I think Ancelotti still needs Luka Modric in his team that's why he is still keeping him in the team despite his age but for his physical condition Modric is very feet just that Ancelitti is building his team around younger players because they are the future of the club since the older players doesn't have the much time to spend in the club again. Modric may not have much playing time in Real Madrid again but his impert in the team can't be forgotten and when Real Madrid is having difficulty in the midfield Modric has always been introduced and he does wonders in the midfield when ever he is introduced in the game this alone will not let the Madrid coach to let him leave in a hurry.
For a player like Modric going to Saudi Arabia won't be a problem for his because he is a skilful player but it will be left for him to make the decision to either join the Saudi Arabian teams to make more money or to take a break from playing football.
Modric has reached the final stage of his career at Madrid, where his contract will end next season, speculation about his future is now emerging and there is news that he will move to the SPL. It cannot be denied that Ancelotti still really needs Modric presence, because it is very difficult to find players like him at the moment. But he is no longer young, and Ancelotti cannot do more to give him more playing minutes.
Los Blancos management has succeeded in keeping the transition in the main squad going well, where players like Modric and Kroos can be ideal examples for other young players. However, Modric is almost 39 years old, where his physical condition will no longer allow him to play full time, and we know that competition in Madrid midfield is now quite tight.
We have actually heard rumors regarding Modric future very often, but so far there has been no official news about where he will go. To be honest, choosing to retire at Madrid was also the right decision, he has been an inseparable part of Madrid success this decade. Ancelotti and everyone will certainly respect whatever Modric decision.