What Is a Data Retention Policy? Best Practices + Template
Your data is a precious commodity, but managing massive volumes of emails, reports, and private contracts can quickly become a burden. Businesses cannot keep all this data forever, nor should they.
Data retention policies eliminate the guesswork in managing this information by providing a clear framework for what to keep, where to store it, and for how long. With privacy laws making data retention and deletion mandatory for many industries, structured information storage is a priority for any modern business.
Key Takeaways
A data retention policy defines what data your organization keeps, how long you keep it, where it’s stored, and how it’s deleted.
Policies must align with regulations like GDPR, HIPAA, SOX, and PCI DSS — each with different required retention periods.
Retaining data longer than necessary increases breach exposure, storage costs, and legal liability.
Strong policies classify data by type, assign retention periods, automate deletion, and designate clear ownership.
Drata’s Agentic Trust Management Platform helps organizations document, monitor, and audit data retention policies continuously.
What Is a Data Retention Policy?
A data retention policy is a company’s protocol for maintaining data in accordance with regulatory and contractual obligations. Also known as a records retention policy, it clarifies data handling and holding timelines, storage system requirements, and data formats.
Your data retention policy is a foundational part of your larger GRC and privacy program. It highlights the reasons you should keep certain data, where those documents should be kept, and when and how they should be deleted from your systems based on the regulations that apply to your organization.
Why a Data Retention Policy Matters
Regulatory Compliance
A strong retention policy ensures you meet GDPR’s “right to be forgotten” requirements, HIPAA’s patient data rules, and SOX’s financial record timelines. When regulators request proof of data deletion, you can demonstrate compliance through a simple policy walkthrough rather than frantically searching backup drives.
Reduced Fines
Adhering to data storage and retention requirements minimizes fines associated with non-compliance. For one, your policy and its resulting workflows take into account the requirements of any applicable laws, which automatically reduces the chance of violations. For example, if you’re an online retailer with customers in the European Union, your data retention policy will outline when personal data is deleted in accordance with GDPR, so you’re less likely to be fined.
Also, bad actors can’t get their hands on data you don’t have. Data that no longer exists can’t be compromised in a breach, so regular deletion decreases both your compliance risk and your exposure to expensive data incidents.
Reduced Storage Costs
Data accumulates relentlessly, piling up year after year without intervention. A retention policy tackles this growth systematically through deletion schedules and by moving older information to cheaper storage tiers. This prevents storage sprawl and optimizes your infrastructure spend.
Improved Data Quality
Employees shouldn’t have to wade through records from clients who left years ago. Retention policies automatically purge outdated information, leaving behind current, actionable data. This results in cleaner search results, accurate reports, and analytics based on relevant information.
Reduced Legal Exposure
Legal discovery is expensive when lawyers must review years of irrelevant emails and outdated files. Systematically deleting old data reduces the material opposing counsel can request and cuts discovery costs significantly. Courts also view proactive data management favorably as a standard business practice.
Faster Incident Recovery
During a system crash, every minute of downtime costs money. A retention policy assists recovery efforts by ensuring backup systems only contain necessary data rather than years of digital debris. Less clutter equals faster recovery and shorter outages.
What Should a Data Retention Policy Include?
A comprehensive data retention policy should be clear, actionable, and tailored to your organization’s specific regulatory landscape. At a minimum, it should include the following key components:
Data Classification and Scope: Define what types of data your organization collects (e.g., PII, financial records) and which systems fall under the policy’s scope.
Retention Periods by Data Type: Specify exactly how long each category of data must be kept to satisfy legal, regulatory, and business requirements.
Access Controls and Storage Rules: Detail where different types of data will be stored and who has permission to access or modify them.
Secure Data Disposal Procedures: Outline the exact methods for deleting or anonymizing data once its retention period expires.
Exceptions and Legal Holds: Establish a process for suspending automated deletion if data is needed for pending litigation, audits, or investigations.
Review Cycle and Policy Ownership: Identify who is responsible for enforcing the policy and how often it will be reviewed.
Data Retention Periods: How Long Should You Keep Data?
A data retention period is the amount of time an organization stores data before archiving or deleting it. These limits depend on the type of information collected, its intended use, and governing regulations. Retention periods should be long enough to meet business needs without becoming a liability.
€5.65 billion
Total GDPR fines reached approximately €5.65 billion by early 2025 — with 2024 penalties including €310M against LinkedIn and €251M against Meta.
GDPR Enforcement TrackerRegulatory Requirements by Framework
The different regulations that apply to your industry or the type of data collected affect how long you should keep a specific type of data. Some regulations dictate a minimum amount of time to store data, and some specify a maximum. For example, the PCI DSS outlines specific data storage requirements to make sure credit card information is processed and stored securely. If there is a recorded and authorised business need, credit card information storage may only occur until the data is processed. It must then be destroyed.
Other regulations provide similar guidance. HIPAA requires covered entities to retain required documentation, such as policies, procedures, and records of compliance activities, for at least six years, while SOX requires audit firms to retain audit and review workpapers for seven years. In contrast, privacy regulations like GDPR require organizations to delete personal data as soon as it’s no longer necessary for the purpose it was collected.
