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Money Order vs. Cashier’s Check: How to Decide

There are times when a personal check doesn’t cut it. You may have an important expense, such as a used-car purchase or a rent deposit, but the person you’re paying won’t accept that little piece of paper from your checkbook.

The recipient may ask instead for some form of guaranteed payment. If you’re not keen on carrying around large amounts of cash, your other options include a money order or a cashier’s check.

The $1,000 question

Money orders generally are cheaper and therefore better for payments under $1,000. Cashier’s checks, sometimes called official checks, are often better for larger amounts.

Many businesses won’t issue a money order above $1,000. So if you have to write a check for more than a grand — say, $5,000 to buy a used car — a cashier’s check may be your best option.

Cashier’s checks can be written for less than $1,000, but they usually cost more than money orders. Money orders can sell for less than $2, while cashier’s checks in any amount often cost around $10.

Wal-Mart has some of the cheapest prices for money orders, charging 70 cents for amounts up to $1,000. The U.S. Postal Service charges between $1.20 and $1.60, depending on the amount. Banks often charge around $5.

Though cashier’s checks cost more, some banks and credit unions waive the fees for customers with premium accounts. It’s worth asking your financial institution if you qualify.

The amount of the check may be the most important factor when choosing between a money order and cashier’s check. But there are other differences between them.

Where to buy money orders and cashier’s checks

You can buy money orders at post offices, retail stores, banks, money transfer outlets and elsewhere. Going to a supermarket to buy milk? You could also pick up a money order at the customer-service counter.

Cashier’s checks, on the other hand, usually are available only from financial institutions.

If you’re hoping to buy either one online, you won’t have much luck. Issuers generally require that you visit a physical location to buy a money order or cashier’s check. You could ask your recipient if you could send money online instead.

Protections of money orders and cashier’s checks

If you lose a cashier’s check or money order, or if it’s stolen, you can take steps to recover your money. You’d generally need to go to the issuer with your receipt and ask for a refund. That makes either option better than carrying cash.

But cashier’s checks offer a bit more protection, since the financial institution fills out the “pay to” line, instead of the purchaser. Compare that with writing a money order, which is similar to writing a check. The purchaser has to fill in the receiver’s name. If the purchaser loses the money order before it’s filled in, anyone could cash it. And once someone cashes that money order, you more than likely won’t get your money back.

If a money order or cashier’s check is cashed fraudulently, the purchaser could contact police and work through the legal system to try to recover the money.

Since it already has the payee’s name typed on it, a cashier’s check provides an extra level of protection for both the sender and the receiver. And an official check drawn up by a financial institution may seem more credible to a receiver than a money order from Chucky’s 24-Hour Market. But either option is a good way to offer guaranteed payment.

Margarette Burnette is a staff writer at NerdWallet, a personal finance website. Email: mburnette@nerdwallet.com. Twitter: @margarette.

Wells Fargo Execs to Give Back Some of Their Millions Following Fake Account Scandal

The Wells Fargo sales scandal will cost chairman and chief executive John Stumpf $41 million and former community banking supervisor Carrie Tolstedt $19 million, as per a decision made by the bank’s board announced on Tuesday. The money will come from the executives’ unvested equity awards through a clawback process.

For Stumpf, the $41 million is about 25% of the compensation he received during his 35 years at the bank, the Wall Street Journal said; he earned a total compensation of $19.3 million in 2015, according to an Equilar data analysis. Stumpf will also forego his salary during an independent internal investigation mandated by the bank’s board. He will not receive a bonus for 2016.

Carrie Tolstedt, who was head of community banking, has left the company ahead of her planned December retirement and will forfeit all of her outstanding unvested equity awards, valued at approximately $19 million, based on Tuesday’s closing share price. She also won’t receive a bonus for 2016 or be paid severance or receive any retirement enhancements in connection with her separation from the company, according to a statement from Wells Fargo. “She has also agreed that she will not exercise her outstanding options during the pendency of the investigation,” according to the statement.

