There are many, many ways to save for retirement, and not all of them involve stocks and bonds.
On the Money is a new monthly advice column written by Nicole Dieker, a personal finance expert who’s been writing about money for over a decade. For Vox’s Money Talks interview column, she’s written stories about couples who run small businesses, navigate different relationships with spending, handle health insurance, and more. If you want advice on spending, saving or investing — or any of the complicated emotions that may come up as you prepare to make big financial decisions — you can submit your question here. Here, we answer two questions asked by Vox readers, which have been edited and condensed.
How do normal people invest in the stock market? I tried a daytrading app, but the whole experience seemed like gambling. I also opened an E-Trade account, but I was paralyzed by the amount of data it offered me and I felt too scared to use it. Is there a “set it and forget it” way to invest a portion of my monthly income without having to micromanage a portfolio?
There is, in fact, a “set it and forget it” way to invest your money.
It’s called a target-date index fund.
These funds are specifically created to handle the risk management involved in long-term investing. Let’s say you plan to retire in 30 years. Any money you put in your target-date fund this year is likely to be allocated toward higher-risk, higher-reward investments — the FAANG stocks, for example — but as your retirement date inches closer, the target-date fund will automatically rebalance your portfolio until more of your money is in lower-risk, lower-return stocks and bonds.
Some people argue that target-date index funds are too expensive for the value they provide. This has to do with something called expense ratios, which I’m not going to get into right now because it looks like you’re the kind of person who wants to deal with as few numbers as possible. Instead, I’m going to tell you that the people who want “set it and forget it” but don’t want to pay the higher fees associated with target-date funds often choose total stock market index funds instead. These funds match the performance of the entire stock market, and if you’re the kind of person who believes that — despite occasional periods of volatility — the market will continue to trend upward over time, a total stock market fund could be your best bet.
Now that I’ve answered your questions about how to invest without micromanaging a portfolio, I want to go back to your initial question. The truth is that many normal people don’t invest in the stock market. Just under 40 percent of American adults haven’t invested any of their money, according to a May Gallup poll — which means that you can live a perfectly normal life without ever purchasing a stock or bond.
The real question is whether that’s the kind of life you want to live. You are fortunate to be in a position where you have extra financial resources, which often correlates with the decision to invest in the stock market — but it doesn’t have to. You can read the Gallup poll in full if you want to understand the relationship between income and investing, but you don’t really need a poll to tell you that the more money you earn, the more likely you are to invest a percentage of your money. That said, plenty of people have the money to invest and still choose not to.
What do they do instead?
Keep reading.
Are there other ways to save for retirement besides investing in stocks and bonds, or am I beholden to the black box that is Wall Street?
I am so glad you asked.
There are many, many ways to save for retirement, especially once you get past the idea that your retirement money has to be stashed into a tax-advantaged savings vehicle like an IRA or a 401(k).
If you are absolutely committed to the whole retirement account thing — the IRAs, the 401(k)s, the SEPs and Simples and Roths — you can always put money into those accounts without investing it in stocks and bonds. Some brokerages will automatically stash your retirement contributions in a money market account, which is technically an investment and can lose value, but other brokerages have started allowing you to put your contributions into high-yield savings accounts or CDs. All of these options earn interest and allow you to benefit from long-term compound growth.
Putting your money in an IRA or 401(k) without investing it could be a smart move for people who are wary about Wall Street but are still interested in racking up tax breaks as a freelancer or making the most out of a company match. It’s also a good move for people who need some way of locking their money up until they retire. If you know you won’t be able to resist the temptation to spend every penny you earn, putting your extra pennies into a tax-advantaged retirement account — after setting aside enough cash for an emergency fund, of course — is one way to solve the problem. Since these kinds of accounts charge taxes and penalties on most types of early withdrawals — with a few exceptions, of course (and a few more exceptions if you have a Roth IRA) — stashing your money in a tax-advantaged retirement account could incentivize you to keep it there until you retire.
