Speaking at the Age UK conference in London, Harman announced a fast track review of the retirement age.
She said people should be allowed to continue working into their 70s or 80s if they choose to do so.
The proposals will not affect the point at which the state pension can be claimed.
Harman said the increase in the number of well, older people demands a change in public policy.
She said: “We still have more to do to tackle the attitude that once you reach 60 you are just treading water until you become frail and dependent.
“This is important not just for those individuals concerned but for the economy as a whole. We have to banish the ageism in the workplace that costs the economy up to £31bn per year due to lost GDP.”
Pension consultant Ros Altmann says by having a state pension system that relies on mass means-testing, the least well-off people who try to work part-time after age 65 will be penalised.
She says: “Pension credit penalises any earnings over £5 a week, so if you try to work part-time to supplement your income, you will lose between 40 and 100 per cent of your earnings.
“Which, of course, means that policy discourages low or moderate earners from staying at work at all. This policy must be urgently reviewed, since it would be far better for older people who want to work part-time, to be encouraged to do so, rather than penalised for it.”
Standard Life head of pensions policy John Lawson says: “Baby boomers’ attitudes to retirement have fundamentally changed and they are now more ambitious for this ‘third stage’ of their life than any generation before them.
“For this generation, rather than seeing retirement as a way of stopping work, two fifths want to continue to be involved at work but on their own terms. The fast-track review is very welcome news for the millions of people facing retirement, not because they want too, but because current legislation effectively forces them too.”