I was five and it didn't really matter to me. It was my maternal grandmother, and I really barely remember it or her.
Take your kids. They need, and deserve closure just as much as anyone. My kids are 5 and 3, and they went to their great grandma's funeral 18 months ago. They were fine, and perfectly understood it as a part of life's cycle. Now they still bring up fun memories (my oldest anyway) and they just know she's not here to visit anymore. But picture albums help to remember the good memories. One-time occurences in a lifespan, like funerals, will not ruin the good memories... and closure is needed for people of all ages. The truth about life and it's cycle is best learned early for a healthy understanding of life's fragility.