The study, published by the Institute of Economic Affairs (IEA), a think tank, found that retirement results in a "drastic decline in health" in the medium and long term.
The IEA said the study suggests people should work for longer for health as well as economic reasons.
The government already plans to raise the state pension age.
The study, which was published in conjunction with the Age Endeavour Fellowship, a charity, compared retired people with those who had continued working past retirement age, and took into account possible confounding factors.
Philip Booth, programme director at the IEA, said the government should go further to deregulate labour markets and allow people to work for longer.Now there is something that is going to be a tough political sell; We're broke, we can't afford to meet our obligations to those of you to whom we were promising retirement benefits...but, the good news is....!