But IRAs and 401(k)s aren’t the only way to save for retirement. You could also invest in your career. Part of your retirement fund could be spent on turning yourself into the kind of employee or freelancer whose name is on the top of every hiring list — which could yield the kind of earnings growth that beats even the best stock market returns.
Other people may want to take some of the money they would have saved for retirement and put it toward their debt. If you’re paying more in monthly interest charges than you’re earning on your investments, for example, it might be time to temporarily reprioritize.
You may also want to put a portion of your retirement fund toward real estate, especially if you are in the position to buy your forever home. If you can pay off your mortgage as quickly as possible, you’ll have more money left over every month, helping you maintain financial security and avoid debt — and if you combine stable housing with a frugal, debt-free lifestyle and a flexible, recession-proof career plan, you might be in a position to achieve financial independence.
Many of us won’t make it that far, but that doesn’t mean that our only other option is to put all of our money in the stock market. You get to choose where you invest — in your career, in your relationships, in your neighborhood, or in the long-term potential of the global economy.
Sixty-one percent of American adults, according to Gallup, are betting on Wall Street.
Best of luck.
Even after receiving backlash from fellow Republicans, the Florida governor is tripling down on the state’s controversial Black history standards.
Despite strong backlash from Democrats and fellow Republicans, Florida Gov. Ron DeSantis is tripling down on his state’s newly approved social studies curriculum guidelines that erroneously teach students that enslaved people “developed skills” that they could use for “personal benefit.”
Since news of the state’s new standards gained attention in mid-July, DeSantis has faced criticism — including from four of the five Black congressional Republicans, almost all of whom support former president Donald Trump for the Republican nomination.
“What slavery was really about was separating families, about mutilating humans and even raping their wives,” said Republican Sen. Tim Scott of South Carolina, who is also running for president. “It was just devastating. So I would hope that every person in our country — and certainly running for president — would appreciate that.”
But DeSantis is continuing to defend the standards. In a recent NBC interview this week, the governor stated that enslaved people “developed skills in spite of slavery, not because of slavery,” adding that “it was them showing resourcefulness and then using those skills once slavery ended.”
In the interview, DeSantis also defended the steps his administration has taken in the past year to overhaul various aspects of that state’s education system. “We’ve been involved in education, not indoctrination,” he said. “Those standards were not political at all.”
The controversy is the latest in a string of education-related fights for DeSantis, including the state’s rejection of the AP African American History course, the dismantling of the state’s tenure system, and the conservative takeover of the small New College of Florida. With each move, DeSantis has attempted to model what he would do nationally as president.
But his latest comments have spotlighted his rocky presidential campaign — his approval rating among Republican voters stands at 17 percent in a recent poll with Trump at 54 percent — and how his strategy to antagonize liberals and fight “wokeness” may be backfiring. The controversy also highlights the Republican Party’s sluggish gains among Black voters, who vote overwhelmingly Democratic, as it makes a rightward shift on race.
What’s in the standards and how they came to be
On July 19, Florida’s state board of education approved new standards for African American history for instruction in kindergarten through high school classrooms. The state organized a working group to update the state’s standards and ensure that they comply with HB 7, also known as the Stop WOKE (Stop the Wrongs to Our Kids and Employees) Act, which DeSantis signed into law in 2022 and states “classroom instruction and curriculum may not be used to indoctrinate or persuade students to a particular point of view inconsistent with the principles” contained in the law.
The 19 pages of standards are benchmarks that determine what knowledge students should be taught. The kindergarten through fourth grade standards require students to identify Black people who have had a “positive impact” in politics, art, invention, and other areas. Beginning in the fifth grade, students start to learn about slavery through lessons on the Underground Railroad.
In the sixth through eighth grade, teachers instruct about the slave trade and slave revolts, among other topics. They also learn about how slavery was codified in the law. In these sections, teachers are guided to create lessons about the jobs enslaved people performed, including tailoring, blacksmithing, and agricultural tasks, and how the skills they learned could be used for “personal benefit.”
The high school standards are the most extensive, guiding teachers to produce lessons on everything from key Black figures to Black people’s history of resistance and sacrifice.
