If you have sizeable debt and are forced to take an early withdrawal from your 401K or retirement fund why are you penalized for money you don’t already have?
If you have legal fees or credit card debt and have to take an early withdrawal to get out of the financial hole you are in then the government shouldn’t be able to make it harder on you.
The government taxes or penalizes us in every situation. How is it not double taxation to tax government assistance in time of need with money that is generated from taxes?