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401k and 403b plans

Fatwaa ID: 1257

Asalamu Alison wa Rahmatallahi wa barakatu,

I wanted to know is a 401k and 403b haram to enroll into if my employers offer it?

In the Name of Allaah, the Most Gracious, the Most Merciful.
As-salaamu ‘alaykum wa-rahmatullaahi wa-barakaatuh.

If one’s employer offers a 401k or 403b retirement plan, it will be permissible to enroll in it provided that one opts for Shari’ah compliant avenues or brokers. Investing in Shari’ah non-compliant avenues is impermissible and the returns therefrom too will be impermissible.

When investing in a retirement scheme such as the above, one should be reminded of his zakaah obligations. See the following:

And Allaah Ta’aala knows best.
Mufti Muajul I. Chowdhury
Darul Iftaa New York

وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين


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