The ageing of the labour force and the falling employment rates of older workers have forced policy makers in industrialized countries to find means to increase the well-being of elderly workers and to lengthen their work careers. The aim of this study was to longitudinally examine how various components of well-being change as individuals grow older, and what effect retirement transition has on these factors and on their relationships. The transition from work life to retirement and the following years as a pensioner were associated with many changes in health, functional capacity, subjective well-being, and lifestyle. The study results support the view that it should be possible to ease working pace during the last years of a work career. This might lower the threshold between work and retirement and instil confidence in the individual that there is time to enjoy retirement also a few years later.