Wells Fargo faced a $185 million penalty fine by the Consumer Financial Protection Bureau and a thrashing by the U.S. Senate Committee on Banking earlier this month over some two million accounts that were opened using fictitious or unauthorized information without customers’ consent. The actions were the result of a cross-selling incentive that gave employees bonuses if they met quotas. Former employees have claimed they were fired or demoted for not meeting the impossible quotas set by the bank, and have filed a $2.6 billion class action lawsuit. The bank fired 5,300 employees over the fraud but took no action against the supervising executives, which drew further criticism from the Senate Committee last week.

In Stumpf’s prepared testimony to the Senate, he said he was “deeply sorry” and takes full responsibility for “all unethical sales practices in our retail banking business, and I am fully committed to doing everything possible to fix this issue.” He said the fraudulent accounts were not done through an orchestrated effort by the company and employees were never directed to provide products and services that customers did not want or need.

The Independent Directors of the Board of Directors of Wells Fargo & Company have launched an independent investigation into the company’s retail banking sales practices and related matters, and a special committee of independent directors will lead the investigation, working with the board’s Human Resources committee and independent counsel. Stumpf has recused himself from all matters related to the Independent Directors’ investigation and deliberations.

“We are deeply concerned by these matters, and we are committed to ensuring that all aspects of the Company’s business are conducted with integrity, transparency, and oversight,” Stephen Sanger, lead independent director, said in a press release. He noted, the bank may take other employee related actions “so there can be no repetition of similar conduct.”

This moment in history may produce repercussions: Earlier this month, regulators proposed tighter restrictions on how Wall Street bankers are paid.

Wells Fargo had not responded to requests for follow-up comment by press time.

Remember, it’s always a good idea in general to monitor your credit report for any unauthorized accounts in your name. You can pull your credit reports for free each year at AnnualCreditReport.com and get a free snapshot of your credit report, updated every two weeks, at Credit.com.

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This article originally appeared on Credit.com.

Here's Why Amy Schumer Is the Most Dangerous Person on the Internet

You may want to think twice before searching for the recent Mets kiss cam video starring comedian Amy Schumer. No, it isn’t something that’s NSFW — you never know with Schumer — but it turns out she is the most dangerous celebrity on the internet. At least that’s what the 10th annual McAfee Most Dangerous Celebrities report says.

How is this comedian so dangerous, you ask?

“Consumers today remain fascinated with celebrity culture and go online to find the latest pop culture news,” Gary Davis, chief consumer security evangelist at Intel Security, said in a press release. “With this craving for real-time information, many search and click without considering potential security risks. Cybercriminals know this and take advantage of this behavior by attempting to lead them to unsafe sites loaded with malware.”

Schumer is topping all kinds of charts this week, also making the fourth spot on the Forbes’ list of highest-paid comedians, earning an estimated $17 million last year — making her the first woman to ever crack the list. Because she was so professionally active, there’s a lot involving her you may want to see. So, whether you’re searching for a review of her new book, “The Girl With the Lower Back Tattoo,” (which is really good, by the way) or a place to download her hit movie, Trainwreck, it’s a good idea to do so with caution (always be careful what links you’re clicking on and only download materials from sites you know are legitimate and trustworthy.)

Schumer and her representatives did not immediately respond to Credit.com’s request for comment.

Who Else is a Little Risky?

Aside from Schumer, Chris Hardwick and Daniel Tosh — who also made the top 10 — there were some other comedians who made the list of the most dangerous celebrities online, including Nikki Glaser (15th), Kevin Hart (25th), Mindy Kaling (30th), Kristen Wiig (52nd), Chelsea Handler (54th) and Ellen DeGeneres (57th).

Stars from the music industry made up half of the top 10 list, but also took up a lot of real estate in the top 30, with stars like Drake (13th), Katy Perry (14th), Jason Aldean (16th), Justin Timberlake (17th), Jennifer Lopez (18th), Lady Gaga (19th), Nicki Minaj (20th), Iggy Azalea (27th), Beyoncé (28th) and Usher (29th).

Here are the top 10 celebrities considered to be the highest-risk to search for online.

