Should I Pay Down My Mortgage Or Save For Retirement? 

I'm so grateful to know as much as I do at 36. Debt free,maxing my retirement and my mortgage will be paid off in 4 years. I came from nothing and my parents are living off the government. Im changing my family tree.

I just some random guy on the internet but the best way to financial security in retirement is to have a paid for home and zero payments. Then you can live on a low monthly income if required. There are very few guaranteed investments. Paying if your debt is 100% guaranteed to return your investment.

I literally have people call me to take money out of their homes to buy speculative investments. It’s the worst idea in the world and I always tell my clients that . Your house is not a piggy bank to invest with. It is the roof over your head

I pushed to pay off my mortgage 3 years ago, i am so thankful i did. I have one less thing to worry about now.

If I'm 59 and broke I'm scared sh*tless that I won't ever be able to retire, yet it sounds like he's not sure he wants to sacrifice. Life everything in life, pay now or pay later, but you always pay.

I'm debt-free, mortgage paid off and a good portion of my money after paying bills (less than $1200 monthly) goes towards retirement (15 years to go to retire at 62, although I prefer 60, will see). It's peace of mind right now which is priceless.

I love how Dave never considers tax. I am a believer in his teachings. A guy making 140k will pay at least 45k with all the taxes. Income, property sales, etc

I enjoy watching daves videos but i would like to know what is the value he puts on life itself? I watched my parents scrimp and save so they could pay off all thier debts and thier mortgage early, retire and enjoy traveling the us, only to watch my mother die from cancer at the early age of 52yrs old. Insurance paid most of the cost but it still consumed a lot of thier savings. The facts are that many people will live like a pauper so they may enjoy retirement only to die early. Never having the opportunity to fully enjoy life. I believe you have to find a happy medium between savings, living debt free and also enjoying life. We are only here for a short while, enjoy life while you can.

Live way below your means. Key.

Doctor: how do you feel after triple bypass surgery? Dave: better than I deserve

Ramsey just outlined a new successful life plan for this guy, and the only thing he can focus on and is hung up on is " you really want me to cut up my credit card? Buts it's only 2%?!"

You know, in his defense, there are some of us who didn't know the concept of paying more than the payment on things. So, he sees that he has to pay for the full 30 years. Once he starts seeing how it will shorten that mortgage, I think he will get more focused!

What strange talk if this... to "pay down my mortgage"? Having any kind of mortgage doesn't help retirement. Paying off your mortgage is saving for retirement.

He didn't factor in income tax and other deductions. They're not taking home $145k.

Dave is coming to my church in Texas!! So excited to hear him speak live, and partake in the FPU church small group!!

Dave: Pay mortgage and save for retirement Next caller...

He is focused on the rates and ignoring the risks of staying in debt. The risk factor is often ignored.

Probably should do both but maybe lean more on the retirement side. I recommend to other teachers to not retire until you paid your house off.

Dave, I kicked everyone else out of the house but Uncle Sam - he won't leave.

You need to be on beans and rice right now😂😂 Its true but it made me laugh like crazy.

I did both concurrently. Maxed out retirement plans then put anything extra towards mortgage. I didn't want to lose x number of years of retirement savings opportunity by focusing only on the mortgage first. The retirement accounts also ended up earning more on an annual average than my mortgage's interest rate.

What’s wrong with rice and beans…some fried sardines on the side and life is good…Love Dave’s no BS personality…

This caller has me confused, I hope he got the message. Whew!

So many people are shortsighted and have the mentality of paying only their mortgage minimum when they can pay more.

Most people are terrible with their money. The more they make the more they spend. When I started making serious money I did not increase my spending, I saved and bought my car with cash. Stay away from credit cards and refinancing. My business partner is in debt and needs more money. New cars, bigger house, traveling to Jamaica, wife buys jewelry and shoes... yet we have the same salaries. It’s only math, not rocket science! But at the end of the day it’s up to you and your own ego and greed that’s your biggest enemy.

