Objectives To examine factors contributing to psychological well‐being and ill‐being in older Australian women. Methods A multi‐variable model examining personality traits, life events, medical diagnoses, and cognitive appraisal was tested on 296 women (mean age = 69.13, standard deviation = 10.20) from the Longitudinal Assessment of Women Study using a cross‐sectional design. Results Neuroticism, optimism, and extraversion were associated with both well‐being and ill‐being, but these relationships were partially mediated by cognitive appraisal. The relationship between number of life events and ill‐being was fully mediated by cognitive appraisal, while the relationship between number of life events and well‐being was partially mediated by cognitive appraisal. The number of medical diagnoses directly predicted well‐being. Conclusions The supported model suggests that individual and public‐health interventions targeting personality traits, cognitive appraisal, and life events might have potential to improve well‐being and reduce ill‐being as individuals age.