John Grobe

How many of you have reached, or are past the “Bon Jovi moment” of your career? What’s a Bon Jovi moment? It’s when you’re halfway there. In Jon Bon Jovi’s (John Bongiovi, Jr.) hit song, Livin on a Prayer, the band exclaims that the subjects of the song (Tommy and Gina) are halfway there. Where “there” is is anyone’s guess.

If we consider “there” to be a comfortable retirement and imagine that either Tommy or Gina is a full career federal employee, then halfway there means that Tommy/Gina has roughly 15 years yet to go in their federal career. If they have been financially diligent, the odds are good that they have paid off student loan debt, have a house on which they are making payments, and have been setting aside money for the education of their children. With all of those tasks to face, they were setting aside 5% in their TSP in order to receive the government match. They also have had the “forced savings” of Social Security and FERS contributions.


Tommy and Gina have reached the point where they need to kick their TSP contributions into high gear. The 2020 elective deferral amount for the TSP is $19,500 and is likely to be increased to $20,500 for 2021. $20,500 multiplied by 15 years comes out to $307,500. That’s without counting the government match or considering earnings on their TSP account. It also doesn’t consider the money they contributed over the previous 15 years and earnings on that.

With all their other commitments, how can they free up the money to fully fund the TSP? Here’s a few suggestions:
• Refinance their house if they can obtain a lower mortgage rate. They must not, however, take cash out, or extend the term of the mortgage.
• Let their children know how much of their college will be paid for and how much will be the children’s responsibility. Nowhere is it written that parents must pay for every penny of their children’s’ education. They need to discuss college selection with their kids too.
• If they can’t immediately bump up their TSP contributions to the max, they should develop a plan where they keep on increasing what they save for retirement with the goal of hitting the maximum contribution as quickly possible.
• If need be, realize that they aren’t quite “halfway there” and plan on working a few additional years.

It has been said that there are three major savings goals over a person’s life:1) Buying a home; 2) Paying for their children’s education; and 3) Setting aside enough for retirement. And it has been asked: Which of the above items won’t a bank give you a loan for? You should never shortchange your retirement for these other, admittedly important, goals; other wise you might find yourself “livin on a prayer” once you retire.

To see where you are now, and where you could be in the future, you can use the helpful TSP calculators. They can be found at https://www.tsp.gov/calculators. There are several calculators available, but the best one for projecting your future account balance is called “How Much Will My Savings Grow?”. This particular calculator lets you use different scenarios so that you can see how changes in your savings will result in changes in the amount you will have for retirement.

Even if you’re halfway there, you don’t want to find yourself livin on a prayer in retirement.