Affective forecasting, experienced affect, and recalled affect were compared in younger and older adults during a task in which participants worked to win and avoid losing small monetary sums. Dynamic changes in affect were measured along valence and arousal dimensions, with probes during both anticipatory and consummatory task phases. Older and younger adults displayed distinct patterns of affect dynamics. Younger adults reported increased negative arousal during loss anticipation and positive arousal during gain anticipation. In contrast, older adults reported increased positive arousal during gain anticipation but showed no increase in negative arousal on trials involving loss anticipation. Additionally, younger adults reported large increases in valence after avoiding an anticipated loss, but older adults did not. Younger, but not older, adults exhibited forecasting errors on the arousal dimension, underestimating increases in arousal during anticipation of gains and losses and overestimating increases in arousal in response to gain outcomes. Overall, the findings are consistent with a growing literature suggesting that older people experience less negative emotion than their younger counterparts and further suggest that they may better predict dynamic changes in affect.