Halal Retirement Calculator

An Individual Retirement Account (IRA) is a type of savings account that is designed to help you save for retirement and offers many tax advantages. There are two different types of IRAs: Traditional and Roth IRAs. For more information on Traditional IRAs, please read the IRS’ website. Consult a professional tax advisor to answer questions about your eligibility for tax deductions.

For Roth IRAs, if you satisfy the requirements**, qualified distributions are tax-free. You cannot deduct contributions to a Roth IRA. Non-working spouses may also contribute up to $5,500 ($6,500 if age 50 or older) to a Roth IRA. You may continue to make contributions to your Roth IRA after you reach  70½ years of age. There are no required minimum distributions on Roth IRAs. Your Roth IRA contribution might be limited based on your filing status and income, please read the requirements on the IRS’ website.

For more details about Roth IRAs, please check the IRS’ website. Consult a professional tax advisor to answer questions about your eligibility for tax deductions.

The primary difference between a Traditional IRA and a Roth IRA is the type of tax benefit each offers. With a Roth IRA, you get no deduction for contributions, but if you follow all the rules, your investment earnings will be distributed tax- and penalty-free in retirement. Traditional IRAs can provide a deduction for contributions and you may defer taxes on investment earnings until funds are withdrawn, typically in retirement.

No, there are no account opening fees. Please refer to our Wrap fee brochure for more details.

Wahed makes halal investing simple. Once you have completed the questionnaire, we'll provide you with an optimal strategy based on the answers you submitted. After you fund your account we'll invest your money for you according to your recommended portfolio.

Your Modified Adjusted Gross Income (MAGI) is an income tax term. It is your adjusted gross income (AGI) with certain deductions and exclusions added back. It's used to determine whether or not you’re allowed certain tax benefits like being able to deduct your Traditional IRA contribution or qualify to make a Roth IRA contribution. Need more information? Review IRS information on IRAs, IRS Publication 590-A, or contact your tax advisor. Or for a step-by-step guide to calculating your MAGI, you can refer to the IRS’ Website.

A rollover is the process of moving your retirement savings from your retirement plan at work (401(k), profit-sharing plan, etc.) into an Individual Retirement Account (IRA) with Wahed Invest. Rolling over to an IRA allows you to keep your savings tax-deferred.

At Wahed, we have simplified your experience to rollover your retirement account in a few clicks. Visit https://www.wahed.com/ to complete a simple questionnaire and open an account.

After you open your account, you'll be able to sync your retirement plans at other providers and transfer them to Wahed's halal portfolios online.

If your plan at work is a Roth 401(k) or Roth 403(b), then you can roll your Roth money directly into a Roth IRA with Wahed.

If you don’t have a Roth plan, you have the option to convert your funds to a Roth IRA. Just remember, you’ll have to include any converted amounts as income on your taxes. Learn more about converting to a Roth IRA on the IRS’ website.

Yes, you can combine rollovers and contributions in the same IRA. However, Traditional IRA dollars and Roth IRA dollars must be kept in separate accounts.

Yes, this is possible in the new app for a new user. However for existing clients who have Traditional IRA accounts with multiple emails, this is not possible.

No. As of now, we request you to convert it at your current institution before you initiate the transfer.

The only form of asset transfer that is acceptable is cash only.

Yes. You will receive two tax forms — an IRS Form 1099R, reporting that you took a distribution from your former employer's plan, and an IRS Form 5498, reporting that you made a rollover contribution to your IRA with Wahed Invest. Even if no portion of your rollover is taxable, you must report it on your tax return.

Typically, you will not owe taxes on your rollover if you roll over your money directly from your company plan into an IRA with Wahed Invest. This means that your company plan makes the check payable to your IRA's custodian, and that check is deposited to your IRA. Consult your financial advisor before implementing any changes as your situation may vary.

The minimum required to open an IRA is only $100.

Yes, you may make contributions to both a Traditional IRA and a Roth IRA in the same year, provided the combined total contribution does not exceed your contribution limit, or 100% of earned income, whichever is less, for the year, including any catch-up contributions. For example, in 2022, the total amount you can contribute to both a Traditional IRA and a Roth IRA combined cannot exceed $6,000 ($7,000 if age 50 or older). For more up to date information about your contribution limits and more, please visit the IRS’ Website.

Yes, you can open and fund a Traditional or a Roth IRA even if you already contribute to an employer-sponsored retirement plan; this will help you save more than you could in your employer-sponsored plan alone. You may want to discuss this option with your tax advisor, however, please be aware that participation in an employer sponsored plan may impact deductibility in a Traditional IRA. You can visit IRS’ Website to check the taxable impact of your deductions or refer to your tax advisor.

If you are under age 50 you can contribute up to $6,000 in 2021 and 2022, and if you're age 50 or older, in a particular tax year, you can contribute an additional $1,000 catch-up contribution for a total of up to $7,000.

No, loans are not permitted from IRAs.

