Hidden ‘Junk IRAs’ To Threaten $43 Billion in American Retirement Savings by 2030

Up to 2 million retirement accounts could be at risk of automatically rolling over into Safe Harbor IRAs each year

NEW YORK, Oct. 23, 2025 (GLOBE NEWSWIRE) -- PensionBee, a leading retirement savings provider, released new research revealing that millions of Americans may be unknowingly jeopardizing their retirement security when they change jobs and leave old 401(k)s behind. Drawing on data from the Employee Benefits Research Institute (EBRI), the findings suggest that retirement savers could have $43 billion trapped in poorly performing retirement accounts by 2030.

Workers who leave behind retirement accounts under $7,000 can be forced out of their old employer plans into “Safe Harbor IRAs.” While designed as a temporary solution for small, left-behind 401(k)s, the majority of Safe Harbor IRAs become long-term traps that can drain retirement accounts through excessive fees and minimal returns.

With the average worker holding 12 jobs over their career, the American workforce is exceptionally dynamic and mobile. Frequent job changes are accelerating the risk: One third of all retirement accounts are currently under the threshold for automatic force-out (<$7,000) if left behind.

Staying invested in a Safe Harbor IRA may lead to lower returns, potentially resulting in a $90,000 differential across multiple accounts over time. In extreme cases documented in the analysis, smaller accounts can be completely depleted to $0 through the combination of fees with minimal returns.

“The data provides much-needed numerical clarity on the scale and acceleration of the Safe Harbor IRA problem,” added Romi Savova, CEO of PensionBee. “The likelihood of having at least one of your prior retirement accounts sitting in high-fee, cash-like accounts without your knowledge is strikingly high. The impact these junk accounts can have on ultimate retirement wealth is horrific.”

A Decade-Long Escalation

The research reveals alarming trends accelerating across the U.S. retirement system:

• Up to 2 million accounts annually are expected to be forced into Safe Harbor IRAs via automatic rollovers. By 2030, an estimated 13 million accounts will sit in Safe Harbor IRAs.
• 25–30% of employment-based accounts are under the $7,000 threshold, leaving them vulnerable to automatic rollover if left behind.
• $28.4 billion is already in Safe Harbor IRAs; by 2030, that figure could exceed $43 billion, a projected increase of more than 50%.
• Just 12.8% of displaced accounts are moved in the first year, and just 25% are moved after three years, suggesting the system isn’t being used as the short-term solution it was intended to be.

To combat the problem, PensionBee partnered with SS&C Technologies to offer an alternative Safe Harbor IRA, designed to reduce administrative costs for employers while providing a good temporary home for former employee retirement savings. PensionBee offers U.S.-based human support to all customers to help transition into a market-leading Target Date portfolio so long-term retirement savings can stay on track. PensionBee offers curated investment portfolios powered by prestigious ETFs like SPY and MDY from State Street Investment Management, one of the world’s largest asset managers.

About the Research

The white paper, titled How Junk IRAs Are Destroying The American Dream, incorporates data from the Employee Benefits Research Institute (EBRI) and PensionBee's proprietary analysis of market practices and account performance trajectories.

About PensionBee

PensionBee (LON: BEE) is a leading retirement savings provider, helping people easily consolidate, manage, and grow their retirement savings. The company manages over $9 billion with approximately 300,000 customers globally, with a focus on simplicity, transparency, and accessibility. PensionBee offers Traditional, Roth, SEP and Safe Harbor IRAs built with portfolios powered by ETFs like SPY and MDY from State Street Investment Management, one of the world’s largest asset managers.

About EBRI

The Employee Benefit Research Institute is a non-profit, independent and unbiased research organization that provides the most authoritative and objective information about critical issues relating to employee benefit programs in the United States. The organization also coordinates activities for the Center for Research on Health Benefits Innovation, Financial Wellbeing Research Center and Retirement Security Research Center and produces a variety of leading industry surveys during the year. For more information, visit www.ebri.org.

Notes
The information provided in this announcement, including any projections for investment returns and future performance, is for informational and educational purposes only and should not be considered investment advice. Past performance is not indicative of future results. All investments carry risk, including the potential loss of principal. PensionBee is not liable for any losses or damages arising from the use of this information. Projections and forecasts are based on assumptions and current market conditions, which are subject to change.

Media Contact:
Adela McVicar
SR PR Manager, PensionBee
adela.mcvicar@pensionbee.com

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