Do I Have To Pay Zakat On Money Saved For Retirement?
Faisal I went through all material many times, but it is difficult to remember everything and all scenarios and exceptions. I need to make some reference sheet.
On production / salary there’s 5% or 10% zakat due every time there’s production (or paycheck received). On assets / savings (whether they’re invested or not) there’s 2.5% zakat due every year. Retirement funds and pensions are essentially salary paid in the future for work performed in the past so the same production percentages apply on withdrawals. Also since the total amount is generally not in your control, you don’t pay asset zakat on it. If any portion of it is saved and becomes your asset then you pay the asset zakat on that portion in the future.