The 20% is not a tax fee; it is withholding. If 20% is withheld, that can be enough to cover the ordinary income tax you will owe on the withdrawal. However, it is usually not enough to cover the tax and penalty. If you are under 59.5 years old when you take the distribution, you will owe an additional 10% penalty.
You say you are in a 12% tax bracket, but keep in mind that the additional income (the before tax gross amount) may bump you up to a higher tax bracket.
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