This study examines the causal effect of retirement on the health of middle-aged and older adults in China. We used the mandatory retirement age in China as an instrument variable with a fuzzy discontinuity design. This served to examine the exogenous impact on retirement behavior. Two regression analyses were used, each with the dependent variable as self-assessed health status (SAH) and depression levels, respectively. Changes in an individual’s internal and external environment after retirement were associated with an increase in SAH and a decrease in depression. Highly educated men are 93.5% more likely to improve their health. Women are 0.26% less likely to be depressed. People with higher education tend to reduce their vigorous activities and increase walking for over 10 minutes after retirement. This study may promote research on aging and the health status of the Chinese population. It may provide a scientific basis for formulating, revising, and improving social security policies in China.