Though Republican legislators and the state’s education commissioner celebrated the new standards, hundreds of teachers across the state, supported by education and civil rights advocacy groups, criticized them.
Broadly, critics have said the standards are “watered down” and “incomplete.” Andrew Spar, president of the Florida Education Association, told EducationWeek that the middle school standards don’t make “enough connections between the past and present.” More specifically, the high school standards don’t “dive into Florida’s efforts to keep segregation in place.”
Other critics told EducationWeek that new standards are limited in their coverage of ancient Africa, are missing key facts, and lack nuance, since they “mimic instruction of U.S. history with more Black faces and without critical thought and analysis of concepts that are more typically a part of African American history and African American studies courses.”
Ahead of the board of education’s vote, teachers demanded that the standards be tabled to allow for revision. “These new standards present only half the story and half the truth. When we name political figures who worked to end slavery but leave anyone who worked to keep slavery legal nameless, kids are forced to fill in the blanks for themselves,” said Carol Cleaver, an Escambia County science teacher, at a meeting in Orlando ahead of the vote, according to the Tampa Bay Times.
Two standards in particular garnered national outrage. Critics identified as problematic the section of the middle school standards that states “slaves developed skills which, in some instances, could be applied for their personal benefit.” In response to this standard, Vice President Harris flew down to Florida to deliver a speech, stating, “Adults know what slavery really involved. It involved rape. It involved torture. It involved taking a baby from their mother. It involved some of the worst examples of depriving people of humanity in our world.”
Critics also pointed to a section of the standards that highlights “acts of violence perpetrated against and by African Americans but is not limited to 1906 Atlanta Race Riot, 1919 Washington, D.C. Race Riot, 1920 Ocoee Massacre, 1921 Tulsa Massacre and the 1923 Rosewood Massacre.” According to critics, this standard whitewashes history and ignores the terror Black Americans faced.
DeSantis has continued to say that a group of Black scholars developed the standards. But as NBC reported, a majority of the members of the group did not support the most controversial elements that were approved.
What this means for the Republican Party
The standards are a natural extension of DeSantis’s legislation. The Florida governor signed the Stop WOKE Act, which limits discussions about race in the classroom and at work. The law was written to ensure that white people don’t feel guilt, shame, or psychological distress about racism.
The standards — and DeSantis’s insistence on defending the lesson on how enslaved people gained skills to their “personal benefit” — are an example of what that law looks like in practice.
This time, the standards went too far for some Black Republicans. “Slavery was not CTE! Nothing about that 400 years of evil was a ‘net benefit’ to my ancestors,” tweeted Rep. John James, a Michigan Republican, referring to the acronym for career and technical education.
But in the party overall, Republican leaders have moved right on race, aligning with far-right figures who reject the idea that minority groups face structural bias. Political scientists who studied voters in the 2016 and 2020 elections in one study determined that the strongest predictor of who voted for Donald Trump was the belief that systemic racism is not a factor in American society. The second strongest predictor was the belief that women don’t face systemic bias.
Donald Trump, the current frontrunner, sat down for dinner with white supremacist Nick Fuentes in November. A number of Republican House members, including Rep. Marjorie Taylor Greene, spoke at a white supremacist gathering where attendees chanted “Putin!” Sen. Tommy Tuberville repeatedly refused to denounce white supremacists, calling them “Americans” instead. (After multiple interviews, he made a short statement that “white nationalists are racists.”) Rep. Eli Crane of Arizona called Black people “colored people” on the House floor in July. (Crane says he “misspoke.”)
Other Republicans have dismissed racism. Though Scott rebuked DeSantis for his comments, the senator has repeatedly argued that racism is no longer a problem in America. During a June Fox News Town Hall, he said, “When I hear people telling me that America is a racist nation, I got to say: Not my America, not our America” — a statement he made despite having spoken extensively in the past about the racism he has faced, including repeatedly being pulled over for traffic stops by the police. Scott was pulled over seven times in one year.
Presented with Scott’s statement during the NBC interview, DeSantis responded, saying, “Don’t take that side of Kamala Harris against the state of Florida. Don’t indulge those lies.”
