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.

What return rate should I use for halal retirement planning?

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.

Do I need to purify my halal retirement account?

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.

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

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.

Can I roll a conventional IRA into a halal IRA?

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.

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

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.

Does the 4% rule apply to halal retirement?

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.

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Halal Retirement Calculator

Project your Shariah-compliant IRA or 401(k) balance at retirement using halal equity return assumptions — with a built-in purification estimate and inflation-adjusted view.

Direct answer

How much will my halal retirement account grow?

A halal IRA or 401(k) invested in Shariah-screened equity funds (Amana Growth, HLAL, SPUS, Wahed) has historically grown at 6–9% annualized. Over 30 years, $800/month + a starting balance of $25,000 at 6.5% grows to roughly $1.1M nominal / ~$540K in today's dollars — funding roughly $3,600/mo of retirement income using the 4% safe-withdrawal rule. Use the calculator below to model your specific numbers.

Historical halal equity returns: 6–9% annualized
Contribution limits 2026: $7,500 IRA, $24,000 401(k) (age-50 catch-ups available)
Purify 2–5% of gains annually (fund-specific ratio)
Safe withdrawal rate in retirement: 3.5–4% per year

Your inputs

Current age32 yrs

18 yrs70 yrs

Retirement age65 yrs

33 yrs80 yrs

Current halal IRA / 401(k) balance$25,000

$0$1,000,000

Monthly contribution$800

$0$5,000

Expected annual return6.5%

3%10%

Inflation2.5%

0%6%

Purification rate on gains3%

0%10%

Historical Shariah-screened equity returns (Amana Growth, HLAL, SPUS) have averaged 6–9% over 10-year periods. Inflation assumption from U.S. BLS long-run average.

Balance at 65

$1,318,938

Today's dollars: $578,501

Monthly income (4% rule)

$4,396

Today's dollars: $1,928/mo

Nominal balance Inflation-adjusted

Contributed

$341,800

Growth

$977,138

Purification estimate

$29,314

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HalalWallet Editorial Team

Editorial Team, HalalWallet

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How halal retirement accounts grow

Halal retirement accounts avoid interest (riba) by investing in Shariah-screened equities rather than conventional bond funds. Major halal options:

Amana Mutual Funds — Saturna Capital, longest U.S. track record (est. 1986)
Wahed Invest — halal robo-advisor with IRA & 401(k) rollover support
HLAL (Wahed FTSE USA Shariah ETF) — low-cost broad-market halal ETF
SPUS (SP Funds S&P 500 Sharia Industry Exclusions ETF) — large-cap S&P 500 screen
Iman Fund, SP Funds Sukuk ETF (SPSK) — additional options for diversification

Contribution limits (IRS, 2026)

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

Limits update annually — always confirm with IRS Publication 590 for the current tax year.

Purification — why it matters

Shariah-screened equity funds still hold companies that earn a small fraction of their revenue from non-compliant activities (typically interest income on cash balances or ancillary business lines). To fully purify your portfolio:

Check your fund's annual purification ratio (published in prospectus / investor letter)
Multiply your year-over-year gains by that ratio
Donate the resulting amount to charity (not Zakat) — this is separate from Zakat
Record the amount for your own tax and Zakat records