More than 8.1 million identities were stolen last year, and on average, victims were responsible for paying $631 in out-of-pocket costs to cover fraudulent debt or legal fees, according to a report by Javelin Strategy and Research.

These days the focus is on how best to protect your information online, however it's just as important to not be lax with your paper documents. With National Protect Your Identity Week in full swing, now is a great time to consider buying a shredder.

We've always recommend you shred important documents, but sometimes it can be confusing to know which documents to shred and which you can throw away. Below are some guidelines to follow.

Shred:

• Monthly bills and employer pay stubs.
  
• Receipts or other papers with your signature.
  
• Statements from your bank, credit-card companies, 401(k) administrator, and all other investment statements.
  
• Anything that contains your Social Security number.
  
• Expired credit cards, and prescreened credit-card offers and application.
  
• Tax forms and tax-related documents more than seven years old.
  
• Any documents that lists a password or PIN.

Consider shredding:

• All mail from your financial institution, including change-of-terms notices.
  
• Documents from companies you’ve done business with recently, including travel.

Can recycle without shredding:

• Mail that contains only your name and address, such as catalogs or flyers not from a financial institution, as well as junk mail addressed to “Resident” or “Occupant.”

For the full review of paper shredders and list of tested models see our Review of paper shredders. And for additional advice information about how best to protect your identity check out Guide to Online Security.

2011 Identity Fraud Survey Report: Identity Fraud Decreases - but Remaining Frauds Cost Consumers More Time & Money [Javelin Strategy & Research]