Senior Situation: Elderly to Account for 40% of Japanese in 2060
With its shrinking labour force, Japan "needs to realise a society where ageing people can participate in the labour market or in social activities" to boost its economic growth, the cabinet office said in a white paper.
The paper said many older people were keen to remain economically active.
But it added: "That strong desire among ageing people is not resulting in actual job opportunities".
Japan's population is declining and ageing as young people increasingly put off starting families, seeing them as a crimp on their lifestyles and careers. A slow economy has also discouraged young people from having babies.
The number of people aged 65 or over stood at 29.75 million as of October 1 last year, or 23.3 percent, an all-time high and one of the highest proportions of elderly people in the world.
An ageing population causes all manner of difficulties, most notably for Japan's government finances, already hard pressed by two decades of economic stagnation.
More retirees inevitably means more spending on social security at a time when Japan's public debt, at twice GDP, is already one of the industrialised world's largest.