I am in my seventies now and have lost 1" and that has been since a long time ago. I always thought it had to do with the spine and I have degenerative disks.
Decided to look it up again:
Dr. Albert, DDS, (USA) answered 8 years ago
THE ACTUAL REASON HAS TO DO WITH THE SPONGY VERTEBRAL DISK BETWEEN THE VERTEBRA IN YOUR SPINE. WHAT HAPPENS IS THAT OVER THE YEARS THERE IS A DRYING OUT PROCESS THAT MAKES THE DISTANCE BETWEEN EACH VERTEBRA SMALLER BY HAVING THIS DISTANCE DECREASE. THAT'S WHY YOU GET SHORTER AS YOU AGE