During her trip to Florida, the vice president said she was there to denounce “extremists” who were forcing “propaganda” onto Florida students.
DeSantis then invited Harris to debate the standards. Harris replied: “There is no roundtable, no lecture, no invitation we will accept to debate an undeniable fact: There were no redeeming qualities of slavery.”
At least 41 people are believed to have died after a boat capsized off of Italy this month.
Less than two months after one of the deadliest shipwrecks in decades, a new shipwreck off the coast of Italy this past week has left 41 migrants feared dead.
Four survivors of the shipwreck told Italian authorities that the boat they were on was originally carrying 45 people before it capsized during the journey, according to ANSA, an Italian news service. The boat reportedly set off on August 3 from Sfax, a city on the Tunisian coast, which has become one of the main departure points for migrants seeking to reach Europe. The surviving passengers were from Ivory Coast and Guinea, according to aid officials.
The tragic incident adds to hundreds of migrant deaths via shipwreck in the last year — as the number of people seeking asylum in Europe after being forced to flee conflict and poverty in their home countries grows. Off the coast of Greece in June, as many as 700 migrants may have died at sea.
About 121,000 people have arrived by sea to Europe as of August 6, according to the United Nations International Organization for Migration (IOM). This is high for recent years — though all crossings into Europe declined during the Covid-19 pandemic — but remains below the more than 1 million refugees who attempted to reach Europe by sea in 2015.
Fatalities and missing persons in the Mediterranean Sea — a route that’s typically used to go from North Africa to Europe — have nearly doubled compared to last year, climbing higher than 1,800 people, according to IOM. (More than 2,300 migrants in total have died or gone missing on the way to Europe so far in 2023; for all of 2016, more than 5,000 people perished or disappeared.) The recent uptick is due to a host of factors, including a surge in migrants from Libya and Tunisia to Italy; traffickers putting people on unstable iron vessels; and insufficient resources dedicated to rescue efforts by European governments.
Ultimately, many migrants are choosing this risky avenue because of the limited legal pathways available to them in order to otherwise immigrate to Italy and other EU countries. The journey across the Mediterranean is considered one of the most dangerous in the world, according to the UN’s International Organization for Migration.
“As the EU has increasingly closed off established … migration travel routes to the community and countries that were once fairly generous in accepting asylum and refugees, [like] Sweden, become less welcoming, potential migrants have been diverted into ever more dangerous routes by which to try to gain entry into Europe,” Anthony Messina, a Trinity College political science professor that studies migration policy, told Vox. “The consequences have been more perilous journeys and, inevitably, more migrant deaths.”
At the same time, the European Union has struggled to put forth a coherent immigration policy that offers legal pathways for migrants and instead many countries have focused on proposals aimed at strengthening their borders. There have been disputes, too, over which countries need to allocate resources for rescue efforts, leading some, including Greece, to abandon this responsibility in certain instances. Among countries like Greece and Italy, which receive a larger number of migrants by sea, there’s also been frustration that other European countries haven’t chipped in to help shoulder the financial and structural demands. Collectively, these issues have contributed to a dearth of support for potential rescues and few safe channels for migrants to consider.
“The devastating rise in deaths in the Mediterranean is not simply down to more people making crossings,” says Josie Naughton, the head of a UK-based nonprofit called Choose Love dedicated to providing refugee aid. “The culpability lies with policies that by design — such as the criminalization of rescue boats — deny that every human life is worth saving.”
Why Europe’s immigration policy is failing migrants
A big reason more migrants are using this dangerous route along the Mediterranean Sea is because it’s the main option available to them. “Investing in legal pathways … is the only sustainable solution to save lives,” EU Home Commissioner Ylva Johansson said at a press conference earlier this year.
The EU has struggled to find a balanced and humane approach to migration, since 2015 and 2016, when Europe saw a record number of arrivals from places like Syria and other parts of the Middle East and Africa. Some countries warmly welcomed refugees at first, but it did not last, especially as far-right parties fed a populist backlash.
