Archival and sentimental paperwork should be kept separate from current paperwork. First, you deal with current files. Current material is paper that you reference at least several times a year. Ongoing projects Health care for the current year - recent prescriptions, any paper from recent visits. Old health care records will go in archival files.
Some people set up alphabetical files, others file by groups.
You should file the way you feel most comfortable. If you haven't referenced the piece of paper in the past year but you've decided you need to keep it, it's archival. Keep in mind that you shouldn't be holding on to a lot of archival material. The Handygirl web site also lists a lot of good software for paper management. If nothing bad would happen if you threw it away or if you could get another copy, then by all means, pitch it.