This study investigated age-related change in visuo-proprioceptive processing in the perceived body position using mirror hand/foot illusions, focusing on its temporal characteristics, its dependency on body parts, and its association with older adults’ fall risk. Either immediately or 15 s after the exposure to the mirror-induced inconsistency of visuo-proprioceptive signals regarding the right hand or foot position, participants performed a reaching task using the unseen, illusion-affected hand or foot. Results showed clear age group differences. Specifically, older adults exhibited larger reaching errors than younger adults in the hand condition, and after the 15 s delay in the foot condition. Further, the reaching errors were constant across time for older adults but decreased after the delay in young adults, regardless of the tested body part. Particularly, older adults’ risk of falling, which was assessed by the timed up-and-go test, was negatively correlated with the reduction of reaching error across time. This suggests that older adults, especially those with a high risk of falling, face difficulties in appropriately processing visual and proprioceptive information for body perception in accordance with their external environment.