EU asylum-seekers must typically apply for asylum in the “first safe” country they reach, which often means countries on the EU’s land and sea edges — Italy and Greece, but also places like Poland. Those countries tend to see many more arrivals, and often argue they do not have the resources to accept so many people. Some of the countries on the EU’s borders have sought to tighten restrictions and enforcement, at times illegally pushing back migrants. These same border countries have also accused some inland countries of forcing the costs of providing support and processing those arrivals onto them, while offering no other solution. (The exception to these variations and political hesitance has been for Ukrainian arrivals, for whom the EU adopted special emergency rules.)
“Despite years of effort in trying to forge a common immigration and asylum policy, the EU is still far short of achieving this objective,” Messina told Vox. “Current immigration policy across the EU is still mostly within the policymaking jurisdiction and purview of national governments, which results in uneven and often haphazard approaches to addressing the thorny challenges of irregular migration and mass immigration generally.”
EU countries also have uneven approaches when it comes to how committed they are to rescuing migrants at sea, another factor that likely contributes to fatalities. One New York Times report, for example, examined a video which showed Greece abandoning migrants at sea. And earlier this year, Greece claimed that a boat carrying hundreds of migrants steadily declined aid until shortly before sinking later in the day.
“It is deeply alarming and disappointing that EU countries are trying to abdicate to their duties to rescue people in distress at sea under international law,” a Human Rights Watch spokesperson previously told CNN.
But, ultimately, the EU would prefer if migrants did not attempt to come at all.
In mid-July, the EU and Tunisia inked a deal to try to shrink the numbers of people attempting to cross from North Africa into Europe. The agreement had a lot of nice-sounding things — EU investments in trade and support for a green energy transition, for example.
Yet it was pretty straightforward: the EU was about to give Tunisia a lot of money to increase security along its sea borders and derail the smuggler networks. “In exchange for one billion euros, Tunisia is now supposed to become a new border guard for the EU,” explained EU migration experts Sarah Wolff and Florian Trauner in a recent blog post.
Europe has made similar deals, with Turkey, in 2016, and Libya, offering billions in economic aid in exchange for these countries to stop or intercept migrants. Sea crossings to Europe are undeniably dangerous, but these deals often outsource migration enforcement to countries with questionable human rights records. In Libya, in particular, human rights groups have documented an astonishing record of abuses in migrant detention centers, including torture, killings, and sexual assault. The UN has found evidence of migrants being forcibly repatriated, an alarming departure from human and asylum-rights protections.
Tunisia is the latest troubling example of the EU’s questionable bargain. The country is a place in the region people migrate to, and a place people are trying to escape from. Tunisian President Kais Saied has been aggressively unraveling his country’s democracy in recent years, and has implemented overtly racist policies against sub-Saharan Africans, which has hastened their exodus from Tunisia. “The decision shows no lessons have been learned from previous similar agreements. This makes the European Union complicit in the suffering that will inevitably result,” Amnesty International said in a statement after the Tunisia deal.
Part of the problem is the EU is still grappling with how to reform and remake its own “migration pact.” Most recently, the EU is trying to strike a somewhat middle ground. Border states would institute stricter border policies, especially for those people unlikely to be eligible for asylum, while also more speedily rejecting these applicants. Other countries would have to either agree to accept a certain number of asylum-seekers, or they would pay into a joint fund.
The deal hasn’t been finalized, and political disagreements on certain measures remain. But many advocates point out that this may appease internal EU politics — especially the far-right governments, like those in Italy — but it doesn’t at all address the humanitarian and human rights concerns around those seeking to cross to the EU. Nothing about these rules will stop people dying in the Mediterranean.
And it’s not clear what will. Even if Tunisia can curtail the number of boats leaving, it may come with unintended and equally troubling humanitarian costs. The politics of migration in Europe are only going to get more difficult as European parliament elections approach next year, where a populist and generally more Euro-skeptic far-right could use migration to try to more broadly reshape the EU. As that plays out, thousands and thousands of migrants may still see their only option as a perilous sea crossing.