The experiment investigated the extent to which risky street-crossing decisions by older pedestrians can be explained by declines in functional abilities. Sixteen young (age 20–35), 17 younger-old (age 60–67), and 18 older-old (age 70–84) participants carried out a street-crossing task in a simulated two-way road environment and took a battery of tests assessing perceptual, cognitive, and motor abilities. Older-old pedestrians were more likely than young and younger-old participants to make decisions that would have led to collisions with approaching cars, especially when traffic coming from two directions was approaching at a high speed. Regression analyses identified several functional performance measures as predictors of these dangerous choices. Walking speed, which determined the time needed to cross, was shown to play the most important role. Time-to-arrival estimate, which informed the pedestrians about the time available for crossing, was found to be the second most predictive factor. Visual processing speed and visual attention abilities assessed via the UFOV® Test also came into play, allowing participants to focus their attention on the relevant available information and to make timely, correct decisions. Attention shifting was the fourth significant predictor, allowing pedestrians to adapt their crossing strategy to the oncoming road-traffic information. The results suggest that the greater risk of being involved in a collision as age increases calls for a multi-dimensional explanation combining age-related physical, perceptual, and cognitive performance declines. These findings have implications for improving older pedestrians’ safety in terms of speed limits, road design, and training.