THE first wave of Australia's baby boomers - those born from 1946 - become eligible for the pension from next week.

Official projections suggest up to 107,000 baby boomer women will reach the female pension age of 64 next year.

A year later 100,000 baby boomer men will reach the male pension age of 65 and a further 120,000 women will reach pension age.

''The bulge will expand for 15 years,'' said David Knox, an actuary and worldwide partner at Mercer Consulting. ''And these boomers will be living longer than did earlier pensioners.''

Dr Knox was behind a campaign to gradually raise the pension age to 67, a decision implemented in the federal budget in May with the first increase to 65 years and six months due in 2017, and the final increase in 2023.

''I think we'll need more,'' he told the Herald. ''I would like the pension age to keep increasing as life expectancy increases, not on a one-for-one basis, but by six months for every year that lives lengthen, so that the costs are shared.''

The rapid ageing*** of the population brought on by the steady march of boomers into their upper 60s and early 70s will be a focus of both the Henry review of taxation and the Treasury's third Intergenerational Report, to be released early in the new year.

Current projections suggest that by the middle of the century almost one in four Australians will be 65 or older, roughly double the present 13 per cent. The proportion aged 85 or older will triple from 1.7 per cent to 5 per cent.

In an early insight into the content of the third report, the Treasurer, Wayne Swan, told the Australian Institute on Population Ageing Research in September it would find that Australia's population would be larger and somewhat younger than had been believed. That was being driven by an unexpected jump in the birth rate and greater than expected immigration.

The challenge would be to encourage older people to continue to contribute to the community, as carers, volunteers and workers.

The budget eased the income test on pensions in order to make continued part-time work more attractive.

But Dr Knox said most Australians actually retired well before the pension age. Retirement at 58 or 59 was typical, although there were signs that age was increasing to 61.

''The global financial crisis has eaten into nest eggs, forcing some people to postpone their retirement plans. And the recovery is going to encourage employers to hang on to their workers as they become scarce,'' he said.

The Henry review has considered recommending that the superannuation preservation age be slowly raised to 67, to bring it into line with the higher pension age from 2023, in effect making it impossible to get a retirement income before 67 without working or living off the income from investments.