Terumitsu Ootani worked his way up the corporate ladder at a financial brokerage firm for 35 years and retired on his 60th birthday two years ago. To complete the classic Japanese salaryman story, Ootani should have filled his retirement with travel and giggling grandchildren.

Instead, Ootani and his wife, Kuniko, are up to their elbows in pickles and soybeans, plowing three large farm plots and producing enough organic vegetables to feed themselves and their children, with enough left to sell at market.

"If I were a billionaire, maybe I could do something different," said Ootani, who sold his Tokyo home and built a small farmhouse in the mountains 75 miles west of the capital. "Life is so long after retirement. If I lived on my pension, I would have just enough to eat. That's not what I wanted."

The Ootanis represent the new realities of retirement in a country with the world's longest-living population. Today, men's life expectancy is 77 years, eight years longer than in 1970. Women typically live almost a decade longer than a generation ago, to almost 84.

Yet despite this dramatic change in life expectancy, most people still retire at 60. And as people live longer, millions have changed their approach to the 20 or so years they can expect after retirement. The Japanese term for retirement used to be "extra life," a leisurely bonus tacked on to the end of a career when one usually was taken care of by family and a lifetime of savings.

But in a reflection of the new attitude, and often financial worry, about life after 60, the latest term for retirement is "second life." It has become a time when people try new careers and continue earning a paycheck. The Japanese government is encouraging this trend as one way to overcome the greatest long-term obstacle to this nation's economic recovery -- its rapidly changing population. Japan has an exploding number of elderly in need of expensive medical and pension benefits; the birth rate is dropping to a record low; and there are fewer laborers in the work force supporting those on pensions.

Italy, Germany, the United States -- in fact most major industrial nations -- are experiencing the same changing demographics, but no country is hurtling faster toward an aged society than Japan. Today, nearly a quarter of all Japanese are over 60, and that number is expected to increase in 25 years to 1 in 3 people. Paying welfare and health-care benefits for all those elderly could gobble up more than a third of the national income, according to recent estimates.

How the world's second-richest nation copes with its graying society -- and how individuals alter their approach to retirement -- is considered a test case for much of the world. "It is a big problem, but not unfixable," said Toyoo Gyohten, an influential economic consultant who has been a key adviser to Prime Minister Keizo Obuchi.

One way to ease the problem would be to relax Japan's tight immigration controls, allowing more young workers from other countries into the country. But Gyohten said that subject is considered taboo for public debate. "There is a total aversion to the idea of millions of Chinese and Indonesians" coming to Japan, he said.

Last week, a key economic advisory panel issued a blueprint for reviving Japan's economy and called for a "prudent approach" to any easing of restrictions on foreign workers. But it wholeheartedly endorsed the employment of older Japanese -- a policy the government is already pursuing.

While most people retire at age 60, the government is encouraging people to work until 65. It is also gradually -- over the next 14 years -- increasing to 65 the age at which people are eligible for government pensions. The government also has established "silver" job centers in neighborhoods throughout the country, where about 450,000 older people have gone for job counseling in the past few years. In one of the most visible signs that more older people are working, many senior citizens can be seen sweeping playgrounds, cleaning parks and tending to flower beds along busy city streets.

Others take office jobs, like Tsunemaro Momose, 62, who leads a team of elderly people doing clerical work. A "silver center" in the Minato-ku neighborhood of Tokyo led Momose -- who retired recently from a management job at a construction company -- to the part-time position, which pays him $665 a month in addition to his $2,000 monthly pension.

"As long as my body works and my brain is strong, I would like to keep going," Momose said. In the world's most expensive city, he said, he can use the cash, and going to work for six hours a day is actually easier than "thinking of a plan each day of what to do." For a while after he retired, Momose toured shrines, temples and other interesting sights he never had time for before. But he is happy to be back working.

For some men, working is a better option than retiring because it's a way to avoid the "wet leaves" phenomenon -- the feeling among wives that newly retired husbands are as pesky and hard to get rid of as fallen wet leaves.

Many women essentially create a life separate from that of their husbands, who put in long hours on the job and socialize with their work colleagues over the decades they are employed. Marital problems caused by retirement, which upsets that familiar rhythm, has led to a small boom in elderly counseling services and to rising divorce rates among the elderly. Yoriko Madoka, a member of parliament who runs a support network for divorced women, said "the wet leaves" phenomenon is no small issue.

"When their husbands were working, they did not see their husband's face all day; now their husband is home for dinner sitting around the table with nothing to say," Madoka said. "People are living drastically longer, and the number of years people are married long after their kids are gone is drastically longer too."

A decade of economic troubles here has left many elderly Japanese concerned about their financial security. Their pension plans have been trimmed by their employers. Their children, who had planned to provide for them, are struggling with lower salaries and layoffs. That has added to a feeling among many older Japanese that the sixties are no time to give up a regular paycheck.

Ryoji Kai, who edits one of the many new magazines geared to retirees, said that a decade ago, when Japan was prospering, more than 7 million seniors played gateball, a popular game similar to croquet. That number has dropped to fewer than a million today as more and more seniors trade hobbies for paying jobs.

Kai said that, in the past, retirees interested in gardening would simply grow a few flowers. These days, he said, they go to school, get a degree in horticulture and find a job as a professional gardener.

"When the economy was good, people had no anxiety about their retirement," Kai said. "Now, there is a new reality."

The "second life" gives many people a chance to make money doing something they enjoy. Takeshi Okamoto, 66, was a judge for 36 years, serving on courts from Sapporo in the north to Osaka in the west. When he retired at 60, he decided there was more to life than leisure, so he took cooking lessons and opened his own noodle shop in Osaka.

"This way, I can continue to have as interesting and challenging a life as I had in my court days," Okamoto said.

The Ootanis have no complaints about the hard work of their retirement. They do all their work together. In their small fields, side-by-side, they till the loam and tend melon plants and strawberries, pumpkins and eggplant.

They say they are realists who understand that their later years will be more sweat and calluses than cruise ships and croquet.

"We are the generation who dedicated our whole life to work so someday we could relax and enjoy," Ootani said, picking a meaty red bean from a plate of organic pickles his wife placed on the table before him. "But suddenly, we are from an economy that doesn't guarantee our life."

CAPTION: Japanese retiree Terumitsu Ootani, right, chooses to work again as a farmer with his wife, Kuniko.