A lieutenant colonel salary retired varies based on years of service, retirement system, and disability rating. According to the Defense Finance and Accounting Service (DFAS), military retirement pay is calculated using a formula tied to your base pay at the time of retirement and your total creditable service years.
Many retiring lieutenant colonels (O-5 pay grade) are surprised by how much their take-home pay changes after leaving active duty. Taxes, Survivor Benefit Plan premiums, and VA disability offsets all affect the final number.
This guide breaks down how O-5 retired pay actually works. You'll learn the current base pay figures, how the retirement systems differ, what deductions to expect, and practical steps to estimate your own retired salary.
Understanding O-5 Base Pay and Retirement Calculations
The lieutenant colonel salary retired figure starts with your monthly base pay as an O-5. The 2025 military pay tables published by DFAS show that an O-5 with over 20 years of service earns a base pay ranging from approximately $8,900 to $12,400 per month, depending on time in grade.
The retirement formula depends on which system you fall under. The legacy High-3 system multiplies your highest 36 months of base pay by 2.5% per year of service. For a lieutenant colonel retiring at 20 years, that equals 50% of your High-3 average.
Under the Blended Retirement System (BRS), the multiplier drops to 2.0% per year, so 20 years yields 40% of your High-3. However, BRS includes automatic and matching Thrift Savings Plan contributions that offset the lower multiplier.
The DFAS official guidance states: "Your retired pay is calculated by multiplying your retired pay base by your service multiplier." This formula is the foundation for every lieutenant colonel salary retired estimate.
How to apply this: Pull your most recent Leave and Earnings Statement (LES) from myPay and note your current base pay. Multiply it by 0.50 (High-3) or 0.40 (BRS) at 20 years as a starting estimate.
How Years of Service Impact Your Retired Pay
Every additional year beyond 20 increases your retired pay multiplier. A lieutenant colonel who stays for 24 years under High-3 receives 60% of their base pay instead of 50%.
The difference is substantial. Using 2025 DFAS pay tables, an O-5 with 22 years of service has a base pay roughly $1,000 higher per month than one with 20 years. The combined effect of higher base pay and a higher multiplier can add $800 to $1,500 monthly to a lieutenant colonel salary retired.
However, promotion timing matters. Officers passed over twice for colonel typically must retire by 28 years of commissioned service. This means most O-5 retirements happen between 20 and 24 years.
Consider a lieutenant colonel retiring at 22 years under High-3 with a base pay of $11,500. Their monthly retired pay before deductions would be approximately $6,325 (55% multiplier). This is why the lieutenant colonel salary retired varies so widely across service lengths.
How to apply this: Map out your remaining service timeline. Use the DFAS retirement calculator to compare retiring at 20, 22, or 24 years and see the monthly difference.
Deductions That Reduce Your Take-Home Retired Pay
Your gross lieutenant colonel salary retired figure is not what hits your bank account. Several deductions apply automatically unless you opt out.
The Survivor Benefit Plan (SBP) is the largest common deduction. SBP costs 6.5% of your gross retired pay and provides up to 55% of your retired pay to your surviving spouse. For an O-5 with $6,500 gross monthly retired pay, SBP costs about $422 per month.
Federal income tax withholding applies to military retired pay. Most states do not tax military retirement income, but seven states still do. The IRS treats military retired pay as taxable income, though VA disability compensation is tax-free.
TRICARE enrollment fees for retirees are modest but real. TRICARE Select for retirees has an annual enrollment fee, while TRICARE for Life serves those over 65. These small costs still chip away at the lieutenant colonel salary retired you actually keep.
How to apply this: Use the DFAS Retired Military Pay Calculator to model your net pay with and without SBP. Review your state's military retirement tax policy before retiring.
VA Disability and Its Effect on Retired Pay
Many retiring lieutenant colonels qualify for VA disability compensation. This creates a decision point that affects your lieutenant colonel salary retired.
VA disability pay is tax-free, but receiving it typically reduces your taxable military retired pay dollar-for-dollar. This is called the VA offset. If your VA disability rating is 50% or higher, you may qualify for Concurrent Retirement and Disability Pay (CRDP), which restores some or all of the offset amount.
