How often do you have emergencies? Seems to me that if your life is going sideways, paying the penalty to get money out of your 401k would be worthwhile; but I expect that my life generally won't go sideways, so the extra percentage of income is more likely to be a benefit than the potential penalty is to be a detriment.

Even with the penalty and tax, it will be less than 50 percent, making it financially beneficial since the employer is matching 100 percent.

> What happens if you have an emergency?

You borrow from the 401K. If for some reason that's not an option, you take money out with a penalty, but with sufficient match you are still often ahead.