Successful social interactions depend on the ability to anticipate other people's actions. Current conceptualizations of brain function propose that causes of sensory input are inferred through their integration with internal predictions generated in the observer's motor system during action observation. Less is known concerning how action prediction changes with age. Previously we showed that internal action representations are less specific in older compared with younger adults at behavioral and neural levels. Here, we characterize how neural activity varies while healthy older adults aged 56-71 years predict the time-course of an unfolding action as well as the relation to task performance. By using fMRI, brain activity was measured while participants observed partly occluded actions and judged the temporal coherence of the action continuation that was manipulated. We found that neural activity in frontoparietal and occipitotemporal regions increased the more an action continuation was shifted backwards in time. Action continuations that were shifted towards the future preferentially engaged early visual cortices. Increasing age was associated with neural activity that extended from posterior to anterior regions in frontal and superior temporal cortices. Lower sensitivity in action prediction resulted in activity increases in the caudate. These results imply that the neural implementation of predicting actions undergoes similar changes as the neural process of executing actions in older adults. The comparison between internal predictions and sensory input seems to become less precise with age leading to difficulties in anticipating observed actions accurately, possibly due to less specific internal action models