Create a rule stating that if you loose your job you can withdraw a paycheck every two weeks from your 401k w/o penalty.

This last year I lost my job in the state of Mississippi. I applied for unemployment but was denied due to a clerical error. Even if I were approved the amount I would have received would not have covered my expenses. I was 1.5 months away from the birth of my first child and work in a very narrow field (Hydrographic Science). Meaning my options were limited geographically. I withdrew from my 401k to make ends meat until I could find a suitable job. Six months later I found one and everything is getting back to normal. Except that I couldn't even enjoy the tax benefit of my first child due to the 401k early withdraw penalties. I now owe 2,801 dollars to the US treasury. This does not seem right. It seems to like there should be some sort of hardship exemption.