Question 1

Is a 401(k) halal?

Accepted Answer

A 401(k) is halal only if the money is invested in Shariah-compliant options — typically a Shariah-screened equity fund like Amana Growth Fund, Iman Fund, or a halal-certified target-date fund. If your employer's 401(k) plan does not offer halal options, contribute enough to get the employer match, then move the funds into a self-directed halal IRA (Wahed, Amana) at year-end if plan rules permit.

Question 2

What return rate should I use for halal retirement planning?

Accepted Answer

Shariah-screened U.S. equities have historically returned 6–9% annualized over rolling 10-year windows (Amana Growth Fund, HLAL, SPUS). A conservative default is 6.5% nominal. Use 5% for a more cautious projection and 8% for an aggressive one.

Question 3

Do I need to purify my halal retirement account?

Accepted Answer

Most Shariah-screened funds have 2–5% of revenue from non-compliant sources (incidental interest income, small non-core lines of business). Fund managers typically publish an annual purification ratio — donate that percentage of your gains to charity (not Zakat) each year to fully purify the portfolio. Amana, Wahed, and SPUS all publish these ratios.

Question 4

How much should I save in a halal IRA each year?

Accepted Answer

In 2026, the IRS IRA contribution limit is $7,500 ($9,500 if age 50+). The 401(k) limit is $24,000 ($31,500 if 50+). A good rule of thumb: save 15% of gross income for retirement across all accounts. Use the calculator on this page to model different contribution scenarios.

Question 5

Can I roll a conventional IRA into a halal IRA?

Accepted Answer

Yes. Direct custodian-to-custodian transfers from a conventional IRA to a halal IRA (Wahed, Amana, Saturna) are not taxable events and don't affect contribution limits. Once transferred, liquidate any non-compliant holdings and reallocate to Shariah-screened funds.

Question 6

What's the difference between halal IRA and halal 401(k)?

Accepted Answer

A halal IRA is an individual account you open and control — you pick the halal funds. A halal 401(k) is an employer plan where your employer chooses the lineup; halal options depend on what your plan includes. Best-practice: max the employer match in the 401(k) (even if only partially halal), then max a halal IRA, then if possible switch remaining 401(k) funds into a self-directed halal option.

Question 7

Does the 4% rule apply to halal retirement?

Accepted Answer

Yes — the 4% safe withdrawal rate originated from Trinity/Bengen studies on diversified equity portfolios, and Shariah-screened equity portfolios have comparable volatility and return profiles. Many halal retirees use 3.5–4% as a conservative withdrawal rate.

Account type	Standard limit	Age 50+ catch-up
Traditional / Roth IRA	$7,500	$9,500
401(k) / 403(b) / TSP	$24,000	$31,500
SEP IRA (self-employed)	25% of comp or $70,000	—
HSA (retirement-adjacent)	$4,400 single / $8,800 family	+$1,000

Halal Retirement Calculator

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