  1. Amy Schumer
  2. Justin Bieber
  3. Carson Daly
  4. Will Smith
  5. Rihanna
  6. Miley Cyrus
  7. Chris Hardwick
  8. Daniel Tosh
  9. Selena Gomez
  10. Kesha

Methodology

To compile this list, Intel Security used ratings from its McAfee WebAdvisor product to determine the number of risky sites created by online searches (on Google, Bing and Yahoo) of celebrity names paired with commonly search terms, like torrent, free MP4 and HD download that were likely to generate malware. From there, Intel established a risk percentage for each celebrity, deeming the most dangerous as ones that are “likely popular search subjects,” according to the press release.

Last Call With Online Security

If you couldn’t resist clicking on a Carson Daly link because you wanted that Total Request Live nostalgia only to discover it was a scam, it may be a good idea to check your credit for any signs that your identity was compromised. Some tell-all signs of this include opened accounts you don’t recognize and a sudden drop in your scores. You can get annual copies of your credit reports for free from the three major credit bureaus — TransUnion, Experian and Equifax — by visiting AnnualCreditReport.com. And you can keep an eye on your credit on a more frequent basis by viewing two of your free credit scores, updated every 14 days, on Credit.com.

 

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This article originally appeared on Credit.com.

Making Millions Behind Bars

MoneyTips

If you are going to be stuck in prison, you may as well make some money while you are doing time. We are not talking about making license plates or working in the laundry, but drawing in thousands —even millions — of cash. How is that possible? If you and a few friends are willing to bend the law again, it can certainly be done. One example is the strange case of Andrew Weiderhorn. Weiderhorn founded Wilshire Consumer Credit (WCC), becoming a millionaire before the age of 30. After the collapse of WCC, Weiderhorn started Fog Cutter Capital. His activities at WCC drew the attention of law enforcement, and he was charged with crimes including filing a false tax return. Wiederhorn reached a plea deal for a 12-month prison sentence and $4.6 million in fines. While Weiderhorn served time in prison, Fog Cutter's board of directors elected to compensate him with a bonus equal to the fines that he paid — thus he earned $4.6 million while incarcerated. Federal l...

This Year's Most Popular Halloween Costumes Are ...

Princesses be warned: Your reign of popularity among kids celebrating Halloween is over. 2016 is the year of the superhero, according to the National Retail Federation’s 2016 Halloween Consumer Top Costumes Survey.

The annual review of popular Halloween costumes, conducted by Prosper Insights & Analytics, found that spending on costumes is expected to reach $3.1 billion, with 67% of Halloween celebrants planning to purchase costumes this year. Total spending for the holiday is expected to reach a record high of $8.4 billion, according to earlier data from the NRF. More than 171 million people are expected to take part in Halloween festivities, spending an average of $82.93 (up from last year’s $74.34).

The NRF’s costume trends survey, conducted September 6-13, asked 6,791 consumers about their Halloween costume plans. It has a margin of error of plus or minus 1.2 percentage points.

Here are the most popular costumes this year, broken down by age groups (and species), per the NRF.

Children

  1. Action/Superhero
  2. Princess
  3. Animal (cat, dog, lion, monkey, etc.)
  4. Batman Character
  5. Star Wars Character
  6. Tie: Witch & DC Superhero (excluding Batman)
  7. Frozen Character (Anna, Elsa, Olaf)
  8. Marvel Superhero (excluding Spiderman)
  9. Zombie
  10. Spiderman
Adults 18-34 Batman Character (Batman, Harley Quinn, The Joker, etc.) Witch Animal (cat, dog, bunny, etc.) Tie: Marvel Superhero (Deadpool, Spiderman, etc.) & DC Superhero (Wonder Woman, Superman, excluding Batman) Vampire Video Game Character Slasher Movie Villain (Freddy, Jason, Michael Myers, etc.) Pirate Star Wars Character Zombie Adults 35 & Up Witch Pirate Political (Trump, Clinton, etc.) Vampire Batman Character (Batman, Catwoman, etc.) Animal (cat, dog, bunny, etc.) Tie: DC Superhero (Superman, Wonder Woman, excluding Batman) & Star Wars Character Tie: Ghost & Zombie Scary Costume/Mask Marvel Superhero (Iron Man, Hulk, Spiderman, etc.) Pets Pumpkin Hot Dog Bumble Bee Tie: Lion & Star Wars Character Devil Batman Character Witch Superman Action/Superhero Cat Don’t Dig a Debt Grave This Halloween If you have big Halloween plans this year, it’s good to keep in mind that overspending can be scarier than any haunted house. If you’re carrying a large credit card balance that you’re finding difficult to pay off, consider some DIY decorating and costume tips. Remember, too much debt can hurt your credit scores, keeping you from getting the best financing terms available on everything from auto and home loans to credit cards. You can monitor your credit by signing up for your free credit report summary, updated every 14 days on Credit.com. If your credit needs some work, you can generally improve your scores by paying down those high credit card balances, disputing errors on your credit reports and limiting credit inquiries. Related Articles

