Re: Retirement account and buying car
can u explain what this is?
Peace again Rebel X
This is referring to my post that came before the table.
It shows that as and when the amount in saving increases we will be reaching a practical threshold for the saving.
The left column is a fiscal salary per month and the assumption is that 25% of ones monthly cash flow will have to go towards paying zakat to cover 1 years worth of zakat on the maximum possible saving.
So for example an extreme example a person who earns $4000 per month and has a saving of $1 million. His yearly zakat will come to $25000 which is equal to $2083 per month just in zakat payments. That will reduce his living standard because that will bite half of his monthly earnings away.
A person earning $2500 per month will never be able to afford a saving of $1 million because the zakat will control over savings by nature of its function. That will leave him only $417 per month to spend. No one is that stupid to earn so much but to use so little and give the rest in zakat just to ensure a huge pay out in years to come that may or may not come to be.