Japan's workaholic boomers start to retire

As workers shift gears to enjoy life without labor, the country copes with a shrinking work force and looming fiscal pressures.

ITO, Japan — The way Masahiro Shimizu sees it, he and Japan's other postwar baby boomers built the country into an economic powerhouse - and now it's time to enjoy the fruits of their labor.

Shimizu will leave his job in the department store business next year, having become one of about 5.4-million Japanese employees who will reach the standard retirement age of 60 during the next three years.

Those retirements, which began in April with the start of the fiscal year here, is a signature event for Japan. It symbolizes a rapidly aging society, a looming fiscal crunch and the emergence of a roaring "gray economy" fueled by free-spending retirees.

Born between 1947 and 1949, before abortion laws were loosened to prevent overpopulation, the estimated 7-million baby boomers grew up as Japan rebuilt itself after World War II. They moved into the job market as the Japanese economy took off. They hit their prime in the '80s - just as the economy peaked.

Now they are entering their golden years. The rest of the nation, however, must confront the challenging social and economic consequences of societal aging. The government is already moving to reform employment and pension plans.

The impact of mass retirements is expected to be limited at first. But, not unlike the debate in the United States over Social Security and longevity, the discussion here is in full swing. And the official retirement age is already being edged upward.

Shimizu, 59 and married, could have stayed at his job until 65. Government officials would be delighted if more boomers did make that choice, thus softening the social security burden. But Shimizu isn't interested.

"Until now, it has been all about the family, " he said while visiting the exhibit of a retirement village planned in the resort town of Ito, south of Tokyo.

"Now, my son and daughter are on their own . . . so I want to be independent and do what I want."

Last year, the government started requiring companies to gradually raise the retirement age to 65 or to find other work for aging employees. The qualifying age for pension benefits will also slowly increase from 60 to 65 to keep the system solvent.

More than 20 percent of the current population is 65 or older. That will rise to more than 30 percent by 2050. Boomers account for an estimated 8.6 percent of the work force; their rapid disappearance from Japan's offices and factories will be a blow to the economy at a time when the overall labor force is shrinking, not only through loss of laborers, but also loss of a highly skilled group of workers.

Planners expect more than half the boomers to stay productive well past 60, but it is estimated that 1.12-million will leave the work force in the next three years.

Although that's less than a quarter of the over-60 workers, Japan's boomer-retirement wave is hitting much harder and faster than America's.

Japan's baby boom started later than America's and lasted three years, compared with 18 in the United States, says John Rother, policy director at AARP. Also, the United States has a healthier economy; a growing population, aided by immigration; and retirement institutions such as Social Security that, while under pressure, could be strengthened by small modifications, he said.

Advantages in Japan are that it has a long-term care program, and every worker has a pension - not the case in America.

Boomers hold an estimated 10 percent of total personal financial assets in Japan, and all sorts of new products and services await the flood of Japan's wealthiest generation into the leisure, real estate and travel markets.

Health food sales are booming. Adult education classes are proliferating. American companies are here, too; Hartford Life Insurance is marketing mutual funds, annuities and other products.

And developers are scrambling to lure retirees to planned communities where they can enjoy the good life and spend their nest eggs. Some companies offer retired couples a free three-month trial stay.

Shimizu and about 20 others joined a two-day trip to such a planned retirement village about two hours outside of Tokyo.

The $25-million village will house about 1, 000 people, 60 percent of them retirees, said Sachihiko Kawamata, president of the Tsukasa Group developer.

Kawamata, himself 59, says he wants to recreate the homey, intimate Japan that retirees remember from their youth. So he plans to attract younger workers, single mothers and other young people to the project so it doesn't feel like a place populated only by the elderly.

Many boomers say they'll continue to work during retirement. For instance, Takeshi Sakamoto, 60, touring the village, hopes to open a noodle shop in the village.

"Our generation was the kind that could do anything, " Sakamoto said. "In the old days, if you retired you could just relax. But in this economy, you can't just quit doing things."

[Last modified May 28, 2007, 13:52:13]