Self Directed Retirement account

I am in similar situations. I work in company and they have multiple options.

Right now I am in American retirement 2050 collective investment trust, similarly I have other options like vanguard, Blackrock, contrafund fidelity and many more. In this list there might be the list which we can invest but I have no idea how to choose. Any suggestions are welcome. Jazakallahu khair

Salam Sr Salma,

Please allow me to chime in while you wait for a response from Br Rakaan or Sarmad.

I've been in the same situation and have done a fair amount of research and have spoken to various scholars about this. Here is a brief summary:

• If your 401(k) plan is with Fidelity (or Vanguard, Charels Schwab, etc), look into setting up a Brokeragelink account if your employer allows it. It allows you to self-direct your investments. This articles explains it in a bit more detail: https://rodgers-associates.com/blog/give-your-401k-an-upgrade-with-fidelity-brokeragelink/. If you are able to do this, then you can invest in SPUS, HLAL, AMAGX, and other halal ETFs and mutual funds.
• If your employer has a good matching program, I recommend not missing out on that free money. Most plans allow you to choose investment "buckets", such as bonds, equity index funds, large cap index funds, etc. Stay away from anything that has traditional bonds because they are strictly prohibited (as opposed to Islamic ones called Sukuk), and put everything into stock index funds if possible. Now not everything in the fund will be halal of course, and there are several ways to deal with purifying that wealth ("purifying" haram earnings is to donate that money, even if over time if you need to, with the intention of getting rid of haram earnings as opposed to charity). The simplest and most straight-forward way is to check the top 10 holdings or so in the fund, especially when they comprise of the vast majority of the holding. You can take either the average or the higher-end percentage from those stocks and apply it on the mutual fund. I personally trust Zoya to screen which stocks are halal. AMJA has a short response to a similar question here: https://www.amjaonline.org/fatwa/en/1871/investment-in-401k
• Taking advantage of maximizing your 401(k) contributions and employee matches is great when you leave a company, because you can roll that over into your IRA, which I highly recommend maximizing every year. Br Rakaan has a great video on IRAs here: https://www.youtube.com/watch?v=5HA0keux3IQ&;ab_channel=PracticalIslamicFinance. This article by Shaykh Joe Bradford is also great: https://www.joebradford.net/five-dollars-one-million-ira-investment-halal/

I hope you find this beneficial. May Allah purify your wealth and put barakah in it. Please keep me in your duas.