Taxable distributions from Traditional and Roth IRAs before age 59½ may be subject to an IRS 10% penalty tax. The exceptions to the 10% penalty before age 59½ are: death, disability, eligible medical expenses, certain unemployed individuals' health insurance premiums, qualified first home buyer (lifetime maximum of $10,000), qualified higher education expenses, substantially equal periodic payments (SEPP), Roth conversions, qualified reservist distribution or IRS levy. For more up to date information about your tax and penalties for an early distribution and more, please visit the IRS’ Website or contact your tax advisor.

Once you reach age 50, in a particular tax year, contribution limits on IRAs and employer-sponsored retirement accounts increase, allowing you to "catch up" on your savings by contributing an amount over the annual contribution limit. In 2021 and 2022, you can contribute an additional $1,000 catch-up contribution to your IRA, making your maximum contribution amount up to $7,000.

Please note that you can only add a beneficiary to a retirement account. This can be done from the account details section in the app.

A Simplified Employee Pension (SEP) IRA provides business owners with a simplified method to contribute toward their employees’ retirement as well as their own retirement savings. Contributions are made to an Individual Retirement Account (IRA) set up for each plan participant (a SEP-IRA). A SEP-IRA account is a Traditional IRA and follows the same investment, distribution, and rollover rules as Traditional IRAs. Employers and employees can make both SEP IRA and Traditional IRA contributions to the same account.

An inherited IRA allows beneficiaries a way to keep the funds growing tax-advantaged in an IRA while taking distributions. The account titling will always refer to the deceased IRA owner, with you listed as the beneficiary. Since you aren’t the owner, you may not make contributions and cannot execute a 60-day rollover to this account. The benefit of this arrangement is that you only need to take annual required minimum distributions (RMDs) based on your life expectancy and are taxed on that amount; this is often referred to as the stretch IRA strategy.

A Roth conversion involves a transfer of assets from your Traditional IRA or employer-sponsored retirement plan, such as a 401(k), 403(b) or Government 457, into a Roth IRA. Converting before-tax money to a Roth IRA triggers a taxable event; you will not owe tax on any after-tax amount converted.  Subsequent investment earnings can be tax- and penalty-free if you maintain the account for at least five years and take withdrawals after age 59 1/2, or for disability, death or using the qualified first time home buyer exception. Learn more about converting to a Roth IRA on the IRS’ website.

Consolidating your IRAs with Wahed Invest offers many potential benefits, including one monthly statement, required minimum distribution (RMD) simplification, potentially fewer fees, and ease in managing your investment strategy. To to learn more about how to transfer or consolidate IRA assets, email us at support@wahedinvest.com or call us at 1-855-529-4747

You can, but it's a good idea to consider the impacts of each option before making a decision to take money out of the plan.

When you take money out of the plan in a check payable directly to you, 20% of the original balance will be withheld for federal income taxes before you get the check, so you won't have the full amount to roll over. Learn the potential consequences of withdrawing cash from your 401(k) with a previous employer versus rolling over to an IRA.

You can still deposit the money into an IRA or your new company sponsored plan, but you must do this within 60 days.

If you don't deposit the withheld amount to the new IRA or company sponsored plan, it will be added to your ordinary income (which may be taxable) and may also be subject to IRS penalties

The 20% that is withheld for taxes is considered normal income tax withholding, as is the case with your paychecks. If you overpay taxes for the year, you may get some of it back in a refund when you file your tax return.

When rolling over a 401(k), you may be able to take a portion of your money out of your plan at work and leave the rest in, but not all plans allow this.

If you are required to take all of your money out of the plan, you can roll over to an IRA with Wahed Invest, then take the portion that you need out of the IRA. Depending on what you need the money for, you may qualify for a waiver of the penalty tax if you take the money from an IRA rather than directly from your plan at work.

If you have access to other money, you may want to avoid taking money out of the plan. Even a small withdrawal can have a drastic effect on the growth of your retirement savings.

Check with your company to find out if the plan will allow you to continue making payments after you leave the company, or whether you are required to repay the balance of your loan before you can roll over the remainder to Wahed Invest.

If you decide to take your money out of the plan and don't repay the loan before doing so, the amount of the unpaid loan is added to your income for the year (which may be taxable) and may also be subject to IRS penalties, depending on your age.

You may be able to take money out of your retirement plan at work while you still work for the company. But typically, you are only able to take money out when you reach the normal retirement age of 59 1/2, leave the company, or become disabled, or if your employer terminates the plan. Check with your company to find out when you can take money out of your plan.

For traditional IRAs, you are legally required to begin taking distributions in the year you reach age 70½. The dollar amount of the distribution is based on the value of the IRA account and age of the account holder. IRS Publication 590 provides details on how to calculate the minimum distribution. Required minimum distributions must start prior to April 1 of the year following the year in which you reach age 70½. Failure to take the required minimum distribution results in an IRS penalty tax of 50% of the amount that should have been distributed.