No, your memory is not failing. While it is true that our memories decline with age, it is still possible to remember up to 2000 words. This is due to the fact that humans have an incredibly large capacity for memory.
If you are having trouble remembering something, then it may be helpful to use mnemonic devices like acronyms, rhymes, or visual cues. However, if you are having difficulty understanding the words themselves, then it may be beneficial to look up their definitions and/or explore their etymology.