Retirement account and buying car

[StirCrasy]

Re: Retirement account and buying car

@psyah

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.

Look, I think there are some very basis knowledge you are missing here.

1. If the below quoted definition of zakat (that I googled) is correct then the 2.5% is only on the portion that is in excess of what the dude needs to live. Which means if he cannot live on his monthly income he can reduce his savings for that month or even take money out of the savings.

2. In what planet can a dude making $4k monthly would have saved up $1Million? If he always made 4k monthly, paid 10% tax and saved 30% of after tax, he saves a bit over 1K monthly. At that rate it will take him a 1000 months (not counting interest or capital gains). Or atleast 500 months if you allow him compound interest and capital gains. In those 40 years he would reach 60+ and would make a lot less than 4K, so he will start withdrawing from his savings.

Not saving for retirement is nothing but stealing from future generations

ZAKAT: (Alms) The Zakat is a form of giving to those who are less fortunate. It is obligatory upon all Muslims to give 2.5 % of wealth and assets each year (in excess of what is required) to the poor. This is done before the beginning of the month of Muharram, the first of new year. Giving the Zakat is considered an act of worship because it is a form of offering thanks to God for the means of material well-being one has acquired. –An introduction to Islam