The math works like this: an O-5 with $5,000 monthly retired pay and a $1,500 VA disability payment would see their taxable retired pay reduced to $3,500 without CRDP. With CRDP eligibility, they receive both amounts.
According to VA.gov, veterans who served 20+ years and have a 50%+ disability rating receive full concurrent receipt under CRDP. This makes a disability claim potentially worth thousands monthly, and it can lift the lieutenant colonel salary retired well above the base formula.
How to apply this: File your VA disability claim through VA.gov before retirement using the Benefits Delivery at Discharge program. Getting your rating early prevents months of reduced pay.
Comparing Retirement Systems: High-3 vs. BRS
| Feature | High-3 System | Blended Retirement System | Action to take |
|---|---|---|---|
| Multiplier per year | 2.5% | 2.0% | Calculate both scenarios |
| 20-year payout | 50% of base pay | 40% of base pay | Compare with TSP balance |
| TSP matching | None | Up to 5% match | Max your TSP if on BRS |
| Lump sum option | No | 25% or 50% discount option | Evaluate if lump sum fits |
| Best for | Staying 20+ years | Leaving before 20 | Match system to plans |
The choice between systems was made in 2018 for most officers. Current O-5s on BRS should prioritize TSP contributions to bridge the multiplier gap.
A lieutenant colonel salary retired under BRS with a $300,000 TSP balance can withdraw approximately $1,000 monthly using the 4% rule. That partially offsets the 10% multiplier difference at 20 years.
How to apply this: Log into your TSP account at TSP.gov and check your balance and contribution rate. If you're on BRS, ensure you're contributing at least 5% to capture the full match.
Frequently Asked Questions About lieutenant colonel salary retired
What is the average retired pay for an O-5 in 2025?
The average lieutenant colonel salary retired falls between $5,500 and $7,500 monthly before deductions, based on 20 to 24 years of service under the High-3 system. Your specific figure depends on your highest 36 months of base pay and total service years.
How does retiring as an O-5 compare to retiring as an O-4?
An O-5 retiree typically earns $1,200 to $2,000 more monthly than an O-4 with identical service years. The pay gap widens with time in grade because O-5 base pay ceilings are higher, which increases the High-3 average used in the retirement formula.
A lieutenant colonel salary retired is typically $1,200 to $2,000 more per month than an O-4 retiree with identical years of service. The gap in a lieutenant colonel salary retired widens over time because O-5 base pay ceilings are higher and increase with time in grade.
With a VA rating of 50% or higher and 20+ years, CRDP lets you keep your full lieutenant colonel salary retired alongside VA disability pay. Below a 50% rating, the VA offset reduces your taxable lieutenant colonel salary retired dollar for dollar by the VA compensation amount.
Can I receive both military retired pay and VA disability?
Yes, if your VA disability rating is 50% or higher and you served 20+ years, CRDP restores your full retired pay alongside VA compensation. Below 50%, the VA offset reduces your taxable retired pay dollar-for-dollar, though the VA portion remains tax-free.
A lieutenant colonel salary retired can be fully restored through CRDP if your VA rating is 50% or higher.
Below a 50% VA rating, your lieutenant colonel salary retired is reduced by the VA disability offset.
What happens to my retired pay if I die?
Without SBP, your retired pay stops at death. With SBP coverage, your surviving spouse receives 55% of your elected coverage amount. The SBP premium is 6.5% of your gross retired pay and is deducted automatically unless you decline in writing. Planning for this protects the lieutenant colonel salary retired you pass on to your family.
Is lieutenant colonel retired pay adjusted for inflation?
Yes, military retired pay receives an annual Cost of Living Adjustment (COLA) tied to the Consumer Price Index. The COLA typically ranges from 1% to 3% annually, which helps preserve purchasing power throughout retirement and keeps the lieutenant colonel salary retired in line with rising costs.
Conclusion
- Your lieutenant colonel salary retired depends on your retirement system, years of service, and highest 36 months of base pay
- Deductions like SBP, federal taxes, and TRICARE fees reduce gross retired pay by 15% to 25%
- VA disability claims can add significant tax-free income if you qualify for CRDP
- BRS retirees should offset the lower multiplier with consistent TSP contributions
Take action now. Log into myPay, review your LES, and run your numbers through the DFAS calculator. Understanding your retired pay today helps you make better decisions about when to retire and what deductions to elect.
