Sorry, my previous reply had a bug for computing ActualAgeOnJan1.  Corrected code:

;
WITH cte
AS (
    SELECT CAST(BirthDate AS DATE) AS BirthDate
        ,CAST(ServiceDate AS DATE) AS...

;
WITH cte
AS (
    SELECT CAST(BirthDate AS DATETIME) AS BirthDate
        ,CAST(ServiceDate AS DATETIME) AS ServiceDate
    FROM (
        VALUES
                ( '01/01/1951', '2016-01-01'),
                ( '01/01/1951', '2016-08-26'),
                ( '01/02/1951', '2016-08-26'),