Why doesnt dave calculate tax ? I make 100k a year After tax, health insurance, 6% 401k, its $2447 biweekly. $63,622 a year Not 100k....

People making 225%+ what I make and having problems that friends of mine are managing in 4 years or less with even slightly less income than me...smh

Everyone over at the Dave Ramsey show, just would like to say love your work I'm 19 years old from Melbourne, Australia and been listening to Dave since I was 17. Unfortunately cant call in from down under :(. Thankyou Dave for the financial advice. Its embedded in me.

I’m 17. I make £4.35 an hour since April but £4.20 before that (not including about £90 commission a month) and I’m only guaranteed to work 5 hours a week. From my first job, that I’ve been currently working for just over a year, I’ve managed to save £2,600 whilst still enjoying my money and contributing to supporting myself. This has been from working loads of extra hours and getting myself some side hustles.

I think the hardest part is letting go of the money even though you have the money to pay off the 5k.... I used to think that I could pay half and have half to spend... Then... When I paid off that debt...I realized I'm in a much better place even tho I just paid a huge chunk of cash

Dave never takes in account income taxes. Guy makes $150k. Dave thinks if he pays $50k on the house he will have $100k left but that’s not true. At that income level income taxes are pretty high. Net is closer to $95k. After $50k paid on the house and $20k saved in retirement fund he’s got $25k for two people to live on.

You forgetting, $140,000 is not completely free Everyday lif expenses Health bills Taxes Insurance Home/car maintenance Helping out grand kids 140 Is probably 60k free Money comes and goes fast. Do what you can do. Hes right, pay off that debt

The caller’s thinking is confused.

But Dave... what about taxes?? Theirs fed, state, local, property taxes. $145k is probably $80 to 90k after taxes.

Does everyone who calls in talk in take home numbers or does Dave just forget that income gets taxed?

Love when Dave goes tough love mode 😂

How do 60 year old men not know this basic stuff?

Don’t forget about income tax Davey... They don’t take home $145k per year.

Im sorry, but i have learned that only about 60% of what Dave says is correct. He is wrong in this call. He states that caller should live off of 90k and pay 50k towards debt out of his almost 146k salary. THERE is NOT 90k left. 146k MINUS 30% in deduction's ( fed, state, fica, social security, insurance, etc) only leaves you 102k....NOW if you pay 50k in mortgage YOUR ONLY left with 52k which is very difficult for avg fam of 4, a mortgage, medical and LIFE.

I'm fortunate to be doing well right now but I live in a very expensive area. I bought a small apartment that was very affordable and I'm very content living below my means. There are many benefits but there's always people asking when I'm going to move, get a bigger place, ect. Questions like don't you want more? Well sure, but I don't need the extra space yet. My gf and I live in a 585 sq. ft. apartment. It's plenty. If we start a family then of course more space will be needed. My point is living happily below your means can feel/be a blessing. Give it a try and tune out the keeping up with the Joneses nonsense.

Never let yourself be in this mess at this age.

Sitting here feeling like I've missed out because I only found DR when I was 29. Then I seen this. Never too late to start, but that isn't an excuse to put it back either - once you know the baby steps, you are throwing away your growth potential = aka money if you ignore it.

Ha! I’m on beans and rice and hadn’t listened to this video yet! Ahhaha

I love Dave, have read his books, been through Financial Peace University, etc...but it's just super hard for me to get on-board with plowing money into paying off a low interest, tax-deductible mortgage EARLY. In 15 years? Absolutely. In this callers case?? I wouldn't. He's got 40k for retirement and he's already 59. As for the stock market..it's NOT "timing the market" that makes the difference...it's "time IN the market". 4 years of additional "time IN the market" could potentially be huge when that 4 year span is 15 years down the road. I'm 51 and have zero debt outside my mortgage (which is well within my means). I'm trying to get 20-30% of my household income into retirement. I could pay more towards the house but I feel like the return on that money has more upside in the market than it has by shortening my mortgage payback. If I were in my 20's or 30's, yeah....pay off the house and you still have a couple of decades to plow money into the market, but at 59?? Not sure I could do that. I've found a mortgage calculator that provides you the exact amount of additional principle payment necessary to pay off your mortgage in whatever future date you wish. So, I'm shooting for having my loan paid off at my age 60 (about 14 years early on a 30 yr) but I don't see as much value in paying it off in say....the next 5 years, if that comes as the expense of additional funds into the market.

