements.

You'll also want to keep the annual statements once you start taking withdrawals from the plans in retirement.

"Folks who are obligated to make mandatory withdrawals at age 70 1/2 and beyond may need to be able to prove the date on which their withdrawals started," said Los Angeles tax pro Eva Rosenberg, who blogs at TaxMama.com. "So I would try to get a printed or .pdf annual statement, showing the transactions for the year."

What about hanging on to the statements to see how your investments perform over the years? Well, you can do that, or you can use this newfangled thingy called the Internet to track the progress of your investments. Most 401k providers have all the information you'll ever need on their websites.

You'll need to keep more paperwork when it comes to your individual retirement accounts and Roth IRAs. Hang on to the following forms until your retirement accounts are emptied:

  • Form 8606, which tracks your nondeductible contributions.
  • Form 5498, which shows your annual contributions and the account's fair market value.
  • Form 1099-R, which details any withdrawals.

If you're one of the dwindling number of people who are covered by a traditional defined-benefit pension, keep the annual statements indefinitely. Those can help you track down your retirement benefits, even if the company shuts down someday.

Old insurance policies

The usual advice is to ditch the old versions of your insurance policies once the replacements arrive.

But consumer advocate Amy Bach, the executive director of United Policyholders, thinks it's worth scanning and saving homeowners policies (although you can still ditch the paperwork once it's scanned). Insurance companies are constantly shrinking the coverage they offer, Bach said, and they may not give you adequate notice of changes to your policy.

"If you suffer a loss, and your current policy offers less coverage than you thought you had, and if you feel you didn't get adequate notice about the reduction in coverage, you'd have proof of the better, older coverage," Bach said. "After the Northridge earthquake (in Los Angeles in 1994), there was a huge settlement with Allstate homeowners who proved through their very good lawyers that they got inadequate notice of reduction in their earthquake coverage under their homeowners insurance."