This article originally appeared on Credit.com.

6 Crucial Money Tips for Young Entrepreneurs

By Dmitriy Fomichenko

Learn more about Dmitriy on NerdWallet’s Ask An Advisor

Entrepreneurs have to wear many hats. One of their key responsibilities is to understand and properly manage their business’s finances. But they must also be careful with how they handle their own money.

Here are smart financial steps every young entrepreneur should consider.

1. Separate your business and personal funds

It’s common for entrepreneurs to use their personal assets as startup capital. But as your business grows, it’s crucial to separate your personal and business funds. Simply knowing which is which is not enough; you must be able to prove the same to the IRS. For instance, in the case of an IRS audit, a sole proprietor or independent contractor would be required to provide proof of his or her business expenses and income, usually by providing receipts and spending records.

From the beginning, sole proprietors and independent contractors should create separate checking accounts for personal and business funds. If your business is a corporation, you’re required by law to keep business and personal funds separate, and you can’t use business funds for personal expenses. If you’re having a hard time separating these funds, seek professional help.

2. Monitor your expenses

One of the surest ways to go out of business is to have more money going out than coming in. Monitoring and categorizing your expenses can help you find ways to control overhead costs or other spending that doesn’t generate revenue or add to your business’s growth. It may also help you identify and claim tax deductions your business may be eligible for, increasing your tax savings. Maintaining good records of your expenses will also save you the hassle of going through a pile of receipts during tax-filing season.

If you’re an independent contractor, have an owner-only business or have only a handful of employees, using something as simple as a spreadsheet or an online calendar to note your regular or recurring expenses will work. Make sure to include the type of expense — rent, utilities, supplies, etc. — and the recipient of the funds. If your business is expanding, you may need to use accounting software.

It’s equally important to have a budget for your personal spending. You can use something as simple as Mint.com to track your monthly expenses. Because your income is likely to vary, even though your expenses may stay the same, it’s particularly important to pay close attention to cash flow.

3. Build up an emergency fund

Small businesses often experience profit fluctuations over the course of a year. That means entrepreneurship and irregular income go hand in hand. Without a buffer of savings, lean months could add to your mental stress. A lack of business capital could even force you to tap your personal savings, which could leave you with no cushion for emergencies. If you don’t already have a personal emergency fund in place, start working on one.

For entrepreneurs, the key to building an emergency fund is to save during your high-earning months. That will allow you to pass leaner months comfortably while ensuring that you can pay your bills on time.

If you have a spouse or partner who has a stable income, your emergency fund should be around six months’ worth of living expenses. However, if your entire family is relying on your business, you should save at least a year’s worth of expenses.

4. Purchase disability insurance

With a business to run, worrying about your own future may not be a top concern. This mindset may work well for your business, but how do you plan to take care of your family if you become sick or temporarily disabled?

Disability insurance can provide supplemental income to your family while you recover. The type of disabilities covered and amounts of coverage will vary depending on your policy. Adding a cost-of-living-adjustment option to your policy is more expensive but ensures that payouts stay current with inflation.

You’ll also want to protect your business in case you’re ill or unable to work. For this, consider business overhead expense insurance. These policies are designed to help cover recurring business expenses like rent or mortgage payments, employees’ salaries, utilities and taxes during your absence. This can help keep your business going while you’re unable to work.

