Aim A growing awareness of the rapidly increasing aged population in the world has led to growing attention to mental health in late life. Happiness has been emphasized as an important indicator of physical health and is predicted by a sense of coherence. However, the mechanism of influence of family relations on sense of coherence, happiness and perceived health is unknown. The present study aimed to analyze a conceptual model of the relationships among family relations, sense of coherence, happiness and perceived health in retired persons. Methods A total of 142 retired participants were recruited from social service centers in Taipei, Taiwan. A structured questionnaire measuring the relationships among family relations, sense of coherence, happiness and perceived health was filled in by each respondent. Data were analyzed using structural equation modeling. Results The results showed that family relations is positively correlated with happiness, sense of coherence and perceived health. The results also showed that good family relations and a sense of coherence predict greater happiness. The results from structure equation modeling showed that the relationship between family relations and perceived health is completely mediated by happiness and a sense of coherence, but only the indirect effect of happiness is significant. The results also showed that family relations is partially mediated by the sense of coherence to happiness. Conclusions In caring for retired older people, medical professionals need to increase their family relations and sense of coherence simultaneously, and then promote happiness in their interventions. Geriatr Gerontol Int 2017; ••: ••–••.