Older adults who live alone are generally more vulnerable to depression than those who live with their family. However, as society changes, older adults choose their household types for various reasons. This study examined the interaction effects between household type and psychological stressors, such as economic strain from extended life expectancy and grandchild care linked to adult children’s increased social engagement. Data from 279 individuals aged 65 or older with grandchildren showed that those who live alone report greater depressive symptoms than those who live with their spouse or other family members. Interestingly, grandchild caregiving stress moderated these differences. Specifically, depressive symptoms increased with greater caregiving stress in the spouse and family groups, whereas symptoms decreased in the living-alone group. Economic stress did not exert a significant moderating effect. Further, the study discussed implications, limitations, and directions for future research.