5. Start a retirement savings plan

Without an employer-sponsored retirement plan, it’s entirely your responsibility to fund your retirement. While that may sound distressing, you may actually have the opportunity to save even more than other workers do for your retired life. There are several qualified retirement plans for business owners that allow you to make sizable contributions toward retirement. In most cases, contribution limits to these plans are higher than traditional individual retirement accounts or employer plans. Some of the prevalent retirement options for entrepreneurs include a SEP IRA, SIMPLE IRA or a self-directed 401(k) plan. The key to building adequate retirement funds is to start as early as possible. Having time on your side is your biggest advantage when saving for retirement.

6. Seek professional financial advice

Small-business owners are often too busy to attend to these important financial matters. Hiring a financial advisor for your business and personal finances might help you avoid costly money mistakes. A financial advisor could help you identify business tax deductions, set up a strategy for your personal finances and even help you create an efficient financial structure for your business.

Dmitriy Fomichenko is president and founder of Sense Financial, a provider of self-directed retirement accounts.

This article also appears on Nasdaq.

The IRS Is Hiring Debt Collectors. Here's What You Need to Know

The Internal Revenue Service will soon begin using private collection firms for some overdue federal tax debts, the department announced Monday.

The new program, authorized under a federal law enacted by Congress last December, is slated to begin next spring. Four private, debt-collection contractors — CBE Group, Conserve, Performant and Pioneer — have been designated to collect outstanding tax debts, the IRS said in a prepared announcement.

“As a condition of receiving a contract, these agencies must respect taxpayer rights including, among other things, abiding by the consumer protection provisions of the Fair Debt Collection Practices Act,” the announcement said.

Several factors contribute to the IRS assigning these accounts to private collection agencies, the announcement said, including older, overdue tax accounts or lack of resources preventing the IRS from working the cases.

Look For Written Notice From the IRS

It was unclear from the announcement if these companies will be allowed to call taxpayers about their debts, something the IRS has never done and has previously been a surefire way of spotting a scammer. Calls to the IRS Taxpayer Advocate office were not immediately returned, but the announcement did provide some details regarding the private companies’ IRS debt collection practices that could prove helpful in determining whether any correspondence is legitimate. For instance, the IRS will provide affected taxpayers and their representatives with written notice that an account is being transferred to one of the agencies.

“The agency will then send a second, separate letter to the taxpayer and their representative confirming this transfer,” the announcement said. “Private collection agencies will not ask for payment on a prepaid debit card. Taxpayers will be informed about electronic payment options for taxpayers on IRS.gov/Pay Your Tax Bill. Payment by check should be payable to the U.S. Treasury and sent directly to IRS, not the private collection agency.”

The announcement acknowledged potential confusion with phone tax scams, which involve people posing as IRS agents in order to scare someone into turning over their payment or personal information.

“The IRS will do everything it can to help taxpayers avoid confusion and understand their rights and tax responsibilities,” the agency wrote. “The IRS will continue to keep taxpayers informed about scams and provide tips for protecting themselves. The IRS encourages taxpayers to visit IRS.gov for information including the ‘Tax Scams and Consumer Alerts’ page.”

Protect Yourself

Remember, if you are ever concerned about the legitimacy of debt collectors, particularly those trying to collect a tax debt, it is best to err on the side of caution. If you receive an email, for example, do not open any links. Rather than answer, forward the email to phishing@irs.gov.

If you’re worried you may have already compromised your identity by falling for a tax scam, you may want to monitor your credit to make sure your information hasn’t been used to commit new account fraud. You can pull your credit reports (here’s how to get your free annual credit reports) and you can also check your credit snapshot, updated every 14 days, for free on Credit.com for any unexpected changes, which could be a sign of identity theft.

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This article originally appeared on Credit.com.

Mortgage Rates Today, Sept. 28: Mixed Bag, Cash Sales Drop

Thirty-year mortgage rates inched up, while 15-year fixed and 5/1 ARM rates fell even lower, according to a NerdWallet survey of mortgage rates published by national lenders Wednesday.

