Vitality is the feeling of physical and mental aliveness. Vitality benefits individual, organizational and societal well-being. However, we know much less about the dynamics in the levels of vitality and its’ precursors. This study investigates the effects of retirement on vitality and how this effect differs between manual and non-manual workers and by baseline levels of vitality. We used two waves of the NIDI Pension Panel Survey, collected in the Netherlands in 2015 and 2018. Data from 4156 older workers (N = 4156), of whom 1934 (46.5%) retired between waves, were analysed. Vitality is assessed in three ways, as: (1) a composite measure of vitality, and its subcomponents (2) energy and (3) fatigue. Conditional Change OLS Regression models demonstrated that retirement is associated with improved vitality and decreased fatigue. Older workers who retire from manual work at wave 1 experienced the largest gains in vitality and highest declines in fatigue at wave 2, compared to those who remained employed. Retirement was more advantageous for older workers who experienced poor vitality and high fatigue at wave 1. No such effects were found for energy. Older workers in manual work, those experiencing low vitality and high fatigue at wave 1, may benefit most from early retirement. Since opportunities for early retirement are highly restrictive, it is essential to provide these groups of workers with effective work accommodations and interventions that may not only improve their vitality and quality of working life, but also extend their participation in the labour market.