<p>Living alone is both a choice and a compulsion among the elderly in India as the country is undergoing demographic and social transitions. An interplay of economic, health, and social factors affect their living arrangements and, hence, life satisfaction. The present study tries to analyse the factors affecting the psychosocial wellbeing (i.e. life satisfaction) of the elderly through the mediation of living arrangements. The study used data on the elderly population (60 years and above) from the Longitudinal Ageing Study in India (LASI), wave 1 (2017–18). Life satisfaction and satisfaction with living arrangement were measured to determine the factors affecting life satisfaction while focussing upon the living alone arrangement. The study used descriptive statistics and summary measures for the analysis. Social, economic, and health indices were used to measure the composite effect on living arrangement and satisfaction through the path analysis. It was found that the prevalence of living alone (5%) was the highest among elderly females, elderly who were not currently married, those with a low level of education, and those suffering from depression. Social and economic performance, measured through composite indices, was found to be low among the elderly living alone in comparison to the others. The path analysis suggested that economic status influenced the living arrangement of the elderly to a great extent; however, satisfaction with living arrangement was also determined by the social status of the elderly. The outcome of life satisfaction goes beyond the simple choice of living arrangement rather satisfaction is derived from living arrangements. The elderly living alone should be given economic and social security to promote healthy aging and optimum wellbeing.</p>