My employer takes a portion out of every paycheck and also adds an amount from the company’s behalf, and deposits it into a 401K retirement account. I have no access to those 401K funds until I reach retirement age. For khums purposes, what is the right approach out of the following:
- Is it correct to wait until retirement when I have access to the funds, and then take out khums yearly at that time as the money is distributed?
- Or should that deposit be considered part of current income, and take out khums on it now yearly even though I have no access to the money? This option would be difficult because I cannot remove a portion of the 401K deposit for khums since I have no access to it, and would be forced to reduce current living expenses in order to cover khums out of pocket.
- Some other approach?