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Japan watches anxiously as baby boomers march into retirement

TOKYO—The first of Japan's postwar baby boomers have just begun to pack their briefcases and bags and walk out the office door into retirement.

It has demographers and social scientists worried. The retirement wave coincides with a rise in average age and a looming drop in the size of Japan's labor force.

Japan has a common retirement age of 60, and this year marks the official onset of the baby boom generation's arrival at that age. Some 2.2 million Japanese will reach 60 this year.

The graying of Japan has far-reaching implications for its social structure and economics. Some companies are bracing for the loss of key retiring employees, while others are adapting to the changes or seeing new opportunities. Mobile phone companies are putting larger numbers on dials and screens, while other companies are making devices to safeguard, entertain or monitor the elderly.

Experts are focusing on the downside, including the loneliness of retired men yanked from their office-based social circles and rising pressure on workers to pay for social security for the elderly.

"There is a ticking time bomb in Japan regarding retirement," said Gregory A. Boyko, chief executive of the Japanese subsidiary of The Hartford, a life insurance and investment group.

Boyko, speaking at a recent two-day conference on aging sponsored by AARP (formerly the American Association of Retired Persons) said the percentage of Japanese age 60 or over is soaring and will reach 48 percent of the population by 2025.

As the birthrate stagnates and longevity increases, Japan's average age climbs rapidly. In 2005, the Japanese average age was 43 years old, but it will soar to 55 by 2050, said Atsushi Seike, an expert in labor economics at Keio University in Tokyo.

The National Institute of Population and Social Security forecasts that Japan's population will fall from 127 million people today to 100 million people by 2050.

That means ever fewer workers paying into a pension system to support a growing population of retirees, putting huge burdens on the system.

Savings are high in Japan, and individuals over 50 hold 80 percent of the country's $13.1 trillion in personal assets. But Japanese retirees will depend on federal pensions for two-thirds of their retirement income.

Rather than amble softly into retirement, workers do so with anxiety.

"In Japan, a traditional family system in which children take care of their parents has broken down," said Takeo Ogawa, an expert on rural aging at Yamaguchi Prefectural University. "We can't keep young people in the rural areas."

Boyko cited surveys saying that 91 percent of Japanese are concerned about survival during retirement, and 84 percent lack confidence in the pension system.

Japan's postwar baby boom lasted fewer years than in the United States, where it stretched from 1946 to 1964. Japan's baby boom refers to a sharp jump in births from 1947 through 1949. That jump left a demographic bulge that experts say will force millions of Japanese baby boomers into retirement in the next three years.

Much of Northeast Asia is confronting low birthrates and rapidly aging populations. South Korea now has the lowest birthrate in the world, and China's population of people age 60 and over will climb from 144 million today to 300 million by 2026.

Due to social factors, Japan's situation is somewhat unique. Urban employees usually have very strong ties to their workplaces but not necessarily to their communities.

A survey in 21 countries for the Organization for Economic Cooperation and Development found Japanese men to be the loneliest in the world.

The survey, released in March, found that 16.7 percent of Japanese men rarely or never have contact with friends, work colleagues and other acquaintances in places of worship and in sports and cultural associations.

"Most of them still think of the company as their big family. This tie will be cut once they retire," said Shigeyoshi Yoshida, executive director of the Japan Council on Aging, an advocacy group.

Yoshida said it's highly unlikely the men will join in local community activities once they retire. That leaves many retirees coping with severe isolation.

Some companies are innovating to deal with the social changes. At the AARP conference, attendees were amused by Paro, a therapeutic seal pup robot that its creator said limits dementia and depression among the elderly.

The robot makes no machine sounds nor has blinking lights, just a furry exterior. It can learn its owner's name and responds to praise and scolding. For recharging, the owner sticks a cord that looks like an orange or yellow pacifier in its mouth. Unlike real companion animals, the robot doesn't need to be fed or walked.

Robots clearly aren't the entire solution, though. Experts said Japan must revise a pension system that provides disincentives for retirees to find new jobs and consider lifting the retirement age so that employees can work past age 60.

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For information on the robotic Paro seal pup, go to www.paro.jp/english

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(Doi is a McClatchy Newspapers special correspondent.)

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(c) 2007, McClatchy-Tribune Information Services.

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