Manpower Minister Tan Chuan Jin says the government is looking to introduce a new law which will increase the re-employment age to 67 by 2017.
He said the government will give businesses until 2017 to adjust.
The Ministry of Manpower is working with unions and employers to ensure a smooth transition.
Employers will be given incentives to encourage companies to voluntarily re-employ their older workers.
There has been a steady increase in the number of older workers in the workforce in recent years.
Some 65% of older workers are being employed now compared to just 57% in 2009.
