Encoding, Storage, Retrieval
First you need to attend to the information and encode it into your system when it is presented. This forms the memory trace. You need to store or retain that information until the test takes place, then you need to retrieve the information and output it.
If you fail, it could be due to problems with any of the 3 stages. You might not have attended to the information and failed to encode it. Or you might have forgotten it (decay, interference) between the time you encoded it and the time your memory was probed. Or, you might have lost access to the information (it was retained, but not retrieved).
So, if you observe age differences in performance, you are left with the question of where the problem arises. Much ingenuity and effort has been expended to find out.