#401k . I am planning to move back to India in 5 years. I am seeking suggestions for 401k investment suggestions i.e Roth or traditional IRA. And i get to choose like where would I want to invest my money on. Like dow jones or specific stocks etc.. how do i have a diversified investment there to have better returns ? Tc 130 yoe 1
Kinda off-topic but why do you want to leave the US?
You are not moving back ever!
Family reasons. For sure i will go back. But i am interested in knowing the pros and cons of the two options i have
Lol. You're not going back. How about a $100 bet on it?
Sure. I am a stubborn guy you will ever meet in your lifetime. I am up for it .
Buy ETFs. Roth IRA would allow you to gain and pay no taxes later but only if it is qualified Roth IRA, meaning you reported it to IRS. This means that as long as you file tax after opening Roth IRA and before going back to India you should be fine. If you do anything other than this, you’ll pay double tax.
You can check out any time you like, But you can never leave Welcome to Hotel California!!
Traditional IRA. Pay no taxes today(save at near top rates) and withdraw less than standard deduction every year for a 2-3 years after moving back
Google for Roth ladder strategy. You can avoid the 10% penalty while doing a premature 401k withdrawal. If you pass the RNOR test u can bring in overseas income for up to 3 years into India. On the other hand US will tax you as nonresident alien which means the taxes on withdrawal is more n there is no applicable standard deduction (~24k) n personal exemption (4K).
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