TOKYO • Many people his age would be happy to slip on a cardigan and put their feet up, but not Mr Teruo Sugiura.
The 86-year-old makes his way to a seniors' work centre in Tokyo several days a week, where he repairs traditional Japanese sliding doors. It does not pay much, but that has not stopped Mr Sugiura from turning up for the past 20 years. He is one of millions of elderly people still collecting wages into retirement age. "I'm working to keep my body in good shape," says Mr Sugiura, a former sweets salesman.
"I think it's wrong not to be doing anything. There's no point staying at home twiddling my thumbs."
Japan's silver-haired workers are everywhere these days - from wrinkled men waving glow sticks at construction sites to checkout counter clerks or caregivers for the very old. And this geriatric working class shows no sign of shrinking - more than 20 per cent of Japanese older than 65 still work.
That is the highest proportion among developed economies and a figure likely to soar as the pool of younger workers shrinks and the fast-ageing population squeezes a strained social welfare system.
People over 65 are expected to account for nearly 40 per cent of the greying population by 2060 as Japan wrestles with a low birth rate.
And the country's labour force - the number of employed and unemployed people aged 15 to 64 - is at risk of losing more than 27 million workers in the same time frame, a drop of about 42 per cent from current levels, according to a government advisory panel.
Demand for workers is high and the jobless rate for January, published on Tuesday, was an enviable 3.2 per cent, a two-decade low and well below that in the United States and many European nations.
In response to demographic shifts, the government is gradually raising the official retirement age and starting age for state pension payments to 65. The official retirement age will be raised in steps from 61 to 65 by 2025. It will be raised to 62 next month.
"This is enough incentive for (seniors) to push back their retirement and keep working," investment bank Goldman Sachs says in a report on Japan's labour market.
And Tokyo is putting the pressure on firms to keep workers on longer, or by hiring older employees. Some companies have responded, including carmaker Honda, which has said it would raise its working age by five years to 65 starting next month, a move that could affect tens of thousands of workers.
Meanwhile, convenience store chain Circle K Sunkus has trained a handful of elderly people, in a nod to the ageing labour pool. And electronics giant Ricoh has called on retired technicians to get its computers ready to be installed.
"There is very strong market pressure for employers to keep older people," says Dr Atsushi Seike, a professor of labour economics and president of Tokyo's Keio University. "The drastic decline of the workforce will have a significant impact on the behaviour of employers.
"Many are willing to boost the number of older workers, and I think this trend will continue - or even accelerate - in the future."
More than half a million older Japanese find jobs through the government-subsidised National Silver Human Resources Centre Association, including 63-year-old Junko Kondo, who says her government pension is not enough.
"I'm saving the money I make here," she says, as she assembles packaging for salt sold at luxury stores. "I'll use it to buy presents for my grandchildren, or a sweater, or maybe just lunch for myself."
The reasons for Japan's elderly staying in the workforce vary, but keeping mentally and physically fit is key for many. It also puts some extra money in seniors' pockets, although the wages paid by the Silver Centres are low - an average of 37,000 yen (S$455) a month.
But for people like Ms Taeko Mishima, 74, the extra money could be a lifesaver. She worries that the pensions she and her husband collect are not enough to cover the cost of staying at a nursing home with medical care, which could add up to as much as 300,000 yen a month. "My pension isn't high enough to pay for that."