A set of older workers from the Raleigh-Durham-Chapel Hill metropolitan area were followed for two years in order to explore the social psychological consequences of retirement. Three findings are of particular interest. First, when we separated workers who retired from those who continued to work and compared their self-esteem and depression scores over the two-year interval, we found that self-esteem scores did not change for either group, but that depression scores declined for workers who retired. Turning to differences between retirees and those who continued to work, regression analyses revealed that retirement had a positive influence on self-esteem and a negative influence on depression. In addition, earlier worker identity meanings had a stronger negative effect on the depression scores of respondents who continued to work than on those who retired.