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In looking back at some of your old posts, you indicated you were a Highly Compensated employee in 2008, which, at that time, was $105k. Assuming that you are still making at least that much and are single, you are actually already in the 24% bracket, and taking the 401(k) withdrawal all at once would push you completely through the 32% bracket and into the 35% bracket, so the numbers are even worse:

Taxes on $93k income (after taking the $12k standard deduction): $16,610
Taxes on $210k withdrawal:
$64,500 @ 24%: $15,480
$42,500 @ 32%: $13,600
$103,000 @ 35%: $36,500
Penalties @ 10% on $210,000: $21,000

Federal taxes and penalties on 401(k) withdrawal: $86,850

And that doesn't include any state taxes/penalties, which could be another $10k - $30k, if your state has an income tax and charges a penalty for early withdrawal.

AJ
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