Paper or ElectronicSubmitted by Brian Gaffney on April 5th, 2016
Paper or Electronic
By John Napolitano, CFP®, CPA, PFS, MST, RLP®
You may frequently hear as you check out from the supermarket, paper or plastic? With your financial records, the question is paper or electronic? Every service provider from your accountant to your investment accounts want you to stop getting paper copies of everything and go to their secure portal to access what you need when you need it. Is this the right thing to do? Is it safe? How secure is secure?
Let’s begin with what is not secure. Copies of your personally identifiable information such as social security numbers and account numbers sitting in your mailbox or going out in your trash is not considered secure. Neither are all email accounts secure. Personal information sent via e mail should be encrypted, which may require you to go through a little extra effort to actually get to the message containing the personal information. To fix the trash problem, simply shred anything that has your personal information on it, including all of the pre-approved credit card solicitations that you receive. For e mail, find out if your e mail host has encryption. If not, ask them what service they may recommend to protect email that you may send or receive with personal information on it. The mailbox issue may be best resolved by limiting what information actually arrives in that box.
Many progressive CPA firms, for example, no longer send paper copies of returns in the mail or a disk containing the information. They may ask you to go to a secure portal, often hosted by the software company that firm uses to prepare the return, to see and access a copy of your return. Your law firm may suggest something similar, and that should be acceptable to you.
One easy way to mitigate the risk of any ‘secure’ sites that you set up is to have a more complicated password. I know that this becomes an issue with all of the rules requiring a regular password change, but unfortunately this is good defense. Also, do not use the same password for each secure account or site that you access. Another preventative solution; do not store your passwords on sticky notes affixed to your monitor.
Many old school types don’t want anything to do with their confidential information stored in cyberspace on anyone’s cloud. But you really do not have a choice these days. Your information is already stored in cyberspace; by the taxing authorities, banks, investment companies, medical companies or just about anyone who may need access to that information stores it electronically. Just because you choose not to access it doesn’t mean that it isn’t stored electronically on some company’s server somewhere.
If you are now convinced, and want to try the electronic route, make sure that your computer is up to date and not an old clunker running operating software that is out of date. Keep your system current, with a firewall and anti-virus software to prevent any crooks from stealing your online identity from your own computer.