Extra woes for new college grads

Here are three of the week's top pieces of financial insight, gathered from around the web: IS THE 4 PERCENT RULE TOO STRICT? The man who invented the "4 percent rule" has

updated the numbers, said Brett Arends at MarketWatch. In 1994, Bill Bengen, a financial adviser in Southern California, established the principle that "if you want to make sure your

retirement savings last at least as long as you do, you should budget to spend no more than 4 percent of the balance in the first year — and then adjust the amount each year in line with

inflation." But Bengen now says that this rule of thumb is too simplistic. He devised it as a hypothetical for someone retiring in October 1968, "the worst moment he could find in

modern times," just before a 14-year bear market and runaway inflation. Historically, however, "the average safe withdrawal rate has turned out to be 7 percent." Bengen, a

retiree himself, said he sticks to a withdrawal rate of 5 percent. SUBSCRIBE TO THE WEEK Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

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From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox. EXTRA WOES FOR NEW COLLEGE GRADS Recent college graduates are

facing bleak employment prospects, said Craig Torres at Bloomberg. "The unemployment rate for young people ages 20 to 24 was 12.5 percent in September, highest among adults." Young

workers are typically hit hard during a downturn, but this time is different. The unemployment rate for recent college graduates peaked at 13 percent during the last recession, but job

seekers were at least able to build in-person connections. During the pandemic, however, even interviewing in person is more complicated, which could hurt the prospects of young people up

against more-seasoned candidates. "Employment rates for those who graduated college in the aftermath of the 2008 financial crisis remained significantly lower" and salaries

remained depressed. MARKETS FALL IN LOVE WITH ELECTRIC CARS What's driving the stock market frenzy around electric-car startups? asked Eliot Brown at The Wall Street Journal. Despite

never having sold a vehicle, companies such as Hyliion, Fisker, and Lordstown Motors are "valued at more than $3 billion apiece by investors" hoping to catch the next Tesla. Never

before have "so many companies with no revenue pursued public listings at such high valuations." Many are going public by merging with blank-check companies, thus avoiding the

scrutiny that normally goes along with an initial public offering. Also fueling the market euphoria is the belief that "regulations in some countries and California" are creating a

new market for EVs that older automakers have been slow to embrace. A free daily email with the biggest news stories of the day – and the best features from TheWeek.com This article was

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