BY MOST people's definition, retirement is the process of concluding their professional working life and focusing on leisure activities and social relationships. It means saying goodbye to the workforce after three or four decades of long hours and hard work.

And after those years of the daily grind, retirees can look forward to a more relaxed and enjoyable period without the burden of work. Or can they?

Though the prospect of not having to get up early and go to work every day has its appeal, retirement brings with it a different set of challenges for retirees, such as the possibility of less income and a lack of meaningful activities to fill each day. It also presents a significant challenge to governments and society in general.

When Count Otto Von Bismarck introduced the concept of retirement and the retirement age of 65 to the world and specifically to the Prussian army in the late 1800s, life expectancy for most men was around 50 years of age.

Two hundred years later, in most countries, people are experiencing a progressive increase in life expectancy caused by better health, better diets, breakthroughs in medical research and the elimination of many diseases.

It is estimated that people are living up to 100 days longer each year going forward. So, if life expectancy in a country is 75 years of age today, in another 30 years or so, it will be 85 years of age. With men and women living well into their 80s, most people will not only reach retirement age but also live for many years in a state of retirement.

For example, if someone leaves university to join the workforce at 21, retires at 55 (which in some countries is the mandatory age for retiring) and dies at 89 years of age, he will have spent 34 years in the workforce followed by 34 years of retirement.

By this calculation, people need to remain in the workforce for a greater period of time than previous generations so they can accumulate enough savings to ensure a quality retirement and avoid being dependent on welfare or other people for support.

As significant as funding retirement is later life planning. This requires careful consideration to ensure retirement is a positive, enjoyable and fulfilling experience. Sitting on the sofa contemplating the "autumn years" of life may initially be blissful but on a prolonged basis, it will rapidly deteriorate into an unhappy state of retirement and may send a retiree and, quite possibly his or her spouse, to an early grave.

Research statistics have shown that people who retire and do nothing have an average life expectancy of five to six years in retirement and not the potential 25 plus years indicated earlier. Retiring and doing nothing is not an option - planning for the next exciting phase of life is mandatory.

I strongly advise people planning their retirement to do so at least five to 10 years in advance. This could mean that 10 years before retirement, a transitional plan is developed that bridges the gap between full-time work and stopping work altogether.

This plan could incorporate activities where new interests - hobbies, sports, education, not-for-profit work and part-time paid work - provide a balanced portfolio career that eases the transition and creates what is known today as "active" retirement.

The important value of this step is that it will almost certainly result in a long and happy retirement period. Retirement, however, is not just an issue for individuals; it is emerging as a major challenge for governments around the world.

Increased life expectancy places greater stress on healthcare services, housing, social welfare and services associated with retirement care.

At the heart of the retirement dilemma for governments is the fact that more people are leaving the workforce than entering it. There has been a progressive reduction in retirement ages from 65 to 60 and even 55 over the last decade or so in many countries.

This is due to a constant and seemingly endless supply of school and university leavers joining the workforce, creating pressure on employers to encourage older workers to leave their employment, voluntarily or involuntarily.

In contrast to the last 30 years, the trend of a large and available pool of new people constantly joining the workforce is about to reverse. There will be more people leaving than joining unless there is a willingness on the part of employers and employees to change the current concept of employment and retirement.

Both sides of the employment spectrum will need to embrace greater flexibility in employment and break the intrinsic and direct link between seniority in age and seniority within the ranks of an organisation.

In Singapore, the days of retiring at 62 with a gold watch, office farewell party, and big cheque from employers has long gone. Retirement is not a one-day, once-in-a-lifetime event. It requires careful and advance planning on the part of both the employer and the employee.