Should 401K and Similar Funds Be Considered Personally Controlled or Beyond Personal Control?
Opinions differ. Some hold it to be under the control of an independent agency and others under the employee’s control (minus penalties). It may also be deemed a “good” loan (a debt likely payable in the future). It seems best for the individual to consider all such accounts—401(k), Keogh, IRA, SEP-IRA, Roth IRA, etc.—as part of personal net worth, as the employee has eventual and determinative access to the funds. As a type of savings, it is zakatable at the rate of 2.5 percent annually (Zakât Calculation, 50-52). Usually not all the money is accessible to the investor for withdrawal, up to 50 percent normally being allowed. The following formula, authored by Dr. Salah Al-Sawy, secretary general for the Assembly of Muslim Jurists in America (AMJA), is suggested: (WA)-(PP)-(PT)=(ZA).
