It depends on the lipstick, but as said above clues are smell, texture and color. i had one go bad after a month (curtsy lipstick) and others from 05 still smell like vanilla and works well.
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I go by the smell or by how it looks (anything weird or strong change of color I would throw away). I have lipsticks that are 4-5 years old that still have the MAC vanilla smell and they are fine.
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I still have a MAC Bunny Pink lipstick that smells and is fine texture wise. Lipstick isn't as prone to bacteria as a lipgloss would be. I just pour alcohol over and and wipe it off before use. I see no problem, as long as you keep it sanitized =)