To explain the ethnic paradox of mental health in aging, we evaluated whether Black and Latinx older adults experience (1) fewer depressive symptoms (DepSx), but more physical problems, and (2) greater psychological resilience as a result of life stressors than White older adults. DepSx, physical health, and recent stress were obtained biennially from 25,893 older adults (77% White, 15% Black, 9% Latinx) in the U.S. Health and Retirement Study, across 16 years. Psychological resilience, lifetime stress, and discrimination experiences were available for 13,655 individuals. We conducted mixed-effects and linear regression analyses. For Blacks and Latinxs, experiencing more-than-usual stress events was associated with less increase in DepSx compared to Whites, although on average Blacks and Latinxs experience more DepSx. Black adults showed worse physical health than White adults and weaker effects of stress on psychological resilience despite experiencing more stress of all types. Findings were mixed for Latinxs. Studying effects of time-varying stress on changes in health and multiple stressors on psychological resilience by race/ethnicity elucidates mechanisms for later-age health disparities. Cross-sectional evaluations of stress and psychological health in a clinical setting may provide incomplete appraisals of health risks for Black and Latinx older Americans.