Abstract Semantic memory is a fundamental human ability which is central to communication. Although it is usually well preserved in healthy aging, memory problems in verbal communication due to slowed access and retrieval processes are a common complaint with increasing age. So far, the neural bases of this paradox remain poorly understood. The current neuroimaging study investigated age differences in the functional network architecture during semantic word retrieval in young and older adults. Using group spatial independent component analysis, we defined functional networks for verbal semantic fluency. Combining task-based functional connectivity, graph theory and cognitive measures of fluid and crystallized intelligence, our findings show age-accompanied large-scale network reorganization even when older adults have intact word retrieval abilities. In particular, functional networks of older adults were characterized by reduced decoupling between systems, reduced segregation and efficiency, and a larger number of hub regions relative to young adults. Exploring the predictive utility of these age-related changes in network topology revealed high, albeit less efficient, performance for older adults whose brain graphs showed stronger dedifferentiation and reduced distinctiveness. Our results extend theoretical accounts on neurocognitive aging by revealing the compensational potential of the commonly reported pattern of network dedifferentiation when older adults can rely on their prior knowledge for successful task processing. However, we also demonstrate the limitations of such compensatory reorganization processes and demonstrate that a youth-like network architecture in terms of balanced integration and segregation is associated with more economical processing. Significance Statement Cognitive aging is associated with widespread neural reorganization processes in the human brain. However, the behavioral impact of such reorganization is not well understood. Here, we used taskbased fMRI to demonstrate a large-scale reorganization of brain networks in older adults even when their semantic abilities are intact. In particular, functional networks of older adults were characterized by increased coupling between different systems, reduced segregation and efficiency, and a larger number of hub regions relative to young adults. Associating these changes with behavior revealed high, albeit less efficient, performance for networks in older adults showing stronger dedifferentiation and reduced distinctiveness. Our results highlight the compensatory potential of network reconfiguration with age, but also reveal the limitations of such reorganization processes.