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We examined prospectively the use of all-cause hospital in-patient care among public sector employees by using a 3-year pre- and post-retirement study window.A total of 5269 participants of the Finnish Longitudinal Study of Municipal Employees had retired during January 1984 and July 2000. They had register-based data on retirement (non-disability retirement n = 3411, men 40%, and diagnose-specific disability retirement n = 1858, men 50%) and all-cause hospital in-patient admissions and discharges. Analyses were conducted using Generalized Estimating Equation model.The prevalence of hospital care use for non-disability retirees remained stable during the 6-year study window. The rate ratio (RR) for hospital care use increased in the year prior to retirement for men and women who transitioned into disability retirement due to cardiovascular disease and for women with disability due to mental disease. The RRs for hospital care use in the post-retirement year decreased for men who retired due to cardiovascular disease or mental disorders and for women who retired due to cardiovascular or musculoskeletal diseases.An increase in hospital care preceding retirement in major diagnosis-specific disability retirement groups was followed by various patterns of decrease in the need of care indicated a beneficial health effect of retirement.