Help about 401k question!

[amgtx]

Hello,

My job opened 401k for us back months ago almost a year. I always thought 401k was a retirement plan where they take some money from you paycheck and put it somewhere for you. Didn’t even know it goes into investing. Did some research recently and noticed that 401k is somewhat haram. I texted the HR and told them I don’t want anything to do with this and the suggestion I was given was to just set the percentage of contributions to zero so that money isn’t taken out of my check. But me being me, I noticed that my portfolio says 87 percent stocks and 13 percent bonds, so now that I set the contribution to zero what do I do? I heard just recently that bonds is haram. What happens to the money already there?

 

[mountainmanbob]

@amgtx You can set it to zero bonds and all stocks/ETFs.

401k isn’t haram, but part of the stocks are in impermissible categories. This is generally 1/3 of the stocks, I’ve heard this from finance coaches and also calculated it for the specific stocks my 401k is for. So in order to purify your wealth, you’d have to give away 1/3 of your 401k money when you receive it.

You can also ask them to put your money into halal ETFs, but idk how willing they’d be.

 

[amgtx]

@mountainmanbob How can you set zero bonds on all stocks?

And also I don’t want any money in there and would give it away for the sake of Allah because there is a lot of uncertainty in it.

I already asked for halal options and they said that’s not possible with them.

 

[mountainmanbob]

@amgtx On mine if I go into settings where you can make your own, I chose zero bonds.

 

[realitywild777]

@amgtx 401k is an account, a retirement account. The account is not haram, what stocks or etfs you buy or sell is what you should be thinking about. There are Halal etfs such as SPUS, HLAL, SPRE, SPSK.

Check to see what are your holdings in the account

 

[amgtx]

@realitywild777 I see that it’s vanguard which I think isn’t permissible. So what do I do after I sent the contribution to zero. Do I just let it sit there?