Previous work has shown that older adults encode lexical and semantic information about verbal distractors and use that information to facilitate performance on subsequent tasks. In this study, we investigated whether older adults also form associations between distractors and co-occurring targets. In two experiments, participants performed a 1-back task on pictures superimposed with irrelevant words; 10 min later, participants were given a paired-associates memory task without reference to the 1-back task. The study list included preserved and re-paired (disrupted) pairs from the 1-back task. Older adults showed a memory advantage for preserved pairs and a disadvantage for disrupted pairs, whereas younger adults performed similarly across pair types. These results suggest the existence of a hyper-binding phenomenon in which older adults encode seemingly extraneous co-occurrences in the environment and transfer this knowledge to subsequent tasks. This increased knowledge of how events covary may be the reason why real-world decision-making ability is retained, or even enhanced, with age.