Background and aims: Community-acquired pneumonia (CAP) is a major threat to older adults, but mid-term implications are poorly described. The aim was to analyze functional decline, institutionalization, malnutrition, and risk factors after hospital admission for CAP. Methods: This prospective observational study included patients over 65 years discharged after CAP between May 2019 and July 2021. We performed a comprehensive geriatric assessment and a general nutritional assessment 30–60 days after CAP. This included the MNA and blood test with trace elements and vitamins. The main outcomes were functional decline, institutionalization, and malnutrition. Multivariate logistic regression was used for the analyses. Results: In total, 144 patients of 77.15 ± 7.91 years, 55.6% male, and 9% previously institutionalized were analyzed. At hospital admission, the Charlson Comorbidity Index (CCI) was 1.5 ± 1.6, the Pneumonia Severity Index was 98.1 ± 25.9, and the previous Barthel Index (BI) was 93.06 ± 17.13. Hospital stay was 9.72 ± 7.88 days. After 44.6 ± 14.4 days, 48.6% patients showed functional decline and 19.4% were institutionalized. Age (OR 1.17; CI 95% 1.09–1.26), previous institutionalization (29.1; 3.7–224.7), BI (1.09; 1.05–1.14), CCI (1.5; 1.1–2.1), and length of stay (1.1, 1.02–1.18) were independently associated with functional decline. The only predictors of new institutionalization were previous BI (0.96; 0.93–0.99) and length of stay (1.06; 1.00–1.13). The MNA indicated malnutrition in 28% of the community-dwelling patients and 67.9% of those institutionalized, with risk of malnutrition being 45.7% and 9.5%, respectively, after an average of 44.6 days of CAP diagnosis. The predictors of malnutrition were previous institutionalization (10.62; 2.20–51.21), BI (0.95; 0.92–0.98), and length of stay (1.12; 1.04–1.20). Micronutrient deficiencies were mainly zinc (61.8%), vitamin D (54.5%), and vitamin C (45.1%). An MNA score < 17 points or hypoalbuminemia showed good specificity to identify these deficiencies. Conclusions: After CAP admission, functional decline, institutionalization, and malnutrition rates were high. Longer hospital stay was a common risk factor for all outcomes. The presence of hypoalbuminemia or an MNA < 17 in older patients should prompt suspicion of deficiencies in micronutrients, such as vitamin D, C, and zinc.