niranjanasu wrote:I have read the Boglehead's Guide to Investing and came to these boards (both) through that book. If I decide to go back to India after some time, how can I take the money invested in 401K without incurring the penalty?
If you are withdrawing modest sums (around $10,000/year) then most of this will be covered under the standard deduction/personal exemption so all you'll pay in taxes is 10%, which is not bad (I'm assuming that the SD and PE will still be applicable).
I was in India briefly earlier this year, and out of curiosity I checked out the index funds, and there are funds with ER of 0.8% or so. Still very expensive but getting better. Not sure of the fund names, but I think I found this in the Economic Times.
But I think a greater issue will be that you will be exposing yourself to single-country risk, if most of your investment are in Indian equities. I think it will be better to leave at least some of your investments in the US where you can buy whatever you want at a low cost.