Objectives: Prospective memory (PM), the ability to execute delayed intentions, has received increasing attention in neuropsychology and gerontology. Most of this research is motivated by the claim that PM is critical for maintaining functional independence; yet, there is a dearth of empirical evidence to back up the claims. Thus, the present study tested whether PM predicts functional independence in older adults using validated behavioral performance measures for both PM and functional independence. Methods: Fifty-eight healthy older adults performed a computerized PM paradigm, the Virtual Week task, as well as a timed version of an instrumental activities of daily living (TIADL) task. Furthermore, we assessed vocabulary, processing speed, and self-reported prospective remembering. Results: TIADL scores correlated significantly with performance in the Virtual Week task, vocabulary, and processing speed. Hierarchical linear regressions revealed that vocabulary and Virtual Week performance were significant predictors for TIADL. However, self-reported PM scores did not predict everyday functioning. Conclusions: The findings indicate that PM is an important cognitive ability for successful and independent everyday life beyond vocabulary. Moreover, the results show a substantial incremental contribution of intact PM performance for the prediction of everyday functioning by using objective PM measures. (JINS, 2018, 24, 640–645)