We aimed to identify short and long-term trajectories of self-rated health (SRH) and physical working capacity during the retirement transition, and investigate whether work-related factors and social class predict belonging to these trajectories. We used the representative, biennial Swedish Longitudinal Occupational Survey of Health (SLOSH) 2006–2018. We applied group-based trajectory modeling with B-spline smoothers to model trajectories of SRH (n = 2,183) and physical working capacity (n = 2,152) during the retirement transition. Multinomial logistic regression analyses were conducted to investigate trajectory belonging by work-related factors and social class. There was a small “honeymoon effect” in SRH for the total sample. We found four trajectories of SRH and five of physical working capacity. The large majority sustained excellent or good SRH and physical working capacity throughout the study period. Almost 6% had Fairly poor SRH and physical working capacity starting from years before retirement, which remained throughout the study period. High job demands, low job control, adverse physical working conditions, and being in manual occupation increased the likelihood of belonging to the trajectory groups Deteriorating or Fairly poor when compared with the Excellent trajectory group for both SRH and physical working capacity. Our findings suggest that for most people health status is already established some years’ preretirement and maintained for years after retirement, except a short improvement in SRH in accordance with a honeymoon effect. In order to improve health and employability, interventions focusing on working environment should be aimed at younger and midlife employees as well as older workers.