A study was conducted to examine the role of positive and negative life circumstances and individual coping factors in the psychological adjustment of older individuals. Interviews were conducted with 32 men and 32 women between the ages of 65 and 75 who were retired from mid-level or managerial jobs at the University of Texas. Most of the respondents were reinterviewed one year later. The majority of the negative life events reported by respondents involved the death or illness of a family member or friend. In spite of the seriousness of the negative life events reported, daily hassles were more strongly related to distress than were major events. Results demonstrated mental health benefits for older persons from having social relationships that provided important qualitative aspects of social support. Findings also showed that perceptions of self-efficacy in dealing with problems and negative life events were related to successful adjustment. Respondents were, in general, well-adjusted and satisfied with their lives. They appeared to be coping effectively and were generally meeting the stresses and demands of aging with success and good humor. Most respondents reported that the quality of their lives as they aged was as good or better than they had anticipated and most were optimistic about the future. (NB)