Q. Having turned 55, I can start collecting a $650-per-month pension from a former employer. But I don’t need the money now and can get $1,210 a month by waiting to age 62 to start taking benefits, or $1,613 if I wait until 65. Which option is best?

A. Without many more details, it’s hard to say for sure. But here are the basics:

This type of pension is typically based on the employer’s assumptions about the employee’s life expectancy. If you live to the expected age, the cost to the employer might be about the same no matter which option you choose.

Obviously, that’s because you’ll receive a bigger payment if you start at 65, but you’ll get it for fewer years.

Clearly, if you die at 60, you’d be better off starting at 55 than waiting until later. At the other end of the spectrum, you might come out ahead by starting at 65 if you live longer than expected, since you’ll get the larger payment for long enough to more than make up for the late start.

Now let’s see what happens using your numbers.

Start taking $650 a month at 55 and you’d win if you die before age 71. By the end of your 70th year, you’d have received $117,000.

You’d have received $116,160 if you started getting $1,210 a month at 62 and $96,780 if you’d waited until 65 and received $1,613 a month.

If you live at least to 72 but not to 75, you’d do better starting at 62. Live to 75 or longer and you’d do better by waiting until at 65 to start.

The longer you live, the more that late start will pay off. By the end of your 85th year, for example, the age-55 start would have earned you, $234,000, vs. $333,960 with the age-62 start and $387,120 with the age-65 start.

But didn’t I say that if you lived to the expected age, each option would cost the employer the same?

Yes, I did. The employer probably assumes that money you do not receive is invested. If you start at 65 instead of 55, the employer has 10 years of investment earnings to help meet the larger monthly payments you’d receive.

The point is, you could do quite well by starting your pension at 55, even though the monthly payment would be much smaller.

There are lots of other things to consider: Will the pension grow to offset inflation? What benefit will your spouse get after you die?

How will taking the pension at a young age affect your taxes? Do people in your family tend to die young or keep on ticking?

Your benefits folks at work should be able to help with some of this.

For professional financial advice, I favor the “fee-only” advisers who charge an hourly or flat rate for advice and don’t sell products or execute trades.

The National Association of Personal Financial Advisors has a referral service for fee-only pros at http://www.napfa.org/. Or call 800-366-2732.

-Inquirer.

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AP-NY-08-09-04 0635EDT