It is sad what this 86yo man did. But this 85yo man still mediates International disputes (although, granted, I doubt he drives himself anywhere). That being the case, I do not think that age can determine a person's abilities and that having an arbitrary cut-off age for licenses, etc. isn't really the answer to solving these types of accidents.
I think that yearly (or even bi-yearly like pilots) testing would be good. And you could start it the year you begin receiving your social security benefits. Its a fixed age, just as there is a fixed age to get your license in the first place, so that takes out some of the randomness. It could just become one of those milestone numbers we have already - 16 to drive, 18 to vote, 21 to drink. Those are supposedly in place for our "protection", so why not have one when we are older, too.