People do shrink as they get older. Age-related shrinking can be attributed to a variety of different reasons, some of which are preventable.
People shrink as they age because the vertebrates in the spine lose fluid and flatten. Over the years, the arches of the feet flatten, causing a person to be a little shorter. Most people lose muscle mass in middle to later life, and that affects posture. The more a person slouches, the shorter he or she appears.
In order to prevent age-related shrinking, regular exercise is necessary. Workouts geared toward core strengthening and those that work the legs and hips are important. Foods containing calcium and vitamin D also help.