I'm trying to wrap my head around a tax scenario.

Let's say I have 100k per year of taxable income and my federal tax rate is 25%. My Iowa state tax rate is 9%, for a total of 34%.

If my retirement expenses are $30,000 per year, would I be paying income taxes at that $30,000 level? $30k, minus the standard deduction of around $12k, which would mean $18k taxable income? So that means a 10% federal rate and a 6% state tax rate at that point?

Adding in the 10% early withdrawal penalty, this would add up to 26% taxes at retirement? Does that 34% - 26% equal an automatic 8% return, just by using the money in the pre-tax account?

If that's the case, would it not make more sense to max out 401k contributions before paying any debts that are less than 8% interest?

Thanks for any and all replies.