Managing older employees with declining or sub par performance

How do folks approach managing / working with older employees who are showing signs that they aren't able to keep up with certain tasks or skills required? Nothing is excessively bad (like PIP worthy) but just enough to feel like they aren't meeting the requirements of the job and it's a moderate frustration.

It's obviously tricky because you can easily get into age discrimination. But, at a certain point you just need someone on the team who can solve problems independently and know how to use basic modern programs like word, outlook and teams without regular handholding (after numerous trainings).

I acknowledge that some people feel like they can't stop working because it's not financially feasible. They need a paycheck and maybe benefits, but the reality is, they can become expensive (late career, higher salary) with lower quality and production than other staff. Especially when they've been with the company for a long time.

In the situation Ive observed (kind of a dotted line management so I have little ability to change the situation even though it impacts my team), I don't think this person will retire untill they absolutely have to. They're eager to work however it's like everyone is too afraid to tell them about their mistakes or issues and just accepts it because of who they are or they almost feel bad for them??