The FTC targets noncompete clauses

Here are three of the week's top pieces of financial insight, gathered from around the web:

FTC targets noncompete clauses

Federal regulators have a plan to "raise wages and increase competition among businesses" by banning noncompete agreements, said Noam Scheiber in The New York Times. Such employment clauses, which prevent employees from leaving to work for a rival, now cover everyone from business consultants to nurses to fast-food workers. Studies show they make it harder for startups to challenge established companies, and they "hold down pay, because job switching is one of the more reliable ways of securing a raise." Proponents of banning non-competes say wages could increase $300 billion a year. The Federal Trade Commission has begun the process of public comment on the proposed rules, which could still be "vulnerable to legal challenges."

No protection for crypto accounts

Customers who deposited cryptocurrencies with Celsius Networks just learned a hard lesson about the importance of reading the fine print, said Crystal Kim in Axios. A judge in the crypto lender's bankruptcy case concluded that deposits in Celsius' Earn accounts belong to the company, not to account holders. Judge Martin Glenn ruled their contract "unambiguously transferred all right and title of digital assets to Celsius." The 600,000 Earn accounts Celsius had when it filed for Chapter 11 last summer held $4.2 billion in assets. Crypto investors who were earning interest of up to 18 percent may have thought their accounts were similar to accounts at a bank or brokerage. Wrong. They were, and remain, Celsius creditors, and "exactly how much they'll recover is the unknown," setting an ominous precedent for other crypto bankruptcies.

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The upside of the slump

"The 4 percent spending rule — or something close to it — is back," said Anne Tergesen in The Wall Street Journal, and that's good news for retirees. The standard advice used to be to spend up to 4 percent of savings in the first year of retirement, and raise withdrawals with inflation after that. A year ago, Morningstar researchers recommended cutting back to 3.3 percent. They said that with valuations high after a record-setting 2021, future returns were bound to be lower, so taking out 4 percent of inflated savings would deplete them too quickly. But now, after the S&P 500 fell nearly 20 percent in 2022, the outlook for returns is brighter. Morningstar says it's safe to withdraw 3.8 percent in the first year, which could "make retirement more feasible" for some.

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