Normal aging is associated with a decline in various memory abilities in many cognitive tasks; the phenomenon is known as age-related memory impairment (AMI) or age-associated memory impairment (AAMI). The ability to encode new memories of events or facts and working memory shows decline in both cross-sectional and longitudinal studies. Source: Wikipedia
The syndrome of declining memory ability associated with ageing is so ubiquitous that it can't be classed as a 'condition' or 'disease'. In general, all types of memory tend to become less efficient. Especially short-term memory.
Many studies have tested psychologists theories throughout the years and they have found solid evidence that supports older adults having a harder time recalling contextual information while the more familiar or automatic information typically stays well preserved throughout the aging process (Light, 2000). Also, there is an increase of irrelevant information as one ages which can lead to an elderly person believing false information since they are often in a state of confusion.
Several theories have been put forward which attempt to clarify why memory abilities tend to decline with age, but as yet there is no generally accepted explanation. See: Wikipedia
IMPORTANT NOTE : Age-related memory decline is recognised as a normal part of the ageing process, and is not considered to be associated with Alzheimer's or Dementia.