This study examined associations among life satisfaction, perceptions of future happiness, and mobility limitations in a population-based sample of 3,363 older persons from the Survey of Health and Living Status of the Near Elderly and Elderly in Taiwan. We used zero-inflated Poisson regression to determine if current life satisfaction and perceptions of future happiness were independently related to the number of mobility limitations that developed during an approximately 8-year period. We adjusted for sociodemographic characteristics, health status, social involvement, and depressive symptoms at baseline. Life satisfaction and perceptions of future happiness were both associated with the development of fewer mobility limitations during follow-up, but only for those participants who had no mobility limitations at baseline. The results suggest a protective relationship between psychological well-being and physical decline in later life.