The findings are the result of a massive French study, which looked at the records of 429,000 workers. The scientists presented their results Monday at the Alzheimer's Association International Conference in Boston.
The findings underpin the often repeated advice to prevent mental decline: "Use it or lose it." Doctors have said that keeping the brain mentally challenged is one way to prevent dementia and related diseases.
The French workers that were part of the study were age 74, on average, and had been retired for an average of 12 years.
The study found that nearly 3 percent had developed dementia, but that the risk of developing the disease was lower for each year of age at retirement.
For example, someone who retired at 65 had a 15 percent lower risk than someone who retired at 60, said Carole Dufouil, a scientist at INSERM, the French government's health research agency.
To rule out the possibility that mental decline may have led people to retire earlier, researchers did analyses that eliminated people who developed dementia within 5 years of retirement, and within 10 years of it.
"The trend is exactly the same," suggesting that work was having an effect on cognition, not the other way around, Dufouil said.
Economists have noted that the recession, which wiped out millions of Americans' retirement funds, has led to people putting off retirement.
Since the mid-1990s, American workers have been working longer, but that trend accelerated sharply during the most recent economic calamity.
About 35 million people worldwide have dementia, and Alzheimer's is the most common type. In the U.S., about 5 million people have Alzheimer's, according to recent statistics.