Sometimes people are just done and don’t want to work anymore. Don’t try to keep them, even if they have a tremendous amount of institutional knowledge. Help them exit gracefully by asking them to help you hire, on-board and train their replacements.
You will also want to protect yourself from age discrimination issues. While this requires work and diligence, it is better to be proactive and recognize when someone is done instead of trying to get them to stay because it makes your life easier.