- EN (English)
|Title:||Zakat and the 401k retirement plan|
|Category:||Poor-due or obligatory charity (Zakaah)|
|Scholar:||Dr. Main Khalid Al-Qudah|
I have question on zakah and the 401k investment plan. How should I calculate the zakah to be paid on my 401K investment? Please advise.
Jazak Allahu khair,
• 401(k), IRA, Roth IRA, CD, annuity, etc., are not fully-accessible money, yet they are growing.
• Zakah must be calculated based on the following formula:
withdrawable amount – prescribed penalty – prescribed tax = zakatable amount
By “withdrawable amount,” I mean the amount you are allowed to withdraw, even if you have not actually withdrawn it in reality.