Below is an overview of data retention timelines mapped to security frameworks. Use it to understand baseline requirements for your industry and identify which regulations apply to your specific data types.
Framework | Example of Covered Data Types | Typical Retention Guidance | Notes |
GDPR | Personal data (EU citizens), including customer and employee data | No fixed period, data must be kept no longer than necessary for the purpose it was collected | Requires justification for retention periods |
SOC 2 | Audit evidence including logs, monitoring data, access records, and compliance documentation | One to three years for logs, monitoring data, and access controls as a best practice | AICPA does not prescribe specific retention; data must support controls and audit readiness |
HIPAA | HIPAA-required documentation: policies, procedures, and records of required actions, activities, and assessments | Federal law states six years from the date of creation or last effective use, but state laws vary | State laws may extend or supersede this requirement; applies to covered entities and business associates |
PCI DSS | Credit card data, transaction logs, and authorization records | Sensitive cardholder data: retain only as long as necessary (typically deleted after processing); logs: minimum one year, with at least three months immediately available | Storing full cardholder data is prohibited unless absolutely required, and must be encrypted |
SOX | Financial records, audit workpapers, communications with auditors | Seven years after creation or filing, whichever is later | Applies to publicly traded U.S. companies and associated accounting firms |
Business and Operational Obligations
Your data’s lifecycle depends on its classification and how it’s used within your organization. Business obligations, such as maintaining records for internal audits or resolving customer disputes, often require data to be retained beyond its immediate use. For example, emails may be deleted after 90 days, while contracts are stored for years to meet operational requirements.
Data Retention Examples by Data Type
Customer Records: Retain active customer data; delete personal data within 30 days of account closure per GDPR.
Employee Files: Keep for the duration of employment plus 3-7 years depending on local labor laws.
Financial Data: Retain tax and audit records for 7 years per SOX and IRS guidelines.
Server Logs: Typically retained for 90 days to 1 year for security monitoring and SOC 2 compliance.
Contracts: Retain for the life of the agreement plus the applicable statute of limitations for breach of contract claims.
Risk and Liability Considerations
Holding onto data past its usefulness increases the chance that outdated information could be subpoenaed during a legal dispute. Furthermore, the more unnecessary data you store, the greater your exposure during a security breach. Deleting unneeded data proactively minimizes both legal and cybersecurity risks.
Data Retention vs. Data Backup vs. Data Archiving
It’s easy to confuse retention, backups, and archiving, but each serves a distinct purpose in your data lifecycle management and requires its own backup retention policy.
Concept | Purpose | Typical Use Case |
Data Retention | Dictates how long data must be kept for legal, regulatory, or business reasons. | Retaining audit and review workpapers for 7 years to comply with SOX. |
Data Backup | Creates copies of active data to restore systems in case of data loss, corruption, or ransomware. | Restoring a database after a server crash. |
Data Archiving | Moves inactive data to cheaper, long-term storage for future reference. | Moving completed project files off expensive primary storage. |
Data Retention Policy Best Practices
A good data retention policy meets both regulatory requirements and your organization’s practical needs. As you build your policy, keep these additional factors in mind.
Identify Legal and Regulatory Requirements: Research applicable laws governing your data and consult legal counsel to ensure all regulations are incorporated into your policy.
Classify Data by Type and Business Need: Prioritize valuable data, specify what types should be retained, and clarify the timelines associated with each category.
Build Cross-Functional Ownership: Include internal legal, finance, IT, and accounting departments in the drafting process to create a comprehensive policy that represents the entire organization.
Automate Retention Enforcement: Implement a trust management platform like Drata to monitor and audit retention-related controls, reducing human error and IT burden.
Plan for Legal Holds: Establish a legal hold process to pause routine deletions and preserve relevant data during litigation or audits.
Eliminate Data Silos: Apply retention and backup standards to all storage locations, including laptops and third-party cloud tools, to ensure no data is missed.
Review and Update Policies Regularly: Maintain formal documentation and update it regularly to satisfy new mandates, adapt to new business tools, and educate stakeholders.
Common Data Retention Challenges (and How to Fix Them)
Data retention policies significantly reduce information collection and storage challenges. However, stringent policies still come with drawbacks.
Data Disposal
Deleting data is a major compliance risk when files get renamed, copied to personal drives, or moved outside retention workflows. Even automated tools fail if teams ignore naming conventions or store data incorrectly.
What to do:
Enforce strict storage and naming conventions.
Run quarterly audits to flag files that should have been deleted.
Educate employees on how everyday habits break compliance.
Storage Sprawl
Your organization will produce more data as it grows, turning temporary storage into long-term dumping grounds. Without clear deletion rules, cloud costs rise, systems slow down, and legal risks increase.
What to do:
Review high-volume data sources quarterly.
Flag anything unrelated to legal or operational needs.
Set expiration dates on data types prone to sprawl, like logs and drafts.
