Aim: To assess if older people with higher levels of social capital experience higher levels of sense of mastery than those with lower levels of social capital and to assess whether this association is stronger for retired older people than for older workers. Methods: The data originates from a general population mental health survey conducted among 2610 older people (50 years of age or older) in Finland in 2011. The response rate was 57.1%. The association between sense of mastery, measured by Pearlin’s Sense of Mastery Scale, and social capital, measured by social networks, organisational activities, trust, and sense of belonging, were tested by logistic regression analyses. Results: The results showed that older workers experienced greater sense of mastery than retired older people. Trust and neighbourhood belonging were positively associated with sense of mastery. Conclusions: Inequalities in mental wellbeing between older people included in or excluded from the workforce are a public health challenge. Our findings imply that social capital needs to be prioritised as a means for enhancing mental health. More attention should be paid to promote mental wellbeing in retired older people.