Stopping work and enjoying a well-earned retirement and a slower pace of life comes with plenty of benefits – but it may also cause our brains to lose their sharpness a little quicker, according to a new study using data from China.

Like many other countries, increasing life expectancy and declining fertility have meant that China's elderly population is rapidly growing. This led to the introduction of a New Rural Pension Scheme (NRPS) in the country.

The NRPS offers a stable income if participants retire at 60, and it's against this backdrop that the new study was carried out. It seems the benefits of this approach also come with some repercussions that are less positive.

"Participants in the program report substantially lower levels of social engagement, with significantly lower rates of volunteering and social interaction than non-beneficiaries," says applied economist Plamen Nikolov from Binghamton University in New York.

"We find that increased social isolation is strongly linked with faster cognitive decline among the elderly."

Looking at episodic memory recall tests and other methods for measuring cognitive ability, the researchers analyzed 10 years of government data on 15,990 individuals, most of whom were in communities that had adopted the NRPS.

There were some positives to retirement: Retirees started to drink less alcohol on average than when they were working and were more likely to give up smoking. Sleeping habits also improved after retirement.

However, social activities, social engagement, and activities associated with mental fitness were all down. The decline in cognitive functioning was most noticeable in delayed recall – the ability to remember information later – which is a predictor of dementia.

"Individuals in the areas that implement the NRPS score considerably lower than those living in areas that do not offer the NRPS program," says Nikolov.

"Over the almost 10 years since its implementation, the program led to a decline in cognitive performance by as high as almost a fifth of a standard deviation on the memory measures we examine."

The researchers suggest that social isolation is the key to the cognitive decline they observed in their study – and that's something that can potentially be tackled by introducing community programs and activities for the elderly.

As well as calling for this kind of support, the team wants to investigate how different job types (with other mental demands) can affect cognitive decline during retirement, which wasn't covered here.

Across the world, people are continuing to live longer, and stopping the routine of work usually comes with a major shift in almost every aspect of life for the years that we have left – and that may mean a change in health and well-being care is required too.

"The kinds of things that matter and determine better health might simply be very different from the kinds of things that matter for better cognition among the elderly," says Nikolov.

"Social engagement and connectedness may simply be the single most powerful factors for cognitive performance in old age."

The research has been published in the Journal of Economic Behavior & Organization.