Managing Multiple Retention Schedules
No single retention rule fits everything, resulting in a mess of overlapping timelines across state laws, client contracts, and industry standards.
What to do:
Classify data by type and tag it with applicable regulations.
Use policy management tools that apply timelines automatically based on tags.
Revisit schedules yearly to keep pace with regulatory changes.
Tool Sprawl
Different teams use different tools, creating data silos across platforms like GitHub, Jira, and cloud folders. Enforcing consistent retention policies is nearly impossible if every system manages data differently.
What to do:
Inventory your tools and map what types of data each team stores.
Standardize retention rules across systems.
Use integrations or APIs to apply automated rules where possible.
Misalignment Between Legal and Technical Teams
Legal teams want to keep data longer for defensibility, while engineering teams want to delete it sooner for performance. Without alignment, policies become either too strict to implement or too weak to protect the business.
What to do:
Bring both teams into the policy development process.
Agree on data categories that merit long-term retention.
Build exceptions into the policy for technically burdensome cases.
Outdated Retention Policies
Your data retention needs grow with your organization as you adopt new tools, enter regulated markets, or face new laws. It is dangerous to write a data retention policy once and leave it to age quietly.
What to do:
Review your retention policy at least annually.
Assign a specific owner responsible for updates and cross-team coordination.
Use version control to track policy changes over time.
How to Create a Data Retention Policy
While many organizations outsource the creation of a data retention policy, it’s certainly possible to outline and implement one internally. Here’s how to design your policy:
Step 1 — Assign Responsibility
To design a data retention policy, you need a cross-functional team of industry experts. Assign individuals with IT, security, and legal expertise from across your organization. This team will be responsible for the policy’s research, creation, and implementation.
Step 2 — Determine Legal Requirements
A record retention policy must meet or exceed the expectations required by external data regulations. Require your policy team to consider the timeframes outlined within these legal frameworks before suggesting internal guidelines.
Step 3 — Define Business Requirements
While data regulations drive retention timelines, business requirements are equally important. Consider how long your organization needs to use and maintain information, especially if your operational needs exceed legal retention requirements. Identify and incorporate archival timelines and disposal expectations into your guidelines.
Step 4 — Audit Your Current Data
Identify and classify the data your organization currently stores. Recognize the storage and archival timelines your organization must adhere to based on your industry. Audit your current management processes to identify compliance gaps.
Step 5 — Identify Revision Frequency
To stay compliant, you must update your data retention policies when laws and regulations change. Identify when your team needs to conduct policy reviews following any shifts in contractual compliance requirements. Assign responsibility for emergency policy updates to ensure continuous compliance.
Step 6 — Set Governance Expectations
Collaborate with HR and legal departments regarding policy enforcement. Your organization should write governance policies outlining clear team expectations. Include specific guidelines for information collection, storage, archival, and disposal.
Step 7 — Decide Implementation Requirements
Outline your team’s implementation requirements, including exactly when and how the data retention policy takes effect. Clarify information handling workflows across all departments. Ensure storage and disposal timelines are explicitly stated within these requirements.
Step 8 — Write, Review, and Approve the Policy
After analyzing your requirements, write a formal data retention policy that balances team needs with compliance laws. Design a flexible yet authoritative document. Ensure this policy is reviewed and approved by key internal stakeholders before implementation begins.
How Drata Helps You Manage Data Retention
Building a data retention policy is only the first step; enforcing it continuously across your entire tech stack is where most organizations struggle. Drata’s Agentic Trust Management Platform simplifies this process by providing pre-mapped frameworks and policy templates for frameworks like GDPR, SOC 2, HIPAA, and ISO 27001.
With Drata, you can automate evidence collection, monitor your security controls in real-time, and monitor and audit your data retention controls as your business scales. Instead of managing retention schedules in spreadsheets, Drata gives you a single source of truth for all your compliance needs.
Frequently Asked Questions About Data Retention Policies
Do I need a data retention policy?
Yes, if your organization collects or stores any data, you need a retention policy to reduce legal risk, improve efficiency, and ensure compliance during audits.
How long should data be retained?
Retention timelines depend on the data type, regulatory requirements, and business needs, so you should define and document specific periods for each data category.
What is the data retention policy under GDPR?
Under GDPR, personal data should only be kept for as long as necessary to fulfill its original purpose, after which it must be securely deleted or anonymized.
What is a good data retention policy?
A good data retention policy strikes a balance between legal compliance and operational practicality by clearly classifying data, defining retention timelines, and establishing secure deletion procedures.
What is the 7-year data retention policy?
The 7-year retention rule typically refers to SOX requirements for audit firms to retain audit and review workpapers, and to IRS guidelines for keeping tax records, which point to retention periods of around seven years.
What is an example of a data retention policy?
An example policy might require retaining customer transaction records for seven years per SOX, deleting personal data within 30 days of account closure per GDPR, and purging server logs after 90 days.
What records need to be kept for 30 years?
Under OSHA regulations, employee exposure records related to toxic substances or harmful physical agents must be retained for 30 years, making it one of the longest mandatory retention periods.