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I am 65 and retired living comfortably off pension and SS. Have small IRA's ($Total about 30,000)for discretionary spending. My plan is to use 401K to offset inflation after 5 years of retirement (age 67) and pension reduction (8%) for 100% J&S option. 401K money is in 6.33% Fixed Income fund.

I am thinking about taking 6% per month (without touching principal)out of 401K to pay off small Home Equity Loan early to give me more spending money out of monthly income. This would mean about $150 a month less to be taken out of 401K at age 67 assuming 6.33% interest. The Home Equity loan would be repaid before I turn 67.

Is this a bad idea? Why?

Foolish Bob

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