Dave Ramsey, 58, explains whether to use savings to pay off mortgage or pay into retirement | Personal Finance | Finance

On The Ramsey Show – Highlights YouTube channel, American personal finance personality John, 58 guides him through his complicated situation. John didn’t believe he could retire in his current financial position, so he sought advice from a financial expert.

John explained that he and his wife have no debt other than their house, which will be paid off in the next ten years.

They refinanced their home, but didn’t want to settle for less.

At the time, their home was worth $230,000 (about £184,000) in shares as the market in his hometown exploded.

He wanted to liquidate the property so he could get the money.

read more: Inheritance tax: A ‘common risk’ costing you thousands – steps to avoid it

By this time the market was down and he was worried about getting less than his home was worth.

John said: “We are very concerned about our twilight years.

“This is the only thing we have and can look forward to.

“I have a small 401k [a US workplace pension] But that’s really nothing to brag about.

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He stopped paying an extra $200 (about £160) on his mortgage each month and asked if he wanted to put that money towards retirement.

However, Mr Ramsay assured John that he had enough time to do both.

He explained that John had five years to get his house and build a nest egg (retirement fund): that’s what one needs for a “solid retirement,” according to the expert.

Mr Ramsey added: “So you have to aim for that. It’s not going to be an extra $200 (around £160) every month, it’s going to be more than that.

“You should put at least 15 percent of your income into retirement.”

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