There is nothing wrong with :
=IF(AH2>80,"80+",IF(AND(AH2<81,AH2>64),"65-80","Under 65"))
What if you remove any formula in AH2 and just type a number does it work?
Edit: It does work if you just enter a number, the problem is with:
=LEFT(YEARFRAC(AG2,TODAY(),1),2)
I propose you use...