Retirement money · inside your plan
Your plan's default fund is not halal. Ask for a brokerage account.
Most people never choose. The plan picks a target-date fund, the money goes in every payday, and the fund holds bonds. The fix is not to stop contributing. It is one request to the plan.
Why the default fund fails the screen
59% of people in the plans Vanguard runs held a single target-date fund at the end of 2024, and 96% of those plans offered one. A target-date fund holds a slice of ordinary bonds that grows as you age. Bonds pay interest, so a halal screen leaves the fund out, whatever the stock side holds.
Source: Vanguard, How America Saves 2025, data to December 31, 2024. We do not check mutual funds; a target-date fund fails on the bond sleeve alone.
What to ask for
A self-directed brokerage account inside the plan, sometimes called a brokerage window or brokerage link. 44% of participants in Vanguard's plans were offered one in 2024, and 1% used it. If your plan has one, you can move part or all of your balance into it and hold the certified halal funds there, while your payroll contributions keep coming in.
If your plan does not have one, ask for it. Plans add features when employees ask, and the request costs the employer nothing to hear.
The message to send
Subject: Self-directed brokerage option in our 401(k)
Hello [HR or benefits contact],
For religious reasons I cannot hold interest-bearing bonds, which rules out the plan's target-date funds. Does our plan offer a self-directed brokerage account (brokerage window)? If it does, please send the enrollment steps and any fee schedule. If it does not, I would like to request that the plan committee consider adding one; several providers offer it at no cost to the employer.
Thank you,
[Your name]
Keep the reply. If the answer is yes, the next article shows what a brokerage window can hold. If the answer is no, keep contributing up to the employer match, since the match is money you do not get otherwise, and put the halal part of your saving in an IRA.
While you wait
Look at the plan's fund list for a stock-only index fund with no bond sleeve. It will not pass a full halal screen, since a broad index holds banks and brewers, but it carries no interest income of its own, which is a smaller problem than a bond fund. Treat it as a holding place, not a destination.
Read next: A brokerage window: what to hold, by how much risk you can take.
Education, not personal advice. The example mixes are the same for every reader and describe nobody's situation. Every number carries its date.