Permissibility of retirement funds
Fatwa No: 90076

  • Fatwa Date:1-6-2005 - Rabee' Al-Aakhir 24, 1426
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Question

My husband was working in a bank that allows (Ribaa), now he is unemployed, could you tell me if the money that he receives and spends from (Ribaa) as a retired person is Halaal?

Answer

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.

 

There is no doubt that working in a bank which deals with usury and interest is forbidden, and the money that is earned thereof is not pure money and it is forbidden to spend it on one's own needs or on the people one is obliged to provide for. The same thing applies to the money that is given to him after retirement; it is forbidden money because it is a result of a forbidden contract. Therefore, if one takes this money, he should not spend it for his own use, but he has to spend it on the general interest of Muslims with the intention of getting rid of such money and not with the intention of giving in charity unless he is poor in which case it is permissible for him to only take what he needs, as in such a case, he is considered as a poor person on whom this kind of money could be spent, he can also take what he needs for the people he is obliged to provide for like his wife and his children.

Allaah knows best.

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