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On The Ramsey Show – Highlights YouTube channel, Carrie called in to make sure she was on the right track to retiring early. Once she graduates from university, her career path allows her to retire a bit earlier than the average age.

Carrie is 20 and hopes to be able to to retire by 50. However when saving into pension, she is aware that there may be penalties for early withdrawal within the US tax system.

She wanted to know other options apart from her private pension and workplace pension, that she can invest into for retirement.

She explained that she wanted somewhere she can put her money and withdraw it at any age penalty-free.

Mr Ramsey said: “Good question, you’re really thinking ahead.

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As she aims to retire by 50, Mr Ramsey explained she could start a secondary investiging (investing in other places than her pension) when she is 30 and that will give her 20 years.

“For now use your 401K and Roth IRA [US pension vehicles] and let those beginning investments be growing tax-free. That is more important.”

As she aims to retire by 50, Mr Ramsey explained she could start secondary investiging when she is 30 and that will give her 20 years.

He said: “By 30 you could be 100 percent debt free, have an emergency fund and have a chunk of money because you would have been saving into your 401k for the past eight to ten years by then by 15 percent.

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“At this point, you can start investing in non-retirement mutual funds.” That is called bridge investing.

That is called bridge investing.

Mr Ramsey explained to Carrie that if she retires by 50, she will most likely do something else afterwards.

If she invests in mutual funds, she could put herself in a financial position where she has choices to do what she may wish to do without having to be penalised for early withdrawal.

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At 30, Dave suggested that she dial back her 401k contributions, and put more into mutual funds.

He said: “You got a really good start with 401k so I would crank up what you’re putting in just non 401k mutual finds and let them grow.

“You could look up and have $2million £165,000 or $3million (around 2,481,00) in your 401k and a $1million (around 827,000) in your non 401k by the time you got to 50.

“It depends on what your income is and how much you invest but those are very doable numbers.”

Dave Ramsey suggests his clients follow his ‘Baby Steps’ to save for emergencies, pay off all their debt for good, and build wealth.

The first step is to save an emergency fund as this will cover those unexpected life events people can’t plan for.

People don’t want to dig a deeper hole while you’re trying to work their way out of debt.

Baby step two focuses on paying off debts. People pay off the money they owe on their cars and credit cards.

People need to list all of their debts, except for their mortgage.

They are then directed to put them in order by balance from smallest to largest – regardless of interest rate and try to cut it down, he suggests.