Quality of life (QOL) is increasingly being suggested as a crucial outcome variable for interventions that aim to maintain or improve health and psychological resources in old age. Currently, two main approaches to measuring QOL can be distinguished: (1) the sQOL approach which measures an individual’s subjective evaluation of his or her overall life situation and QOL; (2) the oQOL approach that infers QOL of an individual from the outside, e.g., via measurement of health impairments. Both approaches, however, are problematic: In the first case, a large majority of individuals report relatively high levels of sQOL that are sometimes in stark contrast to observable impairments (known as the well-being paradox; Staudinger, 2000). This suggests that improving impaired resources does not necessarily lead to improved sQOL (although there may be positive effects on the autonomy of these individuals). The second approach is problematic because improved oQOL leads only to an increase in self-reported overall sQOL under very rare conditions – and one cannot assume that an increase in resources necessarily has led or will lead to higher levels of sQOL. Therefore, we propose a new, functional quality of life (fQOL) approach to determine quality of life. It combines the existing approaches by linking the subjective representations of objectively measurable resources to their functional value for pursuing individually meaningful activities and goals. From this model, fQOL-improving interventions as well as methods to evaluate the effectiveness of QOL-interventions can be derived.