Older adults face decreasing motor capabilities due to pervasive neuromuscular degradations. As a consequence, errors in movement control increase. Thus, older individuals should maintain larger safety margins than younger adults. While this has been shown for object manipulation tasks, several reports on whole-body activities, such as posture and locomotion, demonstrate age-related reductions in safety margins. This is despite increased costs for control errors, such as a fall. We posit that this paradox could be explained by the dynamic challenge presented by the body or also an external object, and that age-related reductions in safety margins are in part due to a decreased ability to control dynamics. To test this conjecture we used a virtual ball-in-cup task that had challenging dynamics, yet afforded an explicit rendering of the physics and safety margin. The hypotheses were: (1) When manipulating an object with challenging dynamics, older adults have smaller safety margins than younger adults. (2) Older adults increase their safety margins with practice. Nine young and 10 healthy older adults practiced moving the virtual ball-in-cup to a target location in exactly 2 s. The accuracy and precision of the timing error quantified skill, and the ball energy relative to an escape threshold quantified the safety margin. Compared to the young adults, older adults had increased timing errors, greater variability, and decreased safety margins. With practice, both young and older adults improved their ability to control the object with decreased timing errors and variability, and increased their safety margins. These results suggest that safety margins are related to the ability to control dynamics, and may explain why in tasks with simple dynamics older adults use adequate safety margins, but in more complex tasks, safety margins may be inadequate. Further, the results indicate that task-specific training may improve safety margins in older adults.