I’m 45, divorced and earning 9k before CPF with two kids aged 18&20. One has special needs. Overheads are 4.5k per month. How much should I save per month assuming I will retire at 62?

As much as you can prob is a good answer

I will state my assumptions (to fill missing gap) as I go along, if its wrong please adjust accordingly.

9k before cpf means your take home is about 7.8k since cpf is capped at 20% of 6k.

I will assume one of your kid will complete tertiary education by the time you reach 62, so it's probable that your overheads will drop towards 3.6k (using 80% of current).

There will be two areas to tackle and solve.
A) your expenses between 62 to 65 (cpf life payout starts at 65)

B) whether your assets plus cpf life payout can sustain the overheads of 3.6k.

For (A), my recommendation is for you to aim towards 36 x 3.6k = 130k in your SRS balance which can be withdrawn from 62 if you create the account now (if you haven't). Even if you don't have balances in srs now, if you contribute at least 7.5k towards the srs for the next 17 years, on your contributions alone we will hit close to 130k, which you can withdraw from 62 to 65 to cover your expenses.

(B) is the greater concern. I assume you turn 55 in 2030, which I estimate the ERS amount then to set aside in retirement account to be 365k in 2030. If you can hit 181k in your special account by end of 2020, it can compound to at least 326k by 2030, so we probably need about 40k from your OA as well to set aside for ERS.

The issue is I estimate ERS payout to average about 1.8 to 2+k in the first fifteen years and upwards of 2.5k thereafter (based on escalating at 2%). To be Conservative, we will take 2k as middle ground assumption for you when you reach 65 and activate cpf life payout.

So your gap to address is a further 1.6k monthly till when you pass away. 1.6 x 12 = 19.2k per year. Technically still not too hard.

Some suggestions to address the 19.2k
1) if you build a stable reits portfolio targeting 4% dividend yield, you only need the base amount of this portfolio to be 500k to get 20k of dividends per year.

2) In addressing part A, I said 7.5k annually helps address your take out amount for 62 to 65. If you aim for the cap of 15.3k per year, then the balance amounts (use very little gains assumption) can support withdrawals of 19.2k for another 7 years. Not too bad.

3) If you have balances in cpf OA, if you can address everything I mentioned, try not to withdraw at 55 to let it earn the 2. 5%. In order of withdrawals, it should be first srs (must withdraw before you turn 72 anyway), then your cash or cpf (keep more in oa or sa if you still have to earn more interest). If you want to address using OA interest, then 770k of OA balance will generate 19k of interest per year.

So in summary, set savings for the SRS first, then work on achieving the ERS, and work on some of the suggestions which can possibly address the gap of 19.2k that I assume you need.

added side note, if you have working mother child relief, and already max out the tax relief, don't setup srs since there is no tax benefit. Instead set that amount aside like a separate bank or retirement account

So many self-interested agents answering your question with more questions and giving you half-assed advice. Some don't even get basic arithmetic right.

I'd say you can start by ignoring everyone here and explore CPF LIFE - understand the nuances of your options and definitely read the details of how to maximise your tax reliefs (since you're making quite a bit and might be losing your WMCR soon). Peace

Assume overheads to be $4.5k/mth.

Usually loans would have been paid off & you no longer have any work expenses, it is usually excluded from ur current overheads. Let's just assume them to be $1k.

$4.5-1= $3.5k

If your expenses are consistent, your inflated (3%p.a) expenses would be ~5.8k/mth when you're 62.

Always plan further than life expectancy age. Because you don't want to end up in a situation where you live beyond your expenses.
90-62= 28

Retirement- based on calculation, you would need 1.95m to retire.

OA & SA (assuming you work from 25 to 62 with an average salary of 9k) plus compound int : $1,078,920

Your investment and savings will need to give you $872k by 62y.o.. Therefore, you would have 62-45= 17 years to accumulate these wealth.

Invest in markets that are guaranteed to grow.
(NOT guaranteed returns, but guaranteed growth) For example, manufacturing/tech funds that invest in China/India. Seek a professional wealth manager for this. Investing appx $2,500/mth with a well managed fund giving you 8~10%p.a, you're just in time for retirement.

All these are in consideration of the fact you're able to work till 62. What if you're unable to do so due to loss of income?
What could cause a possible loss of income?
-Inability to work due to cancer, unable to move, etc.
-Death
So therefore, you would need to hedge against against these risks based on the shortfall you need for retirement.

Let me know if you have any questions.