Mortgage Rates Today, Tuesday, Sept. 28 (Change from 9/27) 30-year fixed: 3.58% APR (+0.01) 15-year fixed: 2.98% APR (-0.02) 5/1 ARM: 3.41% APR (-0.05) Cash sales hit lowest level since housing crisis began

It looks like investor purchases are taking a back seat in the housing market. Cash sales accounted for 29.3% of total home sales in June 2016, down 2.5 percentage points year over year, according to CoreLogic.

CoreLogic reported that cash sales peaked in January 2011, when cash transactions accounted for nearly half (46.6%) of total home sales in the U.S. During that time, housing markets across the country were just starting a slow but steady recovery following several years of depressed values and a glut of distressed properties on the market.

June 2016 marks the first time that cash sales accounted for under 30% of home purchases since late 2007. Before the downturn, the cash sales share of total home sales averaged approximately 25%. If this downward trend in cash sales continues at the latest rate, the share should hit 25% by mid-2018, wrote Molly Boesel, senior economist at CoreLogic, in a blog post.

Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published APR with the lowest points for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

More from NerdWallet Compare online mortgage refinance lenders Compare mortgage refinance rates Find a mortgage broker

Deborah Kearns is a staff writer at NerdWallet, a personal finance website. Email: dkearns@nerdwallet.com. Twitter: @debbie_kearns.

Investment Advantages of Health Savings Accounts

By Mark Struthers

Learn more about Mark on NerdWallet’s Ask an Advisor

Open enrollment, that time of the year when you can make changes to various benefits options at your workplace, is just around the corner. For most companies, it occurs during the last quarter of the year, October through December.

Those of you with a high-deductible health plan, or HDHP (for 2016, that’s a plan with a deductible of at least $1,300 for an individual or $2,600 for a family), may have the option to open a health savings account, or HSA.

How does it work?

If you have an HDHP, you or your employer can contribute money tax-free to your HSA, up to certain limits, so that you can use tax-free funds to pay for noncovered qualified medical expenses, like deductibles, copays, vision and dental care. The 2016 contribution limit is $6,750 for families and $3,350 for an individual.

Why is it a good idea?

One great advantage of these accounts is that you contribute pretax income, the money grows tax-free, and you don’t pay tax when you withdraw it to use it for eligible medical expenses. In addition, because you’re putting pretax money aside, it lowers your overall taxable income. Plus, it offers significant retirement savings and investment options, which we’ll detail in this article.

How is it different from an FSA?

An HSA is not the only tax-advantaged health plan. The flexible spending account, or FSA, is also a popular option. Unlike an FSA, however, an HSA is not a use-it-or-lose-it proposition. The money in an HSA rolls over from year to year, and if used for qualified health care expenses, both contributions and earnings come out tax-fee. There is no other account like it. And this is where the opportunity lies.

More facts about HSAs
  • You don’t have to use the HSA provider associated with your employer’s health insurance company. HSAs are individual accounts that don’t have to go through your employer. You can shop around for the lowest fees and best investment options.
  • You can choose from many different types of investments within an HSA. In addition to low-risk, savings-type accounts, you can invest in the same type of fixed income and equity mutual funds that may be in your 401(k) or IRA.
  • An HSA is portable. If you change employers, your HSA goes with you, unlike a 401(k).
  • You can reimburse yourself anytime. In other words, you are able to pay medical expenses with non-HSA funds and delay reimbursing yourself from the HSA for years. The most obvious reason to delay is to allow your HSA to grow. This flexibility allows you to make the most out of the performance of your HSA.
  • After age 65, you can use HSA funds for any purpose, and you just have to pay ordinary income tax, without an early-withdrawal penalty. Withdrawals before age 65 that are not used for qualified medical expenses are subject to both income tax and a 20% penalty.
  • If you or your spouse is over 55, you can make a yearly catch-up contribution of $1,000 each. Adding this to the normal contribution limit can give a family $8,750 of saving and investing potential.
  • You may be able to use the funds for health care continuation coverage, such as COBRA, if you lose your job.
  • When you die, your HSA can become your spouse’s HSA, tax-free.
  • There are no required minimum distributions for HSAs at age 70½, making tax planning easier.
Using an HSA for retirement savings

In addition to its other advantages, an HSA is a good retirement savings option, especially for high-income earners who can’t make deductible contributions to a traditional IRA or any contributions to a Roth IRA.

