Zakat on the Retirement Lump Sum

Short answer: The hawl starts the day the money reaches your hand. One lunar year later, whatever remains above nisab is zakated at 2.5%. No back-zakat is owed for the accumulation years, since ownership was incomplete then. Details: Once received, the sum merges with your other cash. If you already hold nisab with a fixed zakat day, the easiest method is to include the lump sum in that annual reckoning — paying part of it slightly early, which is valid and better. Whatever is spent before the zakat day is not counted; zakat falls on what exists that day. Evidence: Ibn Majah 1792 (hawl, sahih per al-Albani); Sahih al-Bukhari 1405 and Sahih Muslim 979 (nisab); Quran 9:34-35 and Sahih Muslim 987 (warning against unzakated savings); the Permanent Committee on the fresh hawl after receipt. For complex individual cases, consult a qualified scholar.