401k / Traditional IRA / ROTH IRA - Will go back to India in 5 years permanently?

I am 30 years old working in California and would like to make some good investment. I will be going back to my home country India for good in next 5 years. In this case does using 401k/Traditional IRA/Roth IRA help? Each of these seems to allow taking money only after 60years. If I take before that I will end up paying tax and also penalty. I would like to take most of my money when I go back in 5 years. My company has 401k plan but they do not match my contributions. Please advice..

How about about several short and long term CD's (certificates of deposit) with banks that pay the most?

YOUR COMPANY SUCKS! YOU WILL GO BACK BROKE!

These investment vehicles are certainly not for you. I'd highly recommending investing your money in an index fund, for multiple reason which I won't go in to, but will source below.

Best of luck.

You may want to read more in the tax deffered investment and you can do the fund management yourselfd such as " Self Direct IRA " or there were many other options that you need to explore!

Then five years from now, you can freely draw and reinvest when, where, what, why and how yourlself and you even can decide what to make profit once you are good at what you doing.

Keep in mind follow the rule strickly, but learn to use the rule to work to your advantage, then you would have much save investement and happy long prosperity life.

I help people, becasue people help me before. Let hear more!

The short answer is no you don't want to use one of these tax deferred savings plans if you plan to take out the money in 5 years. If you put money into a 401k - typically you will "break even" with a similiar investment out side of a 401k (ie same mutual fund for example).in about 7-8 years. So if you said you plan to return to India in 15 years - then a 401k etc would make sense even after paying the penalty for early withdrawal. This is even more true since your company does not provide a 401k match.

Based on the information you provided, it is probably NOT a prudent idea to invest your money in a 401k plan (especially while not getting any company match money).

Since you signaled that you will be withdrawing the money in about 5 years (still putting you well under 59.5 years of age) you are going to be penalized 10% on the money you take out. Also, you are going to add all of that money to your income for that 5th year and will probably push yourself into a higher marginal tax bracket. It is most likely better for you to spread out the taxes over the 5 years (it ultimately depends on how much you plan on saving each year) than to take that one lump sum hit.

The penalty itself can end up ruining any gains you have from tax-deferrment now anyway.

401k plans are used to save for retirement, and your situation doesn't mention anything about you wanting to save for retirement. You just want to obtain some monetary gains on discretionary income you're going to come across in the next 5 years.

If you want to invest in the stock market, just open up a NON-Retirement brokerage account at any major financial institution or local bank. Local banks should give you better deals on annual fees/commissions if you're not planning on saving too much (let's just pick an arbitrary figure and say under $100k over that 5 year term).

Good luck.

-Sean