How people experience their own ageing may impact how likely they are to remain engaged with life. This study examined (1) biologically based risk factors in the form of self-reported health and cognition, and (2) age-related stereotypes and frequency of perceived ageism as predictors of engagement with life and number of ‘close’ social connections in older adulthood. We aimed to move beyond studies focusing on direct links between ageism and psychosocial functioning by examining the extent to which ageism could act as a moderating factor, amplifying negative associations between established risk factors and engagement with life. Data were obtained from a community-based sample of 287 South Australians aged 65–103 years (M = 76.41, SD = 7.13; 54.4 per cent female) who participated in a telephone survey. Hierarchical multiple linear regressions were run using Stata v15.1. Overall, frequency of perceived ageism in this community sample was low. More positive age-related stereotypes were related to more ‘close’ social connections, but not greater engagement with life. Counter to expectations, an interaction of frequency of perceived ageism with health indicated that higher engagement with life was associated with more frequent perceived ageism, but only among those in poorer health. No other moderating effects were observed. The findings are discussed in terms of possible underlying mechanisms linking ageism, stereotypes and engagement, including the likelihood that our results in part reflect reverse causality, with those with both greater physical limitations and who remain broadly engaged being at greater risk of experiencing ageism.