401K with Self Directed Brokerage

💰 Everyday Islamic Finance
#1

Assalamu Alaikum,

I have a question. My employer offers a 401K plan through Fidelity. The account allows a self-directed brokerage where I can contribute 93.66% of the account. I can select Amana funds.

A few questions

  1. Is there a required purification on this percentage allocation and how would it work? Would it only apply to the remaining 6.34% and how would it be calculated?
  2. As a more general question, what amount should/can one contribute for the account to be Shariah-compliant? Do most scholars say that you can only invest enough money to make the employer match and no more?

Jazak Allahu Khairan.

#2

Hey Walaikum Assalaam Mehdi, welcome the Zoya community!

Regarding purification I think our FAQ is a good place to start
https://help.zoya.finance/en/articles/4189829-how-do-i-purify-my-investments

I am wondering where is the remaining 6.34% invested? How much of those holdings are shariah compliant, and if not what section of the screening does it fail?

I’m not sure what the Ulama’s position is on how much one should contribute. Maybe someone else has a better idea.