THE SOONER YOU PAY OFF YOUR MORTGAGE: THE BETTER. Same goes for your Student loans, car loans and any other loan.

As someone who has had problem with maintaining a steady income, retirement has come. So without the $950 month rent payment? At least I have NO credit card debt. But I do have enough income to buy a car. The present wife is still one of those if you gots money spend it before you die.

Depends on your APR

3:42 TODAY... haha this callers funny 6k in the bank, 5k credit card, "but its ONLY 2.99"

NO ONE STATES INCOME AFTER TAXES. THIS IS NONSENSE. I like Ramsey but that 145k is NOT 145k. Such nonsense. It’s like 60% of that. Shut up!!!!!!

I'm almost 56 on BS2. I won't be able to afford 15% investing AND payoff house as fast as I want to (by age 65). Yes, I made stupid financial decisions in my early years. 😣

How about the 20% taxes he's paying

I'm 21 and I feel like I am behind the curveball. I don't wish problems upon others but these calls make me feel like I'm doing okay.

Why is DR forgetting fed+state income taxes?

We're throwing 2k/mo at our 1300/mo mortgage. Hope to have it paid off when I'm 55.

Dave was spot on for the advice (setting aside the taxes aspect) but you could tell dude on the phone was listening just to argue. Clearly they muted the guy.

If you don’t have your house paid for retirement is going to be hard.

I never thought about prioritizing the mortgage payoff after eliminating all the other debt honestly. I'm warming up to it, but I feel investing should be done as well.

Dave always forgets about taxes when he blurts out his numbers....

Please give Grace DR Grace... we all at different levels in our finacial journey. People want to be heard even when seeking advice. God bless you Sir in your gifting and Purpose

Dave is a Boss.

Once you realize how much you Home is REALLY costing you with the interest you’re paying, you will want to pay it off ASAP. I’m tired of people saying, “but the interest rates are the lowest they’ve been in years...”. Check out a mortgage calculator ( like on bankrate.com) and look at the actual interest amount you’ll pay

pay off mortgage or save for retirement? Let's do both! *smacks the computer monitor with a bud light bottle"

You can hear the defeatist tone in his voice talking about 82 years old. Dave went Tony Robbins on him radically interrupting his frame of thought.

Why does everyone talk about the gross salary rather than the net? That cannot be overlooked. That's a major difference in the bottom line.

No it doesn’t work like that Dave! He’s at $145 pre tax, he’s got property tax, home insurance, HOA, utilities, car payment and insurance, and credit card for food and groceries, and don’t forget his wife’s car payment and insurance, maybe his got kids expenses too. IT ALL ADDS UP AMIGO! Now to save 20k to 30k / year everyone has to be on the same page with pork and beans, and it still may not work due to medical expenses since he’s at 59 years old. So let’s factor in everything including UNCLE SAM. But I still love you man.

This guy is awesome and strictest 💯

Why does Dave not take taxes into consideration? I live in NY I make 92k but I take home about $65k after taxes and deductions for health savings. Anybody else have this problem?

The only problem I have is his investment assumptions. Very difficult to make those kind of returns.

Savage..I'm scared to call 😁

I don’t understand how we’re doing math on how much money we make and can invest without factoring in taxes? You make $140k. Not true. They have to be paying at least 20% in taxes. Glad we glaze right over that though.

If you make $40,000 per year from age 25 to 65 for 40 years and never get a raise in pay because nobody likes you .... that’s $1.6 Million after 40 years. The challenge is .... how much of that $1.4 Million can you keep and how much will you give away?

Let's see, liquidate my brokerage account and pay off my house now? Or refinance the house to a 15 year 2 3/8% tax deductible fixed rate mortgage? Dave would probably say pay off the house. I'm getting the cheap money to work for me.

