Retirement years are ideally spent in good health. We aimed to produce new information using person-oriented methods by identifying groups of statutory retirees who did or did not achieve this objective and the factors that distinguish these groups from each other. Our particular focus was on the years directly after the transition into retirement, and the pre-retirement factors that explained the development of health, using a more severe health-related outcome—hospitalization. We studied the retirement, hospitalizations, education, and work characteristics of former employees of the City of Helsinki, Finland (N = 6569), from complete registers. We used group-based trajectory models and identified groups of constant low, constant high, decreasing, and temporarily occurring hospitalizations, and one group of increasing hospitalizations among women and two groups of earlier and later increasing hospitalizations among men. Multinomial regression models showed that among women, belonging to groups with less favourable health was associated with secondary education, older age at retirement, and reduced working hours. Education and work characteristics before retirement both contribute to the development of health, as indicated by hospitalizations directly after retirement. Our findings show that socioeconomic inequalities in health are persistent and should also be addressed after transition into retirement.