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Note that if you are unemployed and have no other taxable income in the current tax year, the income tax rate on $15K is likely to be low. Hence, the 10% penalty is not a large bite.

The Federal 10% penalty is a 10% penalty, no matter what the marginal tax rate is. In addition, CA levies a 2.5% penalty on early withdrawals, so that bumps the total penalty up to 12.5%

On $15k, the Federal and CA penalties will total $1,875. For a single filer, with a $3,800 exemption and a $5,950 standard deduction in 2012, the marginal tax will be another $525. Assuming CA takes another $100 or so, that's a total bill of $2,500, or about a 17% hit - over 2/3 of which is the penalty.

The problem comes if the OP is using the 401(k)/IRA money to supplement other income (possibly from a spoouse or other employment) and is already in 25% or 28% Federal bracket, and a 9.3% CA bracket. In that case, the total taxes and penalties would be 46.8% - 49.8% of the withdrawal. So, from a $15k withdrawal, after taxes and penalties, the OP would only end up with $7.5k - $8k in spendable income.

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