Luka Modric is the oldest member of Real Madrid by far now. 
While Real Madrid is keeping him for another year, they are continuing on their rejuvenation project. The whole team is slowly getting much younger and building the future of this big team.
Yes, extending Luca Modric has its pros and cons, but if it's for the next year and makes him captain, that's good enough and Ancelotti really understands what he's doing. Luca Modric is already old and many people question his quality at the moment, but Ancelotti certainly understands what Modric can contribute as a player and captain. 1 more, Real Madrid also extended Lucas Vázquez's contract for the next 1 year until 2025, previously, his name was no longer in the squad, but in the end, the extension was made for the Right-Back. It's just that their contracts were extended for another year, which makes a lot of sense considering the ages of both of them. Meanwhile, Real Madrid has started to regenerate its players. While Real Madrid is keeping him for another year, they are continuing on their rejuvenation project. The whole team is slowly getting much younger and building the future of this big team.Source: Real Madrid Extends Lucas Vázquez's Contract
Currently, rumors say that Real Madrid is interested in one of Liverpool's Right-Backs, namely Trent Alexander-Arnold. It cannot be denied, the reason is very reasonable, Arnold is one of Liverpool's leading defenders, moreover he is also one of the players who strengthened England in the Euros until the final. There is no need to doubt his contribution to the club during his time with Liverpool, as he is an old player who has been at Liverpool since 2016/2017. And currently, the market value is 70M Euro.
Source: Could Liverpool's Trent Alexander-Arnold join Real Madrid?