Anyone know if Dave ever goes off track and advises some tweaked version of the baby steps? It's the same advice all the time but people who call up want to change it lol

A lot of people don’t think about this stuff early on and end up like this guy. I specifically speaking about the house. If you’re 45 plus, don’t get a 30 year mortgage, get a 15 year or you will be working until your 75/80.

Why does Dave not factor in taxes 😂😂😂

Some people make things so complicated...

Wait, he makes a $140k a year and it takes him that long to paid off a $200k? The question is "what's he doing with his income?"

We all have an uncle we have never met, and his name is Uncle Sam. How come Dave never mentions him, or factors him in the equation?

Lolz "you gotta love on A TIGHT budget of 90k". Without kids who thinks 90k is A TIGHT budget? I'll admit I didn't save anything before I did FPU maybe a few hundred a month now I save $1600/month making 58k/yr and still being a bit frivolous. FPU works so well

"that has not worked for anyone" Meet Kevin left the chat

I get not all people are money savy. However!! It bothers me when I see people make so much money and dont have anything to show for it. I'm so good with money, I just dont make as much.. hahaha

Dave gives pretty good advice but I certainly don’t agree with everything he says. He forgot about taxes. That is a killer and what I tell my clients to get them to understand. I get people bragging that they have a million bucks in their 401k. So what the don’t get is it really isn’t a million and you get the leftovers. The investment firm is going to charge you at least 2-4% EVERY YEAR, then if the market crashes you lose a bunch of it, then there can up to 17 fees in a 401k and finally the part Dave forgets “TAXES.” Oh and if you get sick and have to pullout money before 59.5 you lose another 10% in fees to YOUR MONEY! So someone with a million dollars in their retirement on paper has more like around $500,000. At 65 if you stretched it you would have $25,000 a year to live on for 20 years and broke at age 85. Sure there is SS, but that is not guaranteed these days and that system is in the hole. Like Dave said pay down debt, live a little so you can enjoy some life and make memories to always be with you and get yourself into a tax free retirement.

Dave is providing a real service here lol

for example..if you owe $5k at 3% I would prefer to hold on to my $5k cash than pay down the 5k

Got rid of debt by sticking to the plan. Got my own plan free. Pay yourself first

$140K MINUS income tax???????

The 2 -4 -6 -8 on the 1492 file.. I don’t know all these documents and numbers he speaks of 😂 Good call though!

Depends on age. 59 pay mortgage and also save, I did both at the same time. Dave also deals with gross income not take home.

When you are older you have to consider that interest saved on the mortgage is an instant return and a sure thing. While the return if that was invested has both added risk and a much longer time horizon. But for under 50, the investment will have time to eclipse the mortgage interest savings and you are more likely to be able to take advantage of the tax deduction.

Taxes are about 20% of a budget (FICA, Sales Tax, Property Tax, Federal Income Tax, State Tax, Poop Tax).

This guy clearly has his own ideas and is going Dave'ish.

Beans , rice lol

I like Dave- I agree with him. But often he forgets about taxes. 140k for a couple is more like 90-100k post tax

How many of you knew the answer before you watched the video? Show of hands.

I totally get what Dave is saying, like in risk terms why you wouldnt want to borrow on your house to invest in index funds, because if you lose your job the mortgage doesnt go away. Is that the only reason though? Because over a long term average stocks return about 10% (ignoring inflation). Mortgage interest is low at 2-3% (again ignoring inflation). So hypothetically speaking, if you can afford to meet the interest payments on the mortgage over a 30 year period, you would make far more than those interest payments from investing in the S&P 500 for example. Would appreciate the reasoning on why this would be a bad idea.

What about taxes on $145K take home pay? That makes it considerable less money that he has to work with.

I am currently 28 and will be debt free except the house in a year. Trying to figure out how aggressive to get with paying the house down.

THEN IN 5 YRS THE IRS TAKES EVERYTHING BC HE NEVER INCLUDES TAXES.

Always live below your means

hes not gonna pay off the credit card