It's a bit complicated. In total, our life spans are...oh...somewhere around twelve, fourteen thousand years usually. But it is spread out over thirteen incarnations, each of which live, mature, and barring accidents eventually die of old age.

Therefore age is both total years lived, but also incarnations passed through. The incarnation one is on shows how much life one has experienced and...

[Brief hesitation, and Narvin's voice is ever so slightly softer when he finished that sentence.]

...and how much life one has left.

[He clears his throat.]

A minor factor as well is the age of the current body. But of all the determiners of age, that is the one that Time Lords consider least relevant.