Clark,
On the air on Thursday 4.24.08, you suggested to a 60 year old not to start his union pension withdrawals unless he needs the money, so he can get a bigger monthly payment in the future.
I believe the issue is more complex and he should calculate several variables to determine when to start the pension.
If he does not need the money, he can start taking the monthly payouts, paying current year income tax, and invest the money in tax free municipal bond funds. The bond fund will continue to grow year after year, and then in the future he will have a nest egg in his control that will pay much more than the difference in the pension monthly payments caused by starting earlier.
The trick is the pension money has to be invested, not spent, and the caller's current tax rate has to be considered also. Annuity calculators are available on the internet for free to help with his analysis.
Also, his pension may be charging a spousal coverage fee that will reduce his monthly payments if he has a spouse covered to receive payments if he pre-deceases her.
My analysis of my personal pension payouts from a former employer yielded a result that I should start receiving payouts at age 55. The interest from my nest egg in my municipal bond fund, with Vanguard, will be able to make up for the reduced monthly payouts, plus my heirs have a chance to get the nestegg if I am unfortunate enough to not live to enjoy it myself.