Retirement can boost mental health, but not for everyone. In the high-income group, mental health didn’t change before and after retirement, but showed a positive spike during the retirement year. Middle- and high-income individuals with already high mental health improved less after retirement; that is, they had less “room to grow”. In the high-income group, retiring later in life was linked with slower improvements and sometimes worse mental health outcomes. Recognizing these differences can help design fairer retirement and pension policies, as well as targeted mental health interventions.