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Background: The purpose of this study was to investigate the psychopathology and level of happiness and their association with the demographic data of the older population in long-term care situations in Taiwan. Methods: The study enrolled 500 participants who were the elderly in long-term care situations and used the Brief Symptom Rating Scale (BSRS-5) and Chinese Happiness Inventory (CHI) to determine the psychopathology and level of happiness. Multiple linear regression analysis (using a stepwise method) and a two-step cluster analysis were performed to examine the data. Results: The results revealed mean scores for total CHI and total BSRS-5 of 16.08 and 2.34, respectively. Regular exercise habits, higher living expense and having a job were positively associated with happiness. Being older and living in an apartment/condominium were factors negatively associated with happiness. Living in an apartment/condominium was positively associated with a higher BSRS-5 score. Four clusters were grouped according to the variables that contributed the most: housing, exercise habits, living expense and working status. The cluster with no work, no exercise habits and lower living expense had the highest BSRS-5 score and the lowest CHI score. Conclusion: We concluded that the association between demographic data and happiness is stronger than the association between demographic data and psychopathology in a community sample in Taiwan. Those who have steady work, higher living expense and regular exercise habits have better happiness and less psychopathology.