As with any investment, pay careful attention to risk. If you are 100% sure you will need the funds for health care, then low-risk, cash-like investments are best. But if you don’t need the funds or can pay expenses from other sources, allowing the HSA to grow, then the account can add to the growth and diversification of your portfolio.

One investment strategy that works well for an HSA is a three-bucket strategy. Each bucket has a different risk level for different time frames:

Bucket 1: Low-risk investments to cover one to two years of medical expenses, if needed. If you know you will need the money in a year or two, don’t take chances. Put your funds in low-risk investments.

Bucket 2: Low-to-medium-risk investments to act as a backup to Bucket 1 and used to replenish Bucket 1.

Bucket 3: Higher-risk, higher-growth investments. These funds are for use in 10 years or more, for example, for ordinary expenses in retirement or to cover things that Medicare doesn’t, including long-term care.

The three-bucket strategy in action

Here’s an example: Virginia and Jason Johnston are 40 years old. They have an HDHP with a deductible of $2,600 and make their maximum 2016 yearly contribution to an HSA of $6,750. They don’t have a lot of medical needs, even with two young kids, and decide on the following investment strategy:

(Note: Please consult with a professional before investing. Rates of return may vary, and loss of principal in buckets 2 and 3 is possible.)

Here’s how the Johnstons might use this approach:

In Year 1, they put $3,375 in Bucket 1 (to cover one to two years of health care expenses, if needed), $843 in Bucket 2 and $2,532 in Bucket 3.

After Year 1, each year they put 25% of their contributions in Bucket 2 and 75% in Bucket 3. If Bucket 1 is used up, it is replenished by contributions or from Bucket 2, and if Bucket 2 is used up, it is replenished by contributions or from Bucket 3.

Here’s an example of the growth potential: If the Johnstons make no distributions from any buckets (because they are able to pay medical expenses through other sources), the three buckets could potentially have more than $400,000 in 25 years, by the time they are 65:

(Note: Assumes a total of $6,750 contributed every year and yearly compounding.)

According to the Employee Benefit Research Institute, the cost of health care in retirement for a 65-year-old couple in poor health could easily top $300,000. If you have the need for long-term care, the costs can go even higher.

With health care costs rising, having access to a large sum that can be used tax-free for health care in retirement and for general retirement funding while paying ordinary income tax is a fantastic option.

It will take a little work to safely integrate a higher-risk HSA into your health care and retirement plan, but your 65-year-old self will thank you.

Mark Struthers, CFA, CFP, is a fee-only planner with Sona Financial in Chanhassen, Minnesota.

Home Depot to pull Scary Peeper Creeper Halloween decoration

Home Depot said the company would pull a Halloween decoration after a Canadian woman complained that the product bares a likeness too similar to a Peeping Tom and trivializes predatory behaviour against women, The Toronto Sun reported.

>> Read more trending stories  

Breanne Hunt-Wells told CBC News that the "Scary Peeper Creeper" decoration is "inappropriate and makes light of a real-life, sinister issue that women face in our society."

"I fail to see the humour in it," Hunt-Wells told CBC Radio's Metro Morning. "It makes light of a very serious crime. Voyeurism is a crime in Canada."

A description on Home Depot's website describes the item as "perfect for scaring friends and family during Halloween or any other time of the year" and a "realistic face (that) looks just like a real man is peering through the window at you."

Home Depot responded to criticism saying it is "currently in the process of removing this product from (its) assortment."

"We agree that this is not in line with our core values," Home Depot spokeswoman Emily DiCarlo said. "We've reached out to advise the customer of our actions and apologize. We're sorry for any offence that was caused."

>> Disney pulls controversial Maui costume from store

The move comes after Disney yanked a costume timed to the release of the movie "Moana." The costume, designed for boys, is based on Maui, a Polynesian ancestral figure to many Pacific Islanders. Critics found it culturally insensitive.

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