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If you get divorced and are legally entitled to a portion of your spouse’s retirement money, take care before you think of this money as a ‘windfall’ to spend. Instead, remember that it was initially intended to provide a comfortable retirement.

Bev van Nijkerk, a market segment specialist at Sanlam, says divorce is an extremely traumatic event on its own but its financial implications is one of the thorniest considerations. People should, therefore, make sure that they carefully consider the bigger picture when it comes to evaluating their financial situation and making decisions.

“For starters, where just one person was the breadwinner in a household, divorce will often result in the other person now having to find a job. These scenarios mean divorce often accompanies difficult decisions about where you are going to live – whether to buy a new home or to rent for a while.”

“In the latest Sanlam Retirement Benchmark survey, we saw that only 10% of retirement fund members consider the impact of divorce on their retirement planning. Women often don’t consider the fact that they are likely to live longer than men and, therefore, have to make more provision for retirement.”

The 2015 Sanlam Retirement Benchmark survey showed that women can expect to live 4 years longer, and therefore be in retirement longer, than men. At the same time, several recent studies have found that women invest their pensions more conservatively than men.

Van Nijkerk says it might be overwhelming for a woman who is not used to making the financial decisions to take charge of decisions about investments. However, she encourages women to be astute, ask questions so that they understand all the financial implications, negotiate advice fees and seek a qualified financial adviser who will help them along on their journey.

Sanlam Life Insurance is a licensed financial service provider.
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