Healthy aging is associated with a number of neuroanatomical and neurobiological alterations that result in various cognitive changes. Both, the dopaminergic as well as the serotonergic system are subject to change during aging. Receptor loss and severe structural changes in PFC and striatum have been reported. Aging is associated with a progressive decline in several cognitive functions, such as episodic memory, working memory, and processing speed. Furthermore, it is associated with deficits in tasks requiring adaptation to external feedback of right or wrong, or task-switching. Here, we develop the hypothesis that this loss of behavioral flexibility is caused by structural and functional alterations of the reward system leading to impairments in reward processing, learning stimulus reinforcement associations, and reward-based decision-making. We review (a) data on neural correlates and substrates of reward processing in young healthy animals and humans, (b) evidence for age related functional and structural alterations of the reward system, and (c) behavioral and neuroimaging data of age effects on reward-based decision-making processes. Implications for neuroeconomics and neurodegenerative diseases are discussed.