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 "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."

Scanning policies and storing them off-site, even if it's just as an attachment to an email, is a smart practice in any case. If your house is destroyed, you'll still have access to your policies.

You'd think you could get copies from your insurer or your insurance agent, but that's not always the case, Bach said.

"People are reporting to United Policyholders that their agents or brokers say they don't keep copies of the policies," Bach said, "and people seem to have trouble getting them."

If you find an expired life insurance policy, call the insurer to see if it has any value. If not, out it goes.

Claims are a different story. If you get a fat check from your insurer -- for a totaled car, for example -- you may want to hang on to the claim information for seven years, in case the Internal Revenue Service has questions about where that money came from. It's unlikely, so don't panic if you haven't kept such paperwork in the past. Just keep the possibility in mind going forward.

Medical claims can be problematic. If you've ever been dunned by a doctor for a bill you thought was long since paid by your insurer, you'll understand why it may be smart to hang on to claim information for a few years. You don't have to keep the actual paper, though. It's OK to scan the paperwork and store the digital copies off-site.

Investment prospectuses

Your mutual fund companies have to provide these by law, and they contain lots of important information, like the fees you're being charged. But do you read them? Yeah, right.

The information they contain is online if you ever need it. Consider signing up for electronic delivery so you can ignore further prospectuses without killing trees.

Old tax documents

You'd be smart to hang on to your actual tax returns indefinitely, but all the supporting documentation can be shredded after seven years.

The stuff you should keep includes not only the main form you send in (1040, 1040A, 1040EZ) but also any schedules (such as Schedule A, which details your itemized deductions, or Schedule C, for a business) and other attached forms, such as your W-2s. In short, if you send it to the IRS, you should keep a copy.

The rest of your documentation -- the paperwork you'd dig out if you were ever audited -- can be destroyed after the risk of being audited essentially expires at seven years (the IRS can audit you any time if it suspects fraud, but such audits are rare). This disposable documentation includes things like receipts for charitable contributions, records of child care expenses and canceled checks or receipts tracking other tax-deductible costs.

Bank and credit card statements

If they're not tax-related, you can shred these after a year, which is well past the point any disputes or other problems are likely to arise. If they are tax-related, keep them for seven years, but don't panic if you accidentally shred them early. Banks and card issuers typically give you online access to your statements for at least six years, so you can get copies of statements if you need them.

All the intermediaries

You can ditch ATM receipts and credit card slips after you make sure they're properly reflected in your monthly statements. You can ditch pay stubs after you get your W-2 form for the year (although you should hang on to your last stub of the year if you paid union dues or other tax-deductible expenses that aren't reflected anywhere else). If you get a detailed year-end summary of an account, you can trash the intervening monthly or quarterly statements.

Regular old bills

If they're tax-related, keep them for seven years. Otherwise, there's little reason to hang on to these. Shred utility, phone and Internet service bills after a year or so. If you get monthly statements and payment coupons for loans, you can shred those when you get your year-end statements -- or, better yet, sign up for electronic statements and payments to rid yourself of this unnecessary paper. Once you pay off a loan, hang on to the last statement showing a zero balance, just in case you get dunned by a clueless collector down the road.

Paperwork for stuff you no longer own

Trash warranties, registration cards and owner's manuals for anything no longer in your possession. The exception is real estate or any other asset that might have tax implications; you'll want to hang on to that paperwork for seven years after you sell.

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There you go -- a ton of paperwork goes off to the shredder, and you never have to worry about it again